The dangers of Changing Your NZ Company Shareholding
With the modern world we live in it’s all too easy to change the shareholdings in your company on a whim using the online services of Companies Office. Compare this with the old days when it was necessary to fill in various paper forms and resolutions which were so difficult to understand you had to bite the bullet and telephone your lawyer or friendly accountant for help.
Now when you telephoned your lawyer he or she would tell you to ask your accountant first because they knew that a change in shareholding could bring about dire tax consequences which can be very costly indeed. You could miss on all your company tax losses completely. In addition, the tax credits which accumulate when the company pays tax (and which you can use to reduce your personal tax bill when you withdraw profits from the company) could be eliminated and if you own one of the new Look Through Companies (LTC’s) the flow of your losses can be adversely affected.
So what you thought may save a few $ in fees could in fact cost you tens of thousands of dollars. Better get your accountant to sort these things out for you. A good accountant will probably throw in this type of task for free, especially if they are your registered office, file your annual return for you, and make sure you comply with all of your statutory records requirements under the Companies Act so you can relax sure in the knowledge you’re in good hands.
Now if you don’t dare to speak to your accountant because they’re so darned expensive don’t just lie back and take it – find one who’ll give you a fixed price and build in all such minor but irritating duties!
If you need help with your company shareholding (or just want to reduce your accounting fees) contact Nick on 0800 ASK NICK or email firstname.lastname@example.org.