If you’re starting a new business, there are a few financial and legal obligations for you to know. We’ve put together a checklist for new business owners containing the things you need to stay on top of.
Choosing sole trader or a company
It can be tricky to get your head around the different business structures when you first start a business. What’s your long term plan?
If you plan on staying small, you could set yourself up as a sole trader. It’s one of the most accessible options if you are starting out. A partnership is a good option if you plan to run your business with someone else. A company is a legal entity separate from its owners and is responsible for assets and debts. If you have growth on the horizon, incorporating your business as a company can provide some great benefits.
If you want to know which business structure is best for you, check out this helpful article.
Registering for GST
If your business is earning (or expecting to earn) over $60,000 per annum, you are legally required to register for GST. If you are earning under $60,000 per annum, it is your decision if you’d like to register for GST.
If you are registering for GST, you will need a GST number – as a sole trader, you can use your personal IRD number, and as a company, you can register for a company IRD number.
There are many different types of insurance you might need for your business, such as vehicle, building or liability cover.
It’s a good idea to sit down with an adviser to make sure you’ve got everything that’s important to you and your business covered.
Keeping up to date with your bookkeeping and accounting systems is important. It’s a good idea to have an accountant on hand to see how you’re tracking throughout the year and to help you determine how to meet your tax obligations.
Putting aside 30% of your sales into a separate bank account during the year will mean you can pay your annual tax bill without worry.
Employing staff can be a huge help when you start a business, but it is important to remember that you have responsibilities as an employer.
You will need to have a contract ready before they start, register as an employer with IRD, and sort out any resources you may need including wages, insurance, tax levies, computers etc.
COVID-19 wage subsidy
If you’re eligible to claim for the COVID-19 wage subsidy, it’s necessary to have all of your financial records in order to prepare evidence to support your claims.
You need to be able to demonstrate how the lockdown has had a declining affect on your revenue.
As an employer, you can also apply for The Leave Support Scheme & Short-Term Absence Payment for when employees must miss work due to COVID-19 isolation or testing and cannot work from home.
Starting a business is an exciting venture, but there’s a lot to consider. If you’d like to sit down and make sure you have everything sorted, get in touch with us today!
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