Reminder about changes for companies

Reminder about changes for companies

Introduction

The Companies Office has updated its website to provide a reminder about the important changes affecting companies that are starting to make their presence felt.

These changes comprise:

• the ‘resident director’ (and ultimate holding company) details applicable to all companies incorporated from 1 May 2015; and

• the changes to the financial reporting landscape from the 2015 financial year.

Companies Act changes

The ‘resident director’ provisions, under the changes to the Companies Act made by the Companies Amendment Act 2014, will initially apply to all new companies registered from 1 May 2015 – and will require:

• details of the dates and places of birth for all directors (which will not be publicly available);
• the company have at least one director who lives in New Zealand (or lives in Australia and is a director of a company incorporated in Australia); and
• in the case of any director living in Australia – whether they are a director of a company incorporated in Australia (and provide certain details about that Australian company.

(Note also that, when a new director is appointed to any existing company, details of the date and place of birth will also need to be provided – in respect of that new director).

In addition, if relevant, details of any company that is the ultimate holding company must also be provided.

From 1 July 2015, all companies incorporated prior to 1 May 2015, will when filing the annual return – be required to provide details of:

• the date and place of birth of all directors (these will not be publicly available); and
• any ultimate holding company.

From 28 October 2015, all companies (regardless of when formed) will be required to have at least one director that either lives in New Zealand; or lives in Australia and is a director of a company incorporated in Australia. (This information will also be required on all annual returns field after 28 October 2015).

Similar additional disclosure obligations relating to a General Partner’s place of birth will also apply. And where a General Partner is a company, the additional requirements for companies (as noted above) will apply.

Financial reporting changes

The Companies office website also provides a summary of the changes to the financial reporting regime affecting companies from the 2015 financial year. These changes include:
• Companies (other than FMC reporting entities) will only be required to lodge financial statements with the Registrar if they are ‘large’.
• A ‘large’ company an entity (other than an overseas company or a subsidiary of an overseas company) in respect of an accounting period if at least 1 of the following applies:
o as at the balance date of each of the 2 preceding accounting periods, the total assets of the entity and its subsidiaries (if any) exceed $60m;
o in each of the 2 preceding accounting periods, the total revenue of the entity and its subsidiaries (if any) exceeds $30m.
• (the thresholds are reduced to $20m and $10m in the case of an overseas company or a subsidiary of an overseas company).

A company will not be considered ‘large’ if it has been an “inactive entity” in a particular accounting period.

A number of other important changes have also been made, including:

• the timeframe for preparation and registration of financial statements has been reduced to 4 months for FMC reporting entities, and 5 months for ‘large’ companies;
• all financial statements filed with the Registrar are required to include a statement of cash flows;
• requests to change reporting entities balance date must be supported by an approval letter from the Commissioner of Inland Revenue;
• compliance with generally accepted accounting practice is a pre requisite for registration of financial statements under the Companies Act 1993 (section 201).
• if a ‘large’ company has subsidiaries, only the group financial statements are required to be filed; and
• if the New Zealand branch of an overseas company is not ‘large’ it will not have to file separate financial statements – instead only the overseas (parent) company financial statements will need to be filed.

Further information

If you would like more information about any of the matters discussed in this note, please contact me.