As of 1st May 2015 new rules applying to the governance, registration and reconstruction of companies in New Zealand will be introduced by the Companies Amendment Act (No 4) 2014. One of the aims of the Act is to assist with the prevention of the misuse of New Zealand companies. It strengthens the rules around the incorporation of New Zealand limited liability companies increasing corporate transparency and accountability.
From the 1st May 2015 all new New Zealand incorporated companies will need to have a director who:
• lives in New Zealand or
• lives in an “enforcement country” (An enforcement country is one that can enforce New Zealand judgements imposing regulatory regime criminal fines, which include those arising under the principal Act) and is a director of a company registered in that enforcement country.
o The Companies Act 1993 Amendment Regulations (no 2) 2014 has confirmed Australia as the only enforcement country.
For existing companies, incorporated prior to 1st May 2015, there is a further 180 days to comply with this requirement. Accordingly, such companies will need to comply on or before 27 October 2015.
In addition there are now additional information requirements imposed on all directors. From 1st May 2015 Directors, for all new New Zealand incorporated companies, will need to provide upon incorporation or upon their appointment their:
• Full Name
• Residential Address
• Place of Birth [not made publically available]
• Date of Birth [not made publically available]
For companies registered prior to 1st May 2015 this new information will need to be gathered and provided to the Registrar as part of the filing of the Company annual return.
For companies incorporated overseas but registered in New Zealand (operating as a branch) these resident director requirements do not apply.
How to be prepared
For existing Companies the grace period does provide some flexibility. All companies need to check their compliance with the new requirements. Consideration needs to begin now on what changes will be needed in the board structure well in advance of the expiry of the grace period.
The non-compliance with these new requirements will be grounds for the removal of the company from the Companies Register.
How can Covisory Partners Help?
If you have any concerns about the impact of these changes or would like to discuss any aspect of these new requirements please contact us.