[CITG127 - ASSESSMENT] - How to Go About Setting Up Your Businesses

Becky Caulfield April 2, 2020 1
[CITG127 - ASSESSMENT]
Table of Contents
Module 1: Setting up your business....................................................................2
Introduction................................................................................................................ 2
Learning objectives.................................................................................................... 2
Laws and your small business.................................................................................... 2
Main small business Legislation................................................................................. 2
The Business Structure............................................................................................... 3
Types of Small Business Ownership........................................................................... 4
Sole Proprietorship/Sole Trader............................................................................... 4
Advantages:......................................................................................................... 5
Disadvantages:.................................................................................................... 5
Partnership.............................................................................................................. 5
Advantages:......................................................................................................... 5
Disadvantages:.................................................................................................... 5
Proprietary Company/Limited Liability Company....................................................6
Advantages:......................................................................................................... 6
Disadvantages:.................................................................................................... 6
Public Company....................................................................................................... 6
Business Registration................................................................................................. 7

Becky Caulfield April 2, 2020 2
[CITG127 - ASSESSMENT]
Module 1: Setting up your business
Introduction
This module is concerned with how to go about setting up your businesses. It is
important when starting out in business that you know and understand your
legal obligations. You will also need to consider the best structure to suit your
business and personal needs.
Learning objectives
After you have completed this lesson, you should be able to:
Understand legal obligations affecting small business.
Explain the different business ownership structures.
Understand the advantages and disadvantages of the main structures.
Know how to register a company.
Complete a SWOT analysis to evaluate your strengths, weaknesses,
opportunities and threats.
Laws and your small business
There are many regulations and laws covering business operations. Small
business owners must be aware of the restrictions, laws, and regulations
applicable to them.
In addition to the regulations governing various aspects of conducting a
business, certain types of businesses require one or more licences and/or
permits before they can begin trading.
Fulfilling all legal obligations can be frustrating at times, however, the
consequences of failing to comply with regulations are serious and potentially
expensive.
All business owners need to be aware of the legislation that affects their
business, especially the regulations, licences and approvals they may require, to
operate legally.

Becky Caulfield April 2, 2020 3
[CITG127 - ASSESSMENT]
Main small business Legislation
There are many acts of legislation that can apply to different small businesses.
Below is just a small selection. A full list can be accessed at
www.legislation.govt.nz.
Consumer Guarantees Act 1994
more about this later
Credit contracts and Consumer Finance Act 2003
Door to Door Sales Act 1967
Employment Relations Act 2000
Fair Trading Act 1986
more about this later
Food Act 1981
Health and Safety in Employment Act 1992
Holidays Act 2003
Human Rights Act 1993
Minimum Wages Act 1983
Personal Property Securities Act 1999
Privacy Act 1993
Sale of Goods Act 1908
Income Tax Act 2007
Business law is a complex body of law established for the purpose of protecting
businesses, employees, the community, and the government against
incompetent, illegal and unethical business practices. Business laws are those
laws that apply to and control the operations of businesses.
It is essential that the owner/manager of a properly planned business should
keep themselves informed of the ways in which the law can impinge on the
operations of a business. These may include:
the legal requirements involved
in setting up a business
liability for injury to consumers
on business
premises (This risk can be
insured against)
consumer protection legislation anti-discrimination laws
taxation requirements – personal
income tax rates tax instalments for
employees, customs a excise, GST,
etc.
Responsibility for superannuation
and workers’