Last month a reader drew our attention to the present Mayor’s directorship of a company associated with the council’s quasi-official photographer John (Jack) Penman.

The response below that the amount of business billed the council by the latter in the year to 30 June, $7,800 and not in the name of the company concerned, means that prima facie it is a non-issue.

However, it is an expectation that elected members will fully declare their commercial interests which the present Kapiti mayor failed to do.

The main reason for creating a company is to legally separate the company’s liabilities and the owners’ personal assets and so provide protection for them. Most lenders like banks will, however, at least require personal guarantees and often more. Two secondary reasons to form a company are to protect the name, and to provide for the possibility of additional shareholder-investors at some stage.