Company directors, cartels in Parliament's sights

Company directors are one of the targets of a new business-focused bill to pass its first reading through Parliament.

The Companies and Limited Partnerships Amendment Bill and the Commerce (Cartels and Other Matters) Amendment Bill will now go before the commerce committee for consideration after passing last night.

Commerce Minister Craig Foss says that, through the companies bill, he wants every registered company to have a New Zealand agent who will be held responsible should the company fail to comply with record-keeping and reporting obligations.

The bill will mean the registrar of companies can take stronger action against those who consistently or seriously fail to comply with companies law.

Criminal offences will also be introduced for directors who commit a serious breach of their duties.

“New Zealand has one of the most red-tape free company registration systems in the world. However, we are aware that certain overseas-based companies take advantage of our system to run questionable operations,” Mr Foss says.

He believes the bill will strike a balance between deterring activities which pose a threat to the integrity of New Zealand’s company registration system and maintaining the reputation as one of the best places in the world to do business.

The second bill, aimed at cartels, encourages business to work together while also deterring "hard-core cartel".

“Collaborative arrangements can help businesses innovate and tap into overseas markets. This is especially important for an export-focused country like New Zealand,” Mr Foss says.

The bill will establish a new clearance regime, which allows businesses to test a potential collaboration with the commerce commission before entering into an arrangement.

“The clearance exemption will contribute towards a productive and efficient economy that will help create jobs and boost exports,” he says.

“Activities like price fixing and bid rigging will not be tolerated. Anyone who is intentionally engaging in cartel behaviour will be treated in the same way as tax evaders, fraudsters and other white collar criminals.”