Conducting Business in NZ

The legal environment

PRESENTER: MIKE FORSTER (LLB (HONS)/BA)

The Law Guide Limited 2

Business Structures

• Sole Trader ― Free, no registration, simple― BUT personal liability ― Credibility, selling your business

• Partnership― 2+ sole traders, partnership amendment― No separate legal entity― Personal taxes― Personal liability

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Business Structures (Cont)

• Limited Liability Company• A “separate legal entity” (like a person)• Shareholders/Directors/Employees

― Advantages• Limited Liability• Credibility• Ease of investment/Succession

― Disadvantages• The cost ($170)• Compliance• Directors Duties

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Companies – Key Rules

• DIY compliance:― Directors/Share/Interests Registers― Paying yourself (Dividends)― “Major Transaction” Rules― SHAGs

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Contract Law 101

• What makes an agreement legally enforceable?― Offer― Acceptance― Certainty― Intention― Consideration

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Contract Law (Cont)

• Don’t technically need to be in writing• “Agreements to Agree”• Fairness

― “peppercorn consideration”― Incapacity

• Guarantees enforceable? ― Certainty?― Intention?

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Contract Law (Cont)

• Legally valid but practically enforceable?― Paper trail (emails)― Companies Register (shell co’s)― PPSR (get a read on their debt levels)― International Contracts

• Enforcement― Ordinary Demands― Disputes Tribunal ($30-$100; $15k)― Legal Action

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Consumer Rights

• Consumer Guarantees Act― Imposes minimum warranties for goods and

services provided to consumers• quality thresholds (multi-factorial)• “remedy and repair” as general consequence

• Fair Trading Act― Prohibits misleading or deceptive conduct in

trade― Objective: “an informed market”

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Intellectual Property

• Patents (Invention: “ANMOM”, “Inventive Step?)• Copyright

― All new expressions of ideas ― Low threshold (“MtM Skill and Labour”)― No registration – automatic right― Right to copy, use and adapt – 20 years― Owner : creator/employer― Copyright infringement

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Intellectual Property (Cont)

• Trademarks― Unique brand identifier: logos, words, colors― Can’t register TM if:

• Superlative• Confuse/mislead• Descriptive• Location of good

― Cost $100, renewable

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Creditor Avenues. Creditors

Secured Creditor

Unsecured Creditor

Enforce Security

Receivership LiquidationExecution / Attachment

Mortgage(Real Property)

PPSA(Personal Property)

Agreement

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Insolvency Hierarchy

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Contact Details

• www.thelawguide.co.nz• mike.forster@thelawguide.co.nz