A growing proportion of businesses are limited-liability companies and fewer are sole proprietors, Stats NZ said.
A limited-liability company means personal taxes are separated from business taxes and personal assets are (typically) not at risk.
Of a total 528,170 enterprises, more than half (56 percent) were registered limited-liability companies at February 2017. Ten years ago (at February 2007), only 47 percent of businesses were limited-liability companies.
In contrast, individual proprietorships and partnerships, which are simpler forms of business, both accounted for a lower 28 percent of enterprises at February 2017. This was a significant 10-point drop from a 38 percent share these two business types together had 10 years ago.
“This drop closely corresponds to the share gained by registered limited-liability companies,” business register manager Mary Reid said. “It’s an indication that more New Zealand businesses now now prefer to operate under a corporate legal structure as opposed to non-corporate arrangements.’
At February 2017, registered limited-liability companies employed 71 percent of all staff in New Zealand.
Other business types (at February 2017):
- 65,480 enterprises operating as trusts/estates
- 10,210 societies and associations (incorporated and unincorporated)
- 3,880 charitable trusts
- a total of 3,220 central or local government organisations (their trading entities included) that employed 389,100.
Note: Business demography statistics only cover economically significant enterprises operating in New Zealand. These are mostly those with an annual GST turnover of $30,000 or more.
Source: Stats NZ