I'm no Tax expert
As I was investing in shares and buying and selling before my accountant talked me into the structure ..I'm not expert but it seemed a smart move .... the bases of my company is as a trading entity ... anything the company buys it plans to sell in the short-mid term for a profit
recently I purchased two sections of land claimed the GST then sold them 1yr later for a tidy profit ....will pay the GST on the total sale in october ....but in the meantime those funds are invested in the S/M ...
I'm also buying a small vending business which will be added into the structure >>buys products to sell
I don't think it gives me a much lower Tax saving compared to being a sole trader paying tax at my personal rates....(which over the years would have worked out much the same if not higher)
For me it's also the redirection of the risk from you as an individual (when operating as a sole trader) to the company. A limited liability company is a legal entity in its own right. It can hold property in its own name, can sue and be sued and has an indefinite existence (unless forcefully brought to an end). A Company allows shareholders to limit their maximum possible liability for the debts of that company to the amount of the paid capital in the company...
And I guess on ones Ego driven side as a company you own the name of your company ..so if you're a brilliant trading and continuing make profits over the years then the banks will respect the company and lead you funds on the back of the company's record and capital ....you of course could sell shares in the company to other investors etc
My goal of course was to take "My company" to that stage .. where I could give up the day job and continue as the sole director (with wife as company sec of course with her 10%)
-business structure-
https://www.myob.com/nz/blog/which-b...ould-i-choose/
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