When does a director “live in New Zealand”?

POSTED BY Luke Balmforth
20 September 2016

posted in Business | Caselaw | Company Law | Director residency

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Since 1 May 2015, the Companies Act 1993 has required that at least one director of each New Zealand company “live in New Zealand” or “live in an enforcement country and be a director of a company that is registered … in that enforcement country”. The aim is to ensure there is an individual who can be questioned about, and held to account for, a company’s activities. The Registrar of Companies, drawing on tax legislation, has interpreted “live in New Zealand” to mean living in New Zealand for at least 183 days a year.

This interpretation was recently challenged in the High Court. In Re John Malcolm Carr [2016] NZHC 1536, the Court found that a broader test is to be applied and that the 183 day threshold only provides “a criterion through which directors can automatically meet the statutory test”. If a director does not meet the threshold, the test can be satisfied by other means. While the Court did not set any definitive criteria for assessing whether a director “lives in New Zealand”, it noted that the following considerations will be relevant:

  • the amount of time the person spends in New Zealand;
  • their connection to New Zealand;
  • the ties they have to New Zealand; and
  • the manner of their living when in New Zealand.

When incorporating a company, bear in mind this New Zealand resident director requirement and how it is to be interpreted.

Image courtesy of Jocelyn Kinghorn.

POSTED BY Luke Balmforth
20 September 2016

posted in BusinessCaselawCompany LawDirector residency

VIEWED 3829 TIMES

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