Start­ing up a com­pany

Kapi-Mana News - - OPINION/ NEWS -

If you’re think­ing of start­ing a com­pany, it pays to sort out a few things in ad­vance. Com­pany Name The first step to in­cor­po­rat­ing a com­pany is to re­serve a com­pany name. You can check whether the pro­posed name of your com­pany is avail­able on the Com­pa­nies Of­fice web­site. It is also a good idea to check whether there is a trade­mark us­ing the pro­posed name of your com­pany (or words very sim­i­lar) and to find out what do­main names are avail­able us­ing the words of your name. This will give you an idea of whether oth­ers are us­ing sim­i­lar names or whether you may be breach­ing in­tel­lec­tual property laws by us­ing the pro­posed name of your com­pany. Di­rec­tors Each com­pany must have at least one di­rec­tor. The Com­pa­nies Act sets out who can be a di­rec­tor, in­clud­ing: Be­ing over 18 years of age. Not hav­ing been con­victed of a crime of dis­hon­esty in the last five years. Not be­ing an undis­charged bank­rupt. Di­rec­tors man­age the com­pany’s dayto-day busi­ness and owe du­ties to the com­pany, to its share­hold­ers, and to oth­ers deal­ing with the com­pany.

There are harsh penal­ties for breach­ing di­rec­tor’s du­ties, so make sure you are fully aware of your du­ties as a di­rec­tor. Share­hold­ers Again, each com­pany must have at least one share­holder, who can be (but does not have to be) one of the di­rec­tors.

Share­hold­ers are the own­ers of a com­pany.

Share­hold­ers have voting rights and have the right to a share in any div­i­dend.

Gen­er­ally, they have no right to par-

RAINEY COLLINS LAWYERS tic­i­pate in the man­age­ment of a com­pany’s day-to-day busi­ness. Shares A com­pany can have any num­ber of shares.

When choos­ing the num­ber of shares for your com­pany, make sure it’s an eas­ily di­vis­i­ble num­ber.

Think about whether you will have more share­hold­ers in the fu­ture and how many shares each share­holder will have. Con­sti­tu­tion A con­sti­tu­tion gov­erns how your com­pany is run. It is not com­pul­sory to have a con­sti­tu­tion, and if you don’t, the terms of the Com­pa­nies Act ap­ply.

If there are some parts of the Com­pa­nies Act that you don’t want to ap­ply, or that you want to amend, get a con­sti­tu­tion.

You can adopt a con­sti­tu­tion at the time of in­cor­po­ra­tion or at any time af­ter­wards. IRD and GST reg­is­tra­tion At the time of in­cor­po­rat­ing your new com­pany, you can choose to ap­ply for an IRD and GST num­ber. This is a good idea if you will be trad­ing im­me­di­ately.

You should ob­tain ac­count­ing ad­vice be­fore es­tab­lish­ing a com­pany to en­sure you are choos­ing the most ap­pro­pri­ate struc­ture for your busi­ness. Share reg­is­ter All com­pa­nies are re­quired to keep a share reg­is­ter record­ing the de­tails of cur­rent and past share­hold­ers. There­fore, you should make sure you have a share reg­is­ter as soon as you in­cor­po­rate the com­pany. Open­ing min­utes Af­ter in­cor­po­ra­tion, the com­pany should hold a meet­ing of the board of di­rec­tors and take ‘‘open­ing min­utes’’.

Al­ter­na­tively, the nec­es­sary res­o­lu­tions could be passed by di­rec­tors in writ­ing, rather than at a meet­ing.

The main mat­ters to at­tend to in­clude:

Re­solv­ing who will chair the board, and the au­di­tor, lawyer, man­ag­ing di­rec­tor and sec­re­tary (as ap­pli­ca­ble).

Con­firm­ing that all mat­ters in con­nec­tion with the reg­is­tra­tion of the com­pany have been at­tended to, in­clud­ing the date of in­cor­po­ra­tion, and tabling of a copy of the cer­tifi­cate of in­cor­po­ra­tion, to­gether with (if ap­pli­ca­ble) the con­sti­tu­tion.

Record­ing who has con­sented to act as di­rec­tors and share­hold­ers and re­solv­ing that the shares were is­sued for the agreed price and that the de­tails have been recorded in the share reg­is­ter.

Record­ing the reg­is­tered of­fice and ad­dress of the com­pany.

Re­solv­ing to es­tab­lish a bank ac­count, and who is au­tho­rised to sign cheques or make on line pay­ments.

Re­solv­ing (if ap­pli­ca­ble) to rat­ify any pre-in­cor­po­ra­tion con­tracts.

Get­ting these steps right first can save a lot of time, trou­ble and ex­pense in fix­ing them up later.

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