Bill introduced to tighten rules around companies
Hon Simon Power
Minister of Commerce
13 October 2011
Bill introduced to tighten rules around companies
A bill that tightens rules around company directors and company registration was introduced to Parliament today by Commerce Minister Simon Power.
“New Zealand has an international reputation as one of the best and most trusted places in the world to do business,” Mr Power said.
“However, that is threatened by overseas interests using New Zealand-registered shell companies to undertake criminal activity.
“The Companies and Limited Partnerships Amendment Bill will aid in stamping out this kind of behaviour and help ensure New Zealand remains a trusted place to do business.”
The bill will:
• Require each company registered in New Zealand 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.
• Give new powers
to the Registrar of Companies 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.
• Allow the removal of companies from
the register if they provide inaccurate information or
persistently fail to comply with the act. 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.
• Make similar changes to the Limited
Partnerships Act, so that those misusing New Zealand
companies cannot avoid the new regime by registering limited
partnerships instead.
• Better align the Companies Act
with the Takeovers Code to ensure shareholders understand
the effect that changes in company control will have on the
value of their shares.
• Introduce criminal
offences 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 bill can be found here
ENDS