Commerce and Consumer Affairs Minister Andrew Bayly. Photo: RNZ / Angus Dreaver
Companies can look forward to sweeping legal reforms aimed at reducing costs and and making it easier and safer to do business.
Commerce and Consumer Affairs Minister Andrew Bayly said: "To rebuild the economy and increase the value of our exports, we need to ensure our companies are not hamstrung by out-of-date laws and onerous red tape, while also making sure there are safeguards in place to deter bad actors and dodgy business practices.
"The changes announced today will help deter poor and illegal business practices and reduce the burden of compliance for businesses."
Bayly said the Companies Act had not been substantially updated in 30 years and did not reflect the modern business environment.
"The government's package of reforms includes changes to improve insolvency law and combat phoenixing so that when companies go bust, it's fairer for creditors and other changes that will make it harder for directors to dodge their debts and continue practising," he said.
The deceptive practice of phoenixing was used by some businesses to side-step obligations at the expense of creditors, employees and other stakeholders.
"Company directors will be assigned a unique identification number which will improve transparency and make it easier for creditors and law enforcement to trace individuals."
Company directors will also be able to remove their home address from the Companies Register, but other rules will remain in place.
"For example, there are still requirements for certain types of information to be physically published in the newspaper or mailed out to shareholders," Bayly said
"These reforms bring the law into the 21st century and enable companies to focus on growing their core business, rather than retrofitting their practices to appease out of date legislation."
A second phase of reforms would look at company directors' duties and related issues such as director liability, sanctions and enforcement.
