The requirements for New Zealand resident directors of all companies incorporated here have now come into force. so have the strengthened identification requirements that require directors to disclose their date and place of birth.
Share sale agreements invariably provide for an agreed price that presupposes a fixed working capital balance at settlement. That balance is often agreed to be zero which will require the purchaser itself to ensure funding of working capital is available immediately after settlement.
These are a commonly used vehicle for managing the respective interests and expectations of vendor and purchaser. Conceptually they are straight forward; practically they are anything but.
The starting point with any proposed joint venture is the choice of structure. The most common form of joint venture is an unincorporated joint venture (UJV). An alternative is to form a special purpose company for the purpose (or a limited partnership or trading trust might be used).
LTCs and LPs are both useful tools for delivering flow through tax treatment, whilst offering limited liability just as with any ordinary company. This begs the question which of them to choose betwen for your business.
The major attraction with a limited partnership is its flow through tax treatment (albeit subject to a loss limitation rule) coupled with limited liability protection for the limited partners.
A brief word on using limited partnerships for land transactions. Developers will be familiar with the 10 year rule which is broadly that gains on disposal of land (that is not developed) will not generally be taxable where the land is held for not less than 10 years and was not acquired as part of a land dealing or developing business.