Business structures in New Zealand: sole trader, partnership and company

This page reports what the official source says. It is not legal advice: ask the office named here. The sources are the business.govt.nz pages run by the Ministry of Business, Innovation and Employment and three Inland Revenue pages, all read on October 9, 2026. They apply to any business and say nothing particular about tree work. The page says nothing about which structure suits any tree business. For the United States and the United Kingdom, see business structures in the United States and United Kingdom.

The three structures

business.govt.nz sets out sole traders, companies and partnerships as structures. It says different business structures come with different legal and financial obligations. It also has a page on less common structures and says to get professional advice before using one.

Structure	What the two sources say
Sole trader	business.govt.nz: no legal company is needed, but Inland Revenue must be told and the owner needs a personal IRD number; the owner is personally responsible for all income and losses. Inland Revenue: self-employed people are taxed as individuals
Partnership	business.govt.nz: two or more owners share the business resources and skills and split profits and losses. Inland Revenue: partnerships do not pay income tax on profits; the partners pay tax on their shares
Company	business.govt.nz: business and personal finances are separate, which the page says limits risk; the company is registered at the Companies Office, files an annual return and has at least one director. Inland Revenue: most companies pay 28 per cent and file an IR4 return each year

Sole trader

The business.govt.nz sole trader page lists contractors, tradies, small business owners, artists and craftspeople among sole traders. It says a sole trader chooses the business name and logo, makes all the decisions and keeps all the profits, and may not be eligible for things like sick leave. It says a sole trader calculates and pays their own tax, including income tax, ACC levies and GST where it applies. It also says Inland Revenue runs free seminars for sole traders on income tax, GST, expenses and record keeping.

Partnership

The business.govt.nz partnership page says partnerships are easy to start and most common in professions such as law, accountancy and farming. It lists partnership agreements, hiring staff, registering with government agencies and finances as things a partnership covers. Inland Revenue says partnerships file an IR7 income tax return each year showing the profit or loss allocated to each partner, and each partner also files their own IR3 individual return showing their partnership income or losses.

Inland Revenue names two kinds. In a general partnership, profits and losses are shared equally unless the partnership agreement says otherwise, and if there is a debt each partner can be made to pay the full amount. In a limited partnership there are general and limited partners, and a limited partner is liable for partnership debt only up to the amount they invested.

Company

business.govt.nz says a company has to be registered at the Companies Office and file an annual return to confirm it remains a company. It must have at least one director and may have shareholders. The Inland Revenue companies page lists a look-through company, where profits and losses flow on to the owners, and a qualifying company, whose tax rules aim to treat the company and its shareholders as one entity. It also describes the shareholder current account: when a shareholder draws or borrows more from the company than they have loaned to it, the account becomes overdrawn, and Inland Revenue says that may have tax consequences.

Tax rates and registrations

Business type	Rate Inland Revenue prints
Self-employed	The tax rate for individuals
Most companies	28 per cent
Unincorporated organisations	The tax rate for individuals

Inland Revenue adds that businesses generally file their first return at the end of the first year and pay in a lump sum, then pay provisional tax in instalments. The business.govt.nz starting a business page names income tax, GST, ACC levies and employee-related taxes such as PAYE as the main tax types, and says GST is paid when a business earns more than NZ$60,000 over 12 months, or if it has certain business structures. It lists a RealMe login, a New Zealand Business Number, a myIR account and, for a company, registering the company name as the registrations to make.