In New Zealand, companies are often the preferred vehicle when setting up a new business. They are well understood, underpinned by well-functioning
legislation, flexible, and liability is generally limited to the amount of a shareholder’s investment.
However, the tax rules surrounding companies can be complex and not well suited to small businesses. In acknowledgement of this, the Look Through Company (LTC) regime exists to provide the corporate benefits described above, while ignoring the corporate form for tax purposes. Instead, an LTC is treated as a partnership for tax purposes and profits or losses ‘flow through’ to the shareholders.
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