By Melissa Higham - 17 Oct 2011
Following on from an earlier blog, the Government has now
introduced the Companies and Limited Partnerships Amendment Bill
2011 to Parliament to tighten the rules and requirements around
company directors and the company registration process.
The main changes in the Bill are:
- Each company registered in New Zealand will be required to have
a resident agent if there is no director living in New Zealand or
in an approved jurisdiction. Resident agents will be responsible
for ensuring companies provide accurate information to the
Registrar of Companies, and will be liable if companies breach
their record-keeping and filing requirements under the Companies
Act.
- The Registrar of Companies will be given new powers to
investigate and deal with non-compliance with the Companies Act.
This includes the power to 'flag' companies on the register that
are under investigation.
- Companies that provide inaccurate information or persistently
fail to comply with the Act will now be able to be removed from the
register. The Registrar will also be able to ban directors of such
companies from taking part in the management of any company for up
to five years.
- Similar changes will be made to the Limited Partnerships Act,
so that those misusing New Zealand companies cannot avoid the new
regime by registering limited partnerships instead.
- The Companies Act will be better aligned with the Takeovers
Code to ensure shareholders understand the effect that changes in
company control will have on the value of their shares.
- Criminal offences will be introduced for directors who commit a
serious breach of their duties to act in good faith and in the best
interests of the company, and to not carry on business in a way
that risks serious loss to the company's creditors. Directors who
commit these offences are liable for imprisonment of up 5 years or
fines of up to $200,000.
The amendments are designed to increase the Companies Office
ability to identify and protect against companies engaging in
criminal activity in New Zealand from overseas, increase confidence
in New Zealand's financial markets and in New Zealand's regulation
of corporate forms, and to ensure New Zealand remains a trusted
place to do business.
The current Government intends to enact these changes in the
first half of 2012.