Experience Area F Flashcards
What is the purpose of the Building Act 2004
Sets the performance standards for buildings, regulates building work and outlines the requirements for LBPs
What is the purpose of the Registered Architects Act 2005?
Repeals the Architects Act 1963 and protects the title of “Architect” and “Registered Architect”. It established a system of registration, a code of ethics and sets up the statutory body- the NZRAB.
What is the Registered Architects Rules 2006
Sets out the requirements for registration, standards for ethical conduct towards clients,public, other registered architects and the profession.This also outlines the rules for disciplining an Architect.
Explain the purpose of the Resource Management Act 1991
Outlines the methods for sustainable management of natural resources, including how to best manage any undesirable effects.
Explain Consumer Guarantees Act 1993
Outlines the quality guarantees that a business must provide when they sell goods or services to a consumer. This act relates to good and services that are normally bought for household or personal use.
What is the Contractual Mistakes Act 1977
Mitigates the arbitrary effects of mistakes on contracts.
Construction Contracts Act 2002
Outlines the process of resolution when disputes arise, ensures regular payments to all parties to a construction contract.
Where joint and severally liable comes in.
Contractual Remedies Act1979
Allows a party to claim compensation should the agreed contract be based on incorrect information.
Contractual Remedies Act1979
Allows a party to claim compensation should the agreed contract be based on incorrect information.
Health and Safety at Work Act 2015
Relates to the health and Safety of employees, and others at work.
What are the different options for business structures?
Sole Practitioner, Partnerships, Companies and Joint Ventures
What are the pros and cons of being a Sole Practitioner?
Pros:
Easy to set up - you can get up and running quickly
Start-up costs are low - there are no legal or registration fees
You control the business and get all the profits
you can offset losses against other income
Cons:
You’re liable for all debts - this may put your personal assets at risk
It’s harder to grow a sole trader business
Getting loans or investment can be more challenging
It’s harder to see as a working business
You can hire staff to help run the business. If you do hire staff you’ll need to register with Inland Revenue as an employer and meet a number of obligations.
Tax: You pay tax on all income you earn from your work. You can claim work expenses to reduce your income tax. You’re responsible for all your business debts, including tax and ACC levies, but you also keep control of the business and its profits. At the end of each financial year you must complete a tax return and submit it to Inland Revenue.
What are the pros and cons of a limited liability company or LLC?
Pros:
Shareholders liability is limited to the amount they paid for their shares
your tax rate is lower than top personal rates
you have more credibility in the market
It’s easier to sell a business because it’s a separate entity
The business can grow indefinitely - it’s not tied to one person
It’s easier to get funding and investment
Cons:
There’s more regulation than for sole traders and partnerships
Companies can need more investment to grow
Directors need to understand their responsibilities
Staff:
If you hire staff to help run the company then you need to register as an employer with Inland Revenue and meet a number of obligations
Tax:
A company pays tax on its profits - the income left over after taking away expenses. If the company distributes profit to its shareholder, shareholders will pay income tax on the dividend buy may also get tax credits to help them meet that obligation.
If a company’s expenses are more than its income, it makes a loss and may not have to pay tax.
What type of company is Ashton Mitchell?
Ashton Mitchell is a Limited Liability Company with 4 directors who are also shareholders (via different entities) There are 2 companies within Ashton Mitchell - Ashton Mitchell Limited and Ashton Mitchell Residential Limited. AML handles commercial projects and AMR handles residential projects. There is also Ashton Mitchell Group which owns all the building, computers etc. This is a way of splitting risk, so if one company is sued the other can continue work. As the building and computer assets are part of a different company that does not complete work these cannot become part of a settlement if a claim is brought against AMR or AML.
What is a limited liability partnership?
This is similar to a sole practitioner however between two or more persons. An agreement between the partners sets out how profits, debts, and work will be shared.
Pros:
being able to share a bigger work load than that of a sole trader - wider and bigger client base can be worked and targeted
each partner can specialize where strengths lie
Cons:
does distribute risk between partners, however can still be personally liable debts the partnership incurs.
need to agree between the partners how debts, profits and work is shared.
