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If you own a business, you may be personally liable for the debts of the business, or financially responsible in the case of accidents or other failures as it is your duty to keep employees and the public safe. Even if you operate your business through a limited liability company, there are circumstances in which you may be legally responsible.

A new year, a new beginning. If becoming your own boss was a New Year’s resolution and you are actually doing it, then first of all congratulations! It takes guts to become self-employed but for many people, the benefits outweigh the risks. How you get from point A to point B is completely up to you now and, if you do it right, your earning potential is unlimited.

Like any relationship, partnerships can have their stresses. If you’re in business with another person, whether you trade as a partnership or as a company, you should have a well-written agreement in place. A good solicitor can help you identify possible issues and present solutions, and help you draft the agreement. Then you and your business partner can avoid the pitfalls of partnerships, as you will both have a thorough understanding of how the business is to be managed in the future.

If you’re planning an overseas holiday over the Christmas break, or if you’re overseas at any other time of the year, it’s important to think about how your business will run without you being there. You’ve probably organised the day to day running of the business while you’re away, but you may not have thought about what might happen if formal documents need to be signed in your absence.

In business, there are ups and downs. The loss of a key account, unrealistic assets on the balance sheet, staff turnover, slow stock turn, rising debts and slowing growth. It can happen to the best of us. If red flags like these are dealt with early on, they can often be turned around and the business will keep going strong. But if a company gets to a stage it can’t pay its debt, liquidation may be on the cards.

Although it sounds somewhat terrifying, there’s a good reason for the Anti-Money Laundering and Countering Financing of Terrorism Act that’s been in force in New Zealand since 2013. According to figures released by the Ministry of Justice, about $1.35 billion from the proceeds of fraud, illegal drugs and trafficking is laundered through everyday New Zealand businesses each year.

Asset protection is one of the most common reasons to set up a trust, but at some stage, the trust may no longer be relevant. This could be due to changes in the law, or changes in your individual circumstances. Winding up a trust can be relatively straightforward, but it is most important that trustees get legal and accounting advice about distributing trust assets, to make sure that they don’t incur liabilities.

Establishing a trust can be an effective way to protect your property and assets from business risk. In a nutshell, it means transferring legal ownership of your assets to trustees while you can continue to use and enjoy them for as long as the trustees permit.

Buying an existing business instead of starting one from scratch can make good sense. You can skip the precarious start-up phase and hit the ground running. That’s exciting, but it comes with a whole lot of new responsibilities, new premises, new staff, new customers, perhaps a whole new industry.

If you have property in a trust, or if you own a company and you’re planning on leaving the country, don’t simply rely on your Enduring Power of Attorney (EPA) for property. A company is a separate legal person, and even if control lies solely with you, signing a personal Power of Attorney does not give your attorney the right to sign for you in your capacity as a Director or Trustee. What you need, is a Deed of Delegation.