[ESTABLISHING A BUSINESS ENTITY IN NEW ZEALAND] 361
obligations, however would, for the most part, foreseeably be complied with in any event in the ordinary course of business. Generally, a company is deemed “large” if at the balance date of the past two accounting periods: 1. In the case of a New Zealand company: a. Assets of entity and subsidiaries > $60m OR b. Revenue of entity and subsidiaries > $30m c. More than 50 employees on average during the financial year 2. In the case of an overseas company (with exceptions for Australian companies): a. Assets of entity and subsidiaries > $20m OR b. Revenue of entity and subsidiaries > $10m NZX Listing New Zealand’s securities markets are operated by NZX. There are three securities markets:
Zealand company with 50 or more shareholders and 50 or more share parcels). The Takeovers Act provides minimum standards which must be complied with if you are attempting to acquire shares in a code company. The Takeovers Act established the “Takeovers Code” and also implemented the “Takeovers Panel” which sits in deliberation on takeover offers. Generally, the Takeovers Code must be complied with if you attempt to acquire (or increase to) more than 20% voting rights in a
code company. PARTNERSHIP
A partnership is deemed to exist when two or more ‘partners’ carry on business in common with a view to profit. Generally, a partnership agreement is drawn up to reflect the terms of the partnership. A partnership agreement is however optional, and in the absence of a partnership agreement, the provisions of the Partnership Law Act 2019 apply by default. There are no formal registration requirements in New Zealand. There are also little statutory obligations and requirements, and for the most part, partners have the flexibility and freedom to structure and operate their partnership as they wish. Often the obvious disadvantages of partnerships are the absence of a separate legal identity and limited liability protection. Partnerships are therefore becoming less common now as the ‘hybrid’ limited partnership option (discussed below) provides similar benefits without these two main disadvantages. Notable advantages and disadvantages of partnerships are as follows:
1. New Zealand Stock Market (NZSX) 2. New Zealand Debt Market (NZDX)
3. New Zealand Alternative Market (NZAX) If you are interested in listing a company in New Zealand, you must apply for listing through the NZX and comply with the NZX listing rules. The same requirements apply to overseas companies as apply to New Zealand companies, and NZX recognises dual listing. Takeovers The Takeovers Act 1993 (‘Takeovers Act’) and its regulations apply to a “code company” ( i.e., either a New Zealand listed company or a New
Advantages
Disadvantages
ILN Corporate Group – Establishing a Business Entity Series
Made with FlippingBook Ebook Creator