Choosing the right legal structure for your business isn’t just a box to tick, it’s a strategic decision that can shape your growth, manage your risk, and support long-term succession. Whether you're just starting out or reassessing your current setup, understanding the key differences between sole traders, partnerships, companies, and trusts can help you make informed decisions that align with your goals. Sole Traders: simple, but limited Operating as a sole trader is the simplest business structure. It’s easy to set up, with minimal compliance requirements, and gives the owner full control over decision-making. However, this simplicity comes with limitations. Sole traders are personally liable for all business debts and obligations, which can expose personal assets to risk. Growth can also be constrained, as the structure doesn’t easily accommodate investment or succession planning. For small scale operations or early stage ventures, sole trading may be a practical starting point, but it’s important to reassess as the business evolves. Partnerships: shared control, shared risk Partnerships involve two or more people working together in business. They offer flexibility and shared responsibility and can be a good fit for professional practices or family-run enterprises. However, like sole traders, partners are personally liable for business debts, unless the partnership is structured as a limited partnership. A limited partnership is a business structure where general partners manage the business and are fully liable, while limited partners invest but have liability only up to their contribution. Clear governance is essential. A well-drafted partnership agreement should outline roles, decision-making processes, profit sharing, dispute resolution, and exit strategies. Without this, misunderstandings can quickly escalate and impact the business. Companies: structure for scale A company is a separate legal entity, which means it can own assets, enter contracts, and incur liabilities independently of its shareholders. This structure offers limited liability, making it a popular choice for businesses looking to grow, attract investment, or manage risk. Companies are subject to governance obligations under the Companies Act 1993, including maintaining accurate records, filing annual returns, and ensuring directors act in good faith and in the best interests of the company. Shareholder agreements and constitution documents play a key role in setting expectations and protecting interests. For many businesses, incorporating as a company provides the structure and credibility needed to enable growth while also supporting succession planning through share transfers or director appointments. Trusts: protecting assets and planning ahead Trusts are often used to hold business assets, particularly in family-owned enterprises. A trust separates legal ownership from beneficial ownership, which can help protect assets from business risk and support long-term succession. Trusts require careful governance. Trustees must act in accordance with the trust deed and in the best interests of beneficiaries. Regular reviews, clear documentation, and professional advice are essential to ensure the trust remains fit for purpose and compliant with legal obligations. While not suitable for every business, trusts can be a powerful tool for asset protection, estate planning, and intergenerational succession, especially when used alongside other structures. Structuring for success The right structure depends on your business goals, risk profile, and future plans. It’s not just about compliance, it’s about clarity, control, and confidence. Smart structuring can: Limit personal liability; support investment and growth; clarify governance and decision-making; enable succession and continuity; and protect assets and manage tax obligations. At Willis Legal, we work closely with business owners to ensure their structure supports both day-to-day operations and long-term strategy. Whether you're starting fresh, expanding, or planning for the next generation, we’re here to help you get it right.
We’re pleased to shine a light on Emma Roberts, a Partner in our Commercial team. Emma brings a wealth of experience in business and commercial law, with particular expertise in the sale and purchase of businesses, shareholder arrangements, commercial financing, and asset protection. Emma has advised on a wide range of transactions, including the sale of a $34 million company and a $18 million company in the past year. She also worked closely with an iwi collective on a proposed company purchase , preparing and presenting a comprehensive legal due diligence report. Emma also advises a number of well-known local businesses on their ongoing commercial matters, providing practical, strategic advice that supports long-term growth. Her approach is grounded in clarity and confidence. Emma believes in making informed advice and offering clients clear guidance on the best course of action, drawing on her extensive experience to ensure legal solutions are both robust and realistic. Clients value her ability to simplify complex issues and provide advice that is both practical and reassuring. One particularly memorable transaction saw Emma finalising a large-scale deal while on holiday in Bali , after a delayed completion date meant the matter couldn’t be delegated. Despite the challenge, she ensured the transaction was completed successfully, demonstrating her commitment to client outcomes (and was grateful for Willis Legal’s investment in cloud-based technology, meaning she could work from Bali). Emma is passionate about helping businesses set themselves up for success from the outset. She regularly advises on shareholders’ agreements, lease agreements, and other foundational documentation, areas where early attention can prevent costly complications later. Her work helps clients avoid common pitfalls and build strong legal frameworks that support future growth. Looking ahead, Emma sees exciting developments in the commercial space, particularly with the rise of AI and the shift toward remote and digital service delivery. She encourages businesses to stay agile and embrace these changes to remain competitive. Emma enjoys getting to know each business she works with, understanding how they operate and helping to put in place the right structures to support their goals. Her thoughtful, strategic approach makes her a trusted advisor to many . Emma has been with Willis Legal since she moved from Auckland back to Hawke’s Bay in 2012, and has been a partner since 2020. She is an integral part of our Willis Legal team and plays a key role in supporting the success of our clients.
A Shareholder Agreement Helps Everyone Stay on the Same Page