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New Zealand | Synopsis on Law Reform (Steven Condie)


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New Zealand | Synopsis on Law Reform (Steven Condie)

  1. 1. Recent Company Law Reform in New Zealand Steven Condie Senior SolicitorMinistry of Business, Innovation and Employment 1
  2. 2. Introduction• Challenges to New Zealand’s company registration system• Companies and Limited Partnerships Amendment Bill 2
  3. 3. Challenges Facing New Zealand, and Responses• Misuse of New Zealand-registered companies• Implementation of Financial Action Task Force (FATF) recommendations• Pressure on New Zealand capital markets• Financial Markets Authority and regulation of financial service providers• AML/CFT legislation• Financial Markets Conduct Bill• Companies and Limited Partnerships Amendment Bill 3
  4. 4. Companies and Limited Partnerships Amendment Bill• Requirement for all companies to have a New Zealand-resident agent• Enhanced powers for the Registrar• New rules concerning takeovers• Criminalisation of certain directors’ duties 4
  5. 5. Takeovers and Directors’ Duties• Prohibiting companies under Takeovers Code from amalgamating under Companies Act• Criminal offences for: – Intentional breach of duty to act in good faith and in the best interests of the company – Knowing breach of duty to act or permit the company to act in a way that is seriously detrimental to creditors• Some concerns about these proposals 5
  6. 6. Resident Agents• Bill as drafted required resident agent for all companies• Responsible for ensuring compliance with administrative requirements• Parliamentary Select Committee concludes of limited assistance 6
  7. 7. Resident Director• All New Zealand companies to have director who lives in New Zealand or Australia• If Australian-resident, must be a director of an Australian company• Policy will affect less than 1% of companies, many of which are shell companies 7
  8. 8. Enhanced Registrar Powers• Confirm or correct existing information held on Register• Details of ultimate holding company• “Flag” companies where concerns about bona fides• Remove companies where: – Inaccurate information intentionally provided – Serious or persistent breach of the Companies Act• Prohibit individuals from acting as directors 8
  9. 9. Further Policy Directions• Beneficial ownership and control• Nominee directors• Open-ended powers of attorney• Financial service providers 9
  10. 10. Conclusions• Concerted efforts by policy and law-makers• An unattractive destination for those wishing to misuse New Zealand-registered companies• Retain our rating as one of the easiest places to do business• Remain a trusted jurisdiction 10