Hi Bob
I have put some brief answers to your questions below. After reading your plans there are some very important things to consider. You would certainly want to separate your investments and your business. By having your investment properties and shares in a trust they are safe guarded. This protects from any potential loss from the business or franchise.
You also need to be careful with buying shares. Because if the IRD proves they are purchased for the reason of resale any capital gains will be taxable. It's important to do a business plan and some kind of evidence to prove otherwise.
If you want I would be happy to discuss with you over a coffee or a beer
. My details are on the signature.
1. First thing, is registering and using a company the right fit for all our plans?
This is a quite complicated scenario and there is benefits of setting up a structure which includes both a company and a trust.
2. I have read about Look Through Companies (LTC) but they don’t seem viable because we are already in the 33% tax bracket and would not offer any other advantages?
LTCs are only beneficial if you are making a loss.
3. How easy is it to register your own company? Is it worthwhile using a service like
http://www.registeracompany.co.nz ?
Registering your own company is not to difficult. I would not recommend using registeracompany as their fee is very high. The registration cost is $160.22 so they are making nearly $200 for the setup. We can certainly do the setup for $100.
4. Does a company need a registered accountant or can we do the books ourselves?
I would recommend using an accountant. Especially for the structure setup and getting this right from the start is important. Also preparing the tax returns I would recommend using an accountant, there are a lot of tricky tax rules which are hard to follow. Also the paying of dividends with imputation credits and tax minimisation is something really only accountants understand. We could do this for a very competitive price.
5. How does financing and taxation work for the company?
This can be difficult to answer simply. The taxation will be spread out between the structure. Your accountant will help you to pay the least tax possible.
5.1. How can we pay money from our personal accounts into the companies account to finance it while we are working fulltime and is this taxed?
This will not be taxed, however getting money out of the company is a different situation.
5.2. How can we withdraw money from the company back into our personal accounts if needed and how will this be taxed?
This will be done via dividends and imputing the tax paid by the company.
6. We would like to do everything ourselves if possible but if not would anyone recommend using a financial advisor or should we rather just focus on getting a professional accountant or both?
A financial adviser could be a good idea if you are planning to investment heavily in the share market. Without an accountant the structure would be very hard to setup and maintain. There is also the risk doing something incorrect and then paying for it heavily in the future if audited by IRD.
[Edited to remove details - please see forum rules 10 and 12.
http://www.enz.org/forum/showthread.php?t=40236]