Legal Update - Companies Act Reforms

The Minister for Commerce and Consumer Affairs recently announced "a raft of reforms" to the Companies Act 1993. The reforms are intended to "modernise and simplify" company law in New Zealand.

The Companies Act 1993 is an essential piece of legislation that impacts almost all those doing business in New Zealand. However, the Act has not been updated in over 30 years.

Company directors will be particularly pleased to hear the requirement to display their home addresses on the Companies Register is likely to be removed.

Some of the other changes on the horizon include:

- Removing the requirement that specific practices (like share buybacks) must be explicitly permitted in a company's constitution.

- Removal of requirements to mail certain information out to shareholders or physically publish information in the newspaper.

- Enhanced provisions relating to "phoenixing," to facilitate a fairer landscape for creditors.

- Introducing ‘unique identification numbers' for directors (like a personal NZBN) to foster transparency, so that directors' links to other companies are identifiable.

What's more - the Minister has signaled that there will be a second phase of reforms, which will include a review of directors' duties in the context #Mainzeal.

I am really pleased to see this announcement and I will be watching with eager eyes to see how Ministers Bayly and Goldsmith can modernise and simplify company law and administration in New Zealand.