Potential double liability for directors of insolvent companies
A director of an insolvent company may potentially have concurrent liability under the Companies Act 1993 and the Fair Trading Act 1986.
The Ministry of Business, Innovation and Employment (MBIE) consulted on the introduction of Director Identification Numbers (DINs) in 2017 and 2018 noting the following benefits:
MBIE’s June 2018 discussion paper considered whether it was appropriate to do away with publishing director’s residential addresses on the companies register if a director identification number (DIN) system was introduced.
The IoD supported DINs and also removing directors’ residential addresses from the register and substituting them with a service address. The IoD highlighted concerns about directors’ residential addresses being publically available.
However, progress has been slow and these matters have been combined with another initiative aimed at increasing the transparency of beneficial owners of companies and limited partnerships (eg via a public register) as a measure to combat money laundering and terrorist financing. MBIE is now working on how this will all operate in practice and stakeholder consultation is expected.
Meanwhile, a proposed members Companies (Non-publication of Directors’ Residential Addresses) Amendment Bill has been written by ACT deputy leader Brooke van Velden. (Proposed members' bills require the support of 61 or more members of Parliament who are not part of the Executive to be introduced – otherwise they await being drawn from a members' bill ballot. Currently the bill is supported by ACT’s 10 MP’s).
The intention of the bill is to give directors of companies the choice if they want to make their residential address publicly available on the companies register. It would:
The Bill provides in the explanatory note that:
We will continue to provide updates on this matter and progress of the bill.
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