Commerce Minister Simon Power has announced the tightening of company registration rules to stop foreign criminals from setting up and operating businesses in or from New Zealand.
The new rules will also flag publicly on the Companies Office website when a company is being investigated. The Registrar of Companies will also have greater powers to strike off companies where directors have previously breached rules or given misleading information, Power said in a statement.
Here are the details below:
The main change will require all New Zealand companies to have either one New Zealand-resident director or a local agent. Mr Power says the measures are designed to shore up New Zealand’s company registration process against criminal activity from overseas.
"Our company registration processes are highly-respected but there have been increasing threats to our international reputation posed by overseas interests which use New Zealand-registered companies to undertake criminal activity. “These changes will help ensure New Zealand retains its position as one of the best places in the world to do business”.
New Zealand-resident directors or agents will be responsible for ensuring companies provide accurate information to the Registrar of Companies and will be liable if companies breach their filing requirements under the Companies Act. The Registrar of Companies will also get expanded powers.
There will be a greater ability to remedy issues concerning the bona fides of directors and shareholders of companies, and to deal with compliance issues around company registration.
There will also be greater powers to take action where doubt exists about the accuracy of information about a company on the register.
"In particular, the Registrar will be able to 'flag' companies which are under investigation," Mr Power says. "This will provide greater protection for legitimate businesses, which will be able to check the Companies Office website to see if there are concerns about the bona fides of the companies they are doing business with."
"If the investigation shows that a company and its directors or agent have given inaccurate or misleading information, or have committed other breaches of companies legislation, the Registrar will be able to remove that company from the register.
"The Registrar will be able to also prohibit any person from acting as a director for up to five years where they were a director of such a company."
Similar provisions will be put in place for limited partnerships. The measures will require amendments to the Companies Act and related legislation. A bill setting out these measures is expected to be introduced to Parliament next year.
Your view on these changes? Is it necessary? What experiences have you had in this area? We welcome your comments below.