Do I need to set up a company? Why?
It depends on what your intentions are in the long term. If your long term goal is to build your business up and grow it so you can sell to someone else and make a capital gain, then yes, you should set up a company.
If your goal is to create income and build an on-going income for your family unit and it is your only source of income, then a partnership or operating as a sole trader is probably a better option.
With companies, the compliance costs with regards to the Companies Office returns and tax returns will be higher and you need to remember that any money received belongs to "the company". There could be tax implications of any money you withdraw and you need to be aware of that.
Do I need to register for GST?
Legally you are not required to register for GST until you reach $60,000 in sales. We wouldn't recommend that you register for GST until your income looks like it is going to exceed $60,000 in a financial year (A standard financial year is 1st April to 31st March). However, if your main customers are GST registered it may be better to do so, as you add GST to your sales, so it depends if your sales are GST inclusive or not.
Next week we will look at tax rates, claiming GST, ACC and PAYE.
Also, keep in mind that we are only a quick email or phone call away so you can book your FREE consultation with us.