The New Zealand Government proposes to introduce new legislation later this year to increase transparency in beneficial ownership and the identity of corporate role holders.

The proposed new legislation intends to make it harder for companies and limited partnerships to be misused for illegal purposes (such as money laundering and tax evasion).

The two key proposed changes are described below.

Beneficial ownership information

Broadly, beneficial owners are the individual(s) who ultimately own or control an entity.

There is no current requirement for companies or limited partnerships to state and provide information on their beneficial owners. This means it is difficult to know the identity of the actual individuals involved in an entity, especially if complex ownership structures are involved.

The Cabinet paper released by the Ministry of Business, Innovation and Employment anticipates requiring companies and limited partnerships to take reasonable steps to ascertain who their beneficial owners are and information about their beneficial owners (full legal name, email address, residential address or address for service) and then provide such information to the Companies Registrar.

A transition period to allow existing companies and limited partnerships to notify the Companies Registrar of their beneficial owners’ identification details is proposed. Companies that are ‘large’ under the Financial Reporting Act 2013 and/or have one or more offshore directors/beneficial owners may have a shorter transition period (e.g. six months instead of 12 months).

Unique identifier numbers for corporate role holders

The second key proposed change involves assigning all directors, beneficial owners and general partners a unique identifier number. Allocating a unique identifier number to each person enables the Companies Office to link individuals with all the entities they are associated with. As this number will be publicly available on the Companies Office website, it will also be easier for Companies Office users to know which entities a specific individual is involved with.

An advantage of the unique identifier number is that directors’ residential addresses will no longer be required to be displayed on the Companies Office website. Instead, directors can opt to provide an address for service. If information, such as residential addresses, has previously been disclosed to the Companies Registrar (for example, in a past director consent form), a fee may be required to cover the administrative costs of removing this information.

It is important to note that while directors’ residential addresses will not be publicly available, insolvency practitioners and creditors will have the right to request the residential address of specific corporate role holders where they are unable to reach that person at their service address.

Next steps

It is anticipated that a draft Bill of these provisions will be published in mid-2022 with the finalised Bill being introduced to Parliament in late 2022.