There are two popular kinds of business forms operating in the country, they include, the Limited Liability Company and Branch/Representative office. Their establishment is authorized by the Companies Act 1993 (Companies Act). All limited liability companies (LLCs) have separate legal personalities from the shareholders and directors. They are incorporated for an indefinite period with or without a Constitution, which can amend the extent of the provisions of the Companies Act. An LLC without a Constitution is governed by the provisions of the Companies Act. It can choose to have a Shareholders’ Agreement between some or all of its shareholders; this agreement does not have to be registered with the NZ Companies Office.
There is a liability for the debts incurred by the LLC, except when the shares held are not fully paid. The Board of Directors manages the affairs of the company subject to various statutory and common law obligations. The board delegate power in accordance with restrictions in the Constitution or Shareholders’ Agreement (if any). Details of the director, shareholder, and ultimate holding company should be registered with the NZ Companies Office and made accessible on the online register. The company can undertake business activities and enter into any transaction.
If you are looking to establish a limited liability company, here is a guide on limited liability companies, how to incorporate a limited liability company in New Zealand, and the process of incorporation.
Features of an LLC
At the time of the company’s incorporation, it is required to have at least one shareholder. Even though there is no requirement that owners live in the same location, overseas shareholders may be required to have their identities verified. A limited liability company (LLC) is required to have at least one director, but this number can be increased or decreased according to the company’s constitution or the shareholders’ agreement (if any). Directors of a limited liability corporation (LLC) must either be New Zealand residents or residents of Australia who are also directors of an Australian-based company.
The process of incorporation
The process of incorporation entails the filing of an application with the New Zealand Companies Office. The following documents are requested during the registration; application to reserve a company name, details of the directors and shareholders, including a letter of consent and identity verification information, company details, constitution (if any), involvement of notary, company register, governmental authorities, etc. A limited liability company may choose to apply for an IRD number with the Inland Revenue Department. It can also register as an employer and for goods and services tax (GST) with the NZ Companies Office. However, the following information has to be provided for registration:
- An IRD number for the directors and shareholders
- Business Industry Code (BIC) for the entity
Information to be provided during the incorporation
The following information has to be filed with the New Zealand Companies Office during the registration:
- Personal details of the directors such as address
- Details of Shareholders
- Details of Ultimate holding company details (if any)
- Financial statements (if required)
- The company information includes the number of shares
- Constitution (if any)
Note that all information aside from the date of birth of the directors is made available on the online register.
Timeline of the process
After the name of the LLC is approved by the New Zealand Companies Office, and all the supporting documents of the company are provided, the process takes one to two business days to complete.
Cost of the process
The major costs of registration include the legal and accounting fees (if any), a New Zealand Companies Office fee for the name reservation, and registration, which is NZ$115, without a GST of 15 percent, if any.
