New Rules for Companies & Limited Partnerships
June 13, 2017
The Companies Amendment Act (No 4) 2014 and the Limited Partnerships Amendment Act (No 2) 2014 passed into law on 24 June 2014.
Companies Act Changes
As of 1 May 2015, new registration requirements introduced by the Companies Amendment Act 2014 will affect new applications to incorporate a New Zealand limited liability company with the Companies Office. Existing companies on the companies register will have 180 days to comply with the following New Zealand ‘resident director’ requirements.
All New Zealand incorporated companies are required to have at least one director who lives in New Zealand or in an enforcement country and is a director of a company in that country.
- All directors must provide their place of birth and date of birth.
- All companies must supply their ultimate holding company details (if applicable).
The Registrar of Companies will have more power to identify the true owner of a company by enquiring about:
- individuals controlling companies and limited partnerships
- individuals controlling directors and general partners, and
- individuals that directors and general partners may have delegated their powers to.
The Act also enhances the powers of the Registrar of Companies to investigate non-compliance of companies by:
- creating criminal offences for serious breaches of directors duties where:
- a director acts in bad faith and not in the best interests of the company and knows that this will cause serious loss to the company
- a director dishonestly incurs debt for the company when the company is insolvent, or the director knew, the company would become insolvent, and
- aligning the company reconstruction provisions in the Companies Act with the Takeovers Code.
Limited Partnership changes
The Limited Partnerships Amendment Act 2014 (and Amendment Regulations) came into force on 1 September 2014. The changes introduced are to increase confidence in New Zealand’s financial markets and the regulation of corporate forms. More stringent registration requirements have also been introduced to assist with New Zealand?s compliance with the Financial Action Task Force on Money Laundering (FATF) recommendations.
Limited partnerships registered after 1 September 2014 will be subject to the changes. Existing limited partnerships (registered before 1 September 2014) have until 27 February 2015 to comply with the ‘resident general partner’ requirements. The principal changes include:
- new ‘resident general partner’ requirements
- new qualification requirements for individuals who are general partners
- collection of place of birth for all individuals who are general and limited partners
- a requirement to provide additional enforcement country information by Australian residents who are directors of Australian companies, and
- amendments to a number of forms.
The changes enhance the powers of the Registrar of Companies to:
- prohibit persons from being a general partner or promoter of a limited partnership in certain circumstances
- identify the controllers of a limited partnership
- place a note of warning against a limited partnership
- ascertain whether information provided is correct
- deregister a limited partnership in certain circumstances, eg non filing of annual return, when the Registrar has reasonable grounds to believe that the limited partnership has intentionally provided inaccurate information, and
- assist law enforcement agencies to meet New Zealand?s obligations as a member of FATF.
Source: www.business.govt.nz/companies
