Companies Amendment Act 2014 – changes to director requirements
Early in July the Companies Amendment Act 2014 was passed. The Act makes significant changes to the Companies Act 1993 by strengthening governance, registration and reconstruction of companies.
The changes ushered in will affect the specific requirements considered when selecting the directors of a company. New Zealand incorporated companies will from 2 July 2015 or on the date set by Order in Council be required to have at least one director who:
- lives in New Zealand; or
- is a director of a company registered within an enforcement country in which they live.
Enforcement countries will be those which have an agreement with New Zealand that allows for judgments made by the courts of New Zealand imposing regulatory regime criminal fines to be recognised and enforced.
It should be noted that Australia will be the first prescribed enforcement country to ensure that Australian owned New Zealand companies are not severely impacted. The majority of overseas owned companies without a New Zealand director are Australian. These Australian owned New Zealand companies will need to have a director who not only lives in Australia but is also a director of an Australian registered company.
Association of South East Asian Nations – Australia – New Zealand Free Trade Area protocol signed
Late in August the Minister of Trade signed on behalf of New Zealand a Protocol amending the Agreement Establishing the Association of South East Asian Nations-Australia-New Zealand Free Trade Area (AANZFTA). The changes are aimed at the promotion of a business friendly environment, where transparency and administrative efficiency are key elements between the countries party to the agreement.
The Protocol introduces procedural guidelines to aid administrative efficiency, remove unnecessary information requirements and streamline the presentation of product specific rules of origin are specific objectives. The intent is to drive the Agreements functions towards a form well-designed for business use.
The Protocol will undergo New Zealand’s treaty examination process with the aim of all party countries to complete negotiations of implementation requirements early in 2015. Entry into force is likely to occur shortly after.
Changes to Limited Partnerships Act 2008 from 1 September 2014
The Limited Partnerships Amendment Act 2014 (and Amendment Regulations) came into force on 1 September 2014 in a bid to protect New Zealand’s reputation as a trusted place to do business. The changes seek to, prevent the misuse of New Zealand based limited partnerships by overseas entities, enhance the powers of the Registrar of Companies to verify information and enable stronger action to be taken where required.
The significant changes to limited partnerships include
- the requirement that at least one general partner is a New Zealand resident;
- new qualification requirements for individuals who are general partners;
- the collection of place of birth information for individuals who are general and limited partners; and
- requiring Australian residents who are directors of companies to provide additional enforcement country information.
All limited partnerships registered after 1 September 2014 will have to comply with the changes. A stand down period applies to existing limited partnerships until 27 February 2015, allowing compliance with the “resident general partner” requirement to be achieved.
If you have any questions on the matters discussed in this update please contact the New Zealand Mackrell Partner, Brian Joyce at Clendons North Shore by email to firstname.lastname@example.org or phone +64 9 377 8419.
This publication is necessarily brief and general in nature. You should seek further information before taking any action in relation to the matters dealt with in this publication.