1. Recent Company Law Reform
in New Zealand
Steven Condie
Senior Solicitor
Ministry of Business, Innovation and Employment
1

2. Introduction
• Challenges to New Zealand’s company registration system
• Companies and Limited Partnerships Amendment Bill
2

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. 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. 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. 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. 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. 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. Further Policy Directions
• Beneficial ownership and control
• Nominee directors
• Open-ended powers of attorney
• Financial service providers
9

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