Thinking about setting up a company? Here’s what you need to know

A Limited Liability Company (LLC) is a common next step for business owners who are ready to take things up a notch — whether that’s hiring staff, chasing big opportunities, or simply wanting a little more protection.

At its core, this structure separates you from your business. That means if something goes wrong, your personal finances are protected. Your savings, home, and car aren’t on the line if your business gets into debt or a legal dispute.

What makes a company different? A company is a legal entity all on its own. Once you register, the business gets its own NZBN, its own bank account, and its own responsibilities. You’ll be listed as a shareholder (aka owner), and you can add more shareholders down the track if you want to bring in investment or share ownership.

This structure is perfect for businesses looking to grow — it shows you're serious, professional, and ready for the next level.

Why set up a company? Well… there are some solid perks:

Limited personal risk: Your personal assets are separate from your business liabilities.
Tax flexibility: You only pay tax on the income you draw from the company — no double taxation.
Professional image: A company structure can give your brand extra credibility.
Funding options: Investors and lenders often prefer working with companies over sole traders.
Growth potential: You can bring in new shareholders, set up multiple directors, and expand operations more easily.

What’s involved in setting up? You’ll need to:

Choose a company name and make sure it’s available.
Register with the Companies Office (you’ll need a RealMe login for this).
Create a constitution or operating agreement – this sets out how the business will run, who makes decisions, and how profits are handled.
Get a company IRD number for tax purposes.

There’s a bit more admin involved than being a sole trader, but it’s manageable — especially with some good systems in place.

Is a company right for you? This structure works best if you're:

Ready to grow
Taking on more financial or legal risk
Wanting to bring in other people or investors
Looking to separate your personal and business life

That said, running a company does come with extra responsibilities — like filing annual returns, maintaining records, and keeping your finances tidy. If that sounds overwhelming, don’t stress — you don’t have to do it all alone.

Ako Tip: If you’re unsure whether to stay a sole trader or switch to a company, start by thinking about your business goals. If you’re planning to scale, bring on staff, or land bigger contracts, a company might be the structure that supports you best.

Assessing these factors can help you determine whether it's time to hire a bookkeeper to ensure your financial health and support your business growth.

By dedicating some time to familiarise yourself with these tools, you can maintain accurate financial records, ensuring a clear picture of your financial health without the need for professional bookkeeping services.

At Ako Cash Flow, we’re not just bookkeepers—we’re your financial empowerment partners. Our mission is to give you the confidence and skills to manage your own books with ease. With our tailored tools and expert guidance, you’ll learn how to track income and expenses, master cash flow, and make smart financial decisions that support your goals. We believe that financial independence is key to long-term success. That’s why our approach focuses on education and support, enabling you to take control of your personal or business finances and build a stronger financial future. Let's empower your journey together!

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