You’ve got talent and drive - that’s how you’ve gotten as far as you have, and now you're ready to go out on your own. Starting a new business is exciting, but there’s a lot of planning to do before you open up shop.
While you might have some of the basics covered - you probably have an idea of who your competitors are and have put together a SWOT analysis, right? - there are still many more formalities that you need to consider. What are New Zealand's laws and regulations around starting a business, you wonder?
This blog is part one of two reviewing New Zealand laws and regulations around opening a business. Here, we’ll be talking about the different requirements you need to identify before you start a new venture.
Working out a good business name can be a lot of fun. But how unique is your name? Coming up with creative ideas only to find out time and time again that someone else got there first can be frustrating. However, you don't want to find yourself in any trademark drama so it's important to do your research before settling on a name.
Fortunately, there’s a tool you can use to save you a lot of hassle. It’s called the OneCheck tool, provided by business.govt.nz.
Input a potential name, and the tool will tell you:
As you can see, this tool isn't just ensuring your business' name is free, it's helping your future marketing efforts as well. Having an original name will help your business stand out, and reduces the chances of someone having that domain and username on social media.
Will you be setting up as a sole trader, a partner, or perhaps as a company? Each business structure has different legal laws, so you need to know which responsibilities will apply to you. Here's a quick rundown of these three main business structures:
There is also a range of other business structure options - to help you decide, business.govt.nz has developed a short quiz to help you work out which structure makes the most sense for your new business. There’s a detailed explanation of your answer at the end. However, to get more personalised advice on business planning, consider contacting a business advisor.
Every business owner should obtain a New Zealand Business Number (NZBN). Your NZBN will contain information that others need to know to do in order to do business with you - like your trading name and phone number - and will be linked to the NZBN register for easy access. When you update these details, organisations that you do business with can be notified automatically.
While it's not the first thing you need to do before opening shop, registering for the NZBN gives your business credibility. It’s also free, whatever structure of business you run.
Registration doesn’t stop there - the next step is to get a domain name, aka your address on the internet. You can review the Domain Name Commission's list of authorised registrars to register and manage your domain name.
If you've structured your business as a ‘company’, you’ll need to reserve your company name with the Companies Office. You must use the reserved name within 20 days to incorporate it.
As part of registering your business, you'll need to conduct trade mark research. A registered trade mark is one of the best ways to protect your brand once it's in the marketplace. You can search the trade mark register for free, or get a Search and Preliminary Advice (SPA) report from the Intellectual Property Office (IPONZ). It’s cheap, quick and easy, so it’s best to get it done.
You have to register your business for GST if you expect to earn more than NZ$60,000 in 12 months. Otherwise it’s optional. It can be beneficial to register voluntarily, especially if you expect to have plenty of expenses but not much income, as you might be able to claim some back from Inland Revenue.
You can easily register for GST online, here.
That wraps up part one. So far, we’ve talked about your business name and structure, and you know the important registrations to take care of. In part two, we’ll cover essential laws you need to know before you start your business.