What Does A Liquidator Actually Do?

February 24, 2017
Insolvency is when an individual, partnership or company is unable to pay its debts as they fall due; its liabilities are greater than assets. Liquidation is one of the ways insolvent companies can be dealt with. Liquidators are appointed either by voluntary appointment or by the High Court. Once a liquidator has been appointed, the Company is formally “In Liquidation” and this will be noted on the Companies Register. This is a public register of all companies registered in New Zealand...

Trading On

February 24, 2017
There is a common misconception that the difference between Liquidation and Receivership is that a Receiver will ‘trade on’ to rehabilitate a business, whereas a Liquidator will stop the business from trading, make the staff redundant and sell the stock. However, this is not correct. The Liquidators have the option to allow the business to continue trading, if they believe that it is in the best interests of the company’s creditors. However, they will only trade on with a view to...

Focus on Retail

February 24, 2017
2016 was a challenging year, even for some of New Zealand’s larger retailers. We saw the Receivership and subsequent Liquidations of Dick Smith Electronics and the Valleygirl and Temt stores, the Liquidation of Nicholas Jermyn, and the Voluntary Administration and Receivership of Pumpkin Patch. In recent times, Nexia New Zealand’s Liquidators have also dealt with several retail outlets including a Womens’ Clothing Boutique and a Lotto Outlet and Gift Shop (the liquidation of this company was in no way related to...

Lifetime Value of a Customer

December 18, 2016
Most businesses need to ensure ongoing education of their team on the lifetime value of a new customer. Lifetime customers represent repeat business and repeat business equals profits: Assume that the lifetime period of a customer is between 7 to 10 years on average. Multiply the average sale by the number of times you expect to see that customer each year. Multiply the projected annual sales by the number of years’ expectancy for ‘lifetime’ This will give you some idea as...

Provide GST Registration Details to Remote Vendors

December 18, 2016
From 1 October 2016 non-resident businesses must charge and return GST where they meet the criteria to register for GST and they supply remote services (including online services) to New Zealand residents. As a New Zealand resident business, you won’t be charged GST on these supplies, if: You are GST-registered The supplies are part of your taxable activity, and You let the non-resident supplier know you’re GST registered and provide your New Zealand GST registration number or business number. Non-resident suppliers...

New Rules for Mileage Rates

December 18, 2016
A Bill is before Parliament which has a section dealing with tax deductions based on mileage. The calculation at present is easy. The rate is 72c a kilometre and the maximum number of kilometres you can claim for is 5000. Only the self-employed will be allowed to continue to use this basis for calculating their business mileage. The new system proposed will be a two-tiered system. You’ll have to use a logbook and keep it for three months once every three...

Electronic Signatures and the Paperless Office

December 18, 2016
As the world moves more and more into the digital and electronic environment, most countries worldwide have adopted legislation and regulations that recognise the legality of a digital signature and deem it to be a binding signature. New Zealand has also passed legislation that deals with this issue, and the ability to sign documents in this way is authorised in New Zealand by the Electronic Transactions Act 2002. This is overarching legislation and applies to both private and public sector activities...

Popping the Bubbly with your Clients this Christmas?

December 18, 2016
The Inland Revenue has changed the rules regarding the deductibility of food and drink purchased to gift to clients and suppliers. Food and drink purchased as a gift for clients or suppliers will now be subject to the 50% entertainment expenditure rule. This is due to food and drink being deemed as ‘entertainment’ in nature. You may find the following table useful to determine the deductibility of your various client gifts: Client Gift 50% deductible 100% deductible Bottle of wine or...

How to Reduce Bad Debts

December 18, 2016
Prevention is better than cure when reducing the number of bad debts: Avoid giving credit to a stranger, without undertaking a credit check. If you have to give credit without doing a proper check, be sparing. Giving credit can help you gain customer loyalty, but be careful. There is no obligation to give credit to anyone. Try to make it a habit, if your type of business will permit, to assume you will be paid on the spot. If it can’t...

Public Benefit Reporting Assistance

December 13, 2016
Public Benefit Entities (PBE’s) have had to prepare financial statements in accordance with the new reporting requirements as issued by the Accounting External Reporting Board (XRB) for periods beginning on or after 1 April 2015. A PBE is defined as a reporting entity whose primary objective is to provide goods or services for community or social benefit and where any equity has been provided with a view to supporting that primary objective rather than for a financial return to equity holders....
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