So, your business is skyrocketing, growing faster than you ever imagined. But with this success comes potential pitfalls if you don’t navigate the expansion carefully. As you gear up for the new year, it’s crucial to assess your business’s foundations to ensure they’re sturdy enough to support your growth.

Getting the Structure Right:

Choosing the right business structure is vital for tax and legal reasons. Consult both your lawyer and accountant early on to determine the best structure for your needs. Consider questions like:

– Should you operate as a sole trader or establish a separate legal entity?

– Do your personal assets need protection from business risks?

– Which entity aligns with your current goals and allows for future expansion?

Setting up the correct structure from the start can prevent costly and time-consuming changes down the line.

Prioritize Good Governance:

If you opt for a legal structure like a limited liability company, understand the roles and responsibilities of directors and shareholders. Consider drafting a shareholders‘ agreement and constitution to clarify expectations and ensure compliance with laws.

Protect Your Brand:

Don’t overlook protecting your intellectual property, especially your brand, during rapid expansion. Ensure all relevant IP is owned by the appropriate entity and meets the legal requirements for registration.

Emphasize Written Contracts:

Having robust contracts or terms of trade is essential for buying from suppliers or selling goods/services to customers. Invest time and resources in creating legally sound agreements to avoid disputes later on.

Employ or Engage Properly:

With growth comes a need for more employees or contractors. Understand New Zealand’s employment laws and ensure everyone is engaged on appropriate terms to avoid legal issues.

Consult Professionals:

Engage your lawyer and accountant early in the process to ensure your legal and financial bases are covered. Together, you can focus on growing your business while they handle the legal and accounting aspects.

By prioritizing these foundational elements, you can avoid common pitfalls associated with rapid business growth and set your business up for continued success. If you have any questions or concerns, don’t hesitate to reach out to your lawyer for guidance.