Starting new business

[Rogan]

I apologize if I sound inexperienced but my knowledge on business structure isn't great.

I'm a computer science student and I've been creating apps/games/software/mods with the occasional help from of my classmates.
No biggie, but we are currently working on something larger that we could eventually monetize.

I've been reading that it's best to start as a Sole Trader because it's easy with zero paper-work.

My questions are:
1. Can I use a business name/brand/logo to conduct my business with, or is this only allowed once incorporated?
2. Are there any tax / fees I should be aware of? Obviously it's going to start out small and I doubt the money coming in will be great. When should I start worrying about tax?
3. Due to the nature of the business we estimate majority of our paying customers will be from places outside of NZ. Does this raise some further legal / tax issues that I should concern myself with?
4. How often do I have to send financial reports to IRD?
5. How do I go about "employing" a friend? Note that the starting money is dismal and they'll basically be working for free because they're mates. Whether i'm a sole trader or become incorporated, is this legal, or do I have to pay them minimum wage?



Looking for some advice from anyone with business knowledge/ experience.

Thanks

[JandM]

There are some useful/trustworthy websites among the hits here. http://www.google.co.uk/#output=sear...iw=818&bih=521

[Rogan]

Thanks, I've actually read almost all of those.

I was just looking for some extra advice and solid answers to those questions because the aren't too clear on them. (especially questions 1,3,5)

[eternalkiwi]

Your business name can be anything relevant you choose (within common sense limits). If you are a sole trader you can just use your business name, though sometimes you need to include [your name] trading as [business name], (Trading As is sometimes abbreviated to T/A).
You need to pay tax each year for all profits your business makes, as a sole trader this is taxed at the relevant tax rate for all of your income.
If you expect or have sales of over $60,000 per year you need to register for GST with IRD & charge 15% on all your (NZ based) sales
If you do not need to register for GST you only file your tax return (IR3) annually
If you employ someone to work for you in a paid job, the minimum wage usually applies. People can work voluntarily for you or on commission.


If you make an appointment with a Chartered Accountant, many offer the first meeting at no or little cost.

[PrivateBoxNZ]

I apologize if I sound inexperienced but my knowledge on business structure isn't great.

My questions are:
1. Can I use a business name/brand/logo to conduct my business with, or is this only allowed once incorporated?
2. Are there any tax / fees I should be aware of? Obviously it's going to start out small and I doubt the money coming in will be great. When should I start worrying about tax?
3. Due to the nature of the business we estimate majority of our paying customers will be from places outside of NZ. Does this raise some further legal / tax issues that I should concern myself with?
4. How often do I have to send financial reports to IRD?
5. How do I go about "employing" a friend? Note that the starting money is dismal and they'll basically be working for free because they're mates. Whether i'm a sole trader or become incorporated, is this legal, or do I have to pay them minimum wage?

Thanks

Hey - sorry this is a little behind the times but thought I would add my two cents. This is based purely on my own experience and does not reflect any kind of professional advice!

1. Absolutely. The thing is you won't have any protection (eg. someone can steal it) unless you either trademark or incorporate. Incorporation (eg. starting a company) will protect your name. Trademarking can protect name and / or logo. Trademarks are a little tricky / costly to enforce.
2. Three taxes to watch out for - Income tax, GST and ACC. Generally speaking if you are not making any profit there will only be ACC to pay. Although you need to make sure your records reflect that. Fee's to get started are very little (which is a great thing about NZ) but you could spend time / money on your accounting to make sure everything is in order. You should be worrying about tax from day one... the IRD has a huge amount of power and needs very little encouragement to flex their muscles. The general rule of thumb is putting aside a third of any money you make for the tax man.
3. This could mean the services you provide could be exempt from GST. Your accountant will be able to help here. One thing about overseas clients is that it is impossible to chase them for money - get payment in advance and / or retainers prior to commencing work.
4. I think you mean "Returns". A return is your statement of financial results from the year. If you are GST registered this could be every 2 month, 3 months or 6 months. You will need to file an annual return every year.
5. If you "employ" someone you get to pay ACC and will have to file employer returns every month. We use iPayroll for managing this. It is much easier to either 1) Contract them 2) Give them shares in the company. Both of those options will probably require to get legal advice.. although if you are mates then contracting or shares can work well in the early days.

When you are starting out GST can be a major hassle... but it is good for two reasons:
1) If you are not making a profit your GST returns will get you a refund. This is because your expenses are more than your income. This is handy in the early days.
2) It makes you get used to keeping good accounting records. This can be a headache but really you want your business humming along with these types of processes sorted early on.

Hope that helps.