January 27 2014
An important part of the government’s companies and limited partnership reforms package is undergoing its final legislative steps. If you’re involved with affected companies and limited partnerships you’ll need to take note.
Under the Companies and Limited Partnerships Amendment Bill, every company incorporated in New Zealand will be required to have:
- A director who lives in New Zealand, or
- A director who is also a director of a company incorporated in, and who also lives in, a country with which New Zealand has reciprocal enforcement arrangements for low-level fines. The list of approved countries remains to be finalised, but it’s expected to initially include only Australia.
Equivalent requirements will be imposed for limited partnerships.
The purpose of this requirement is to ensure that there’s an identifiable individual with a substantive connection with the business who can be questioned about its activities and who can, in certain circumstances, be held to account.
Existing businesses will have a mere six months to comply with the new requirements once they come into law, which could be very shortly. Non-compliance at the end of the six month transition period will be grounds for de-registration of the company or limited partnership.