Tirikatene Rino; Ross Jami-Lee; Borrows ChesterRINO TIRIKATENE (Labour—Te Tai Tonga): I am pleased to take a call in the Committee stage of the Regulatory Systems (Commercial Matters) Amendment Bill. We are on Part 1?Hon Ruth Dyson: We are.RINO TIRIKATENE: We are on Part 1—great. I can understand the intent behind the enactment of a lot of amendments to a whole lot of commercial legislation. Certainly there is a voluminous amount of legislation that applies to companies—commercial entities transacting business.But what I want to focus on is that I understand the purpose of the bill is to reduce the chance of regulatory failure and unintended consequences that harm the well-being of New Zealanders. Just from looking at the provisions in Part 1 particularly under the Companies Act I would have thought that a lot of the provisions in the Companies Act—a company has a constitution whereby basically it can make its own rules to get around some of the positive obligations that are imposed under the Companies Act. There is an option there that a company's constitution can modify them and shareholders within their own business who run their own business can make their own rules. It suits them. I would have thought that the Companies Act—I know it has been going for well over 20 years now nearly 25 years; I think it came into effect in 1993. Companies have obviously been used to putting in place constitutions making their own arrangements and working around the statutory provisions. This is basic stuff. Any basic constitutional lawyer will print off a standard constitution.So just from looking at some of these provisions it seems that there are positive obligations that used to be imposed on companies that are now being taken away. I am just thinking: where is the balance? For 25 years I guess or close to 25 years companies have been operating—no problem—with many of these provisions. Now all in the name of expediency certain of these provisions have been taken away watered down within Part 1 with various reporting obligations or the holding of meetings and the like.But we must always keep the interests of the shareholders in mind. Many shareholders in companies can be overlooked particularly small shareholders when you are looking at major companies or companies that are closely held but there are some minority interests. Just looking at the provisions I think we need to be very careful that in the haste to make everything quicker more efficient we do not overlook some fundamental rights that shareholders have within a company. I wanted to make that point. I hope that the Minister has given this a thorough check—that OK if we are going to do away with certain obligations or duties that have been imposed on directors or companies it is not at the expense of shareholders and their interests particularly the minority shareholders and that there can be a pressure imposed by major shareholders or by other interests at the expense of the minor shareholders. So I just wanted to draw attention to that.The other matter that I wanted to raise when I was just having a cursory glance at the obligations around removing an overseas company is this: as I understand it an overseas company is exactly that—an overseas company that operates in New Zealand conducts business in New Zealand but not as a New Zealand - based subsidiary. They just register themselves as an overseas business or an overseas company so it is a lot simpler for them to just set up shop and conduct business in New Zealand. With regard to an overseas company I am just looking through the provisions of the section about the registrar being satisfied that an overseas business is no longer operating in New Zealand. I would ask the Minister in the chair the Hon Amy Adams whether she could elaborate a bit further as to what would give the registrar sufficient grounds I guess to remove that overseas company from the register. Is it the fact that they do not reply to any mail? Is it the fact that they do not have a telephone or up-to-date address? Given the fact that a lot of entities in New Zealand just operate under the radar I guess what grounds would the registrar require to indeed go ahead and remove that company from the register?The other point that I wanted to make in relation to overseas companies is the removal of the requirement for the registrar to provide public notice that the registrar intends to remove that company from the register. I would imagine that even if the registrar has formed that opinion that This business ceases to exist as far as I am aware; therefore I am just going to go ahead and remove it. I am so satisfied that I do not need to give notice." I still think there needs to be some safeguards in place and there needs to be some public notice in place because for all we know that business could still be operating. It may not be a bona fide business but it could be operating in New Zealand. Therefore the public of New Zealand may still be doing business with that overseas company and the registrar may not know about it. That is why I guess there has been a longstanding provision that there is a requirement to give public notice. All that would require is just a notice in the newspaper or however they do it these days just to say "I intend to remove XYZ Overseas Company Ltd from the register on such and such a date." I would imagine. I would say that that safeguard needs to be put in place purely to protect the public—to protect mums and dads or whoever may be transacting business. This business may be absolutely insolvent. They may be crooks. They may not actually be conducting legal business in New Zealand but they could be duping a lot of the public of New Zealand. Those are the two points I would like to make to the Minister. How robust are the systems and the procedures that the registrar has to go through to convince himself or herself that this overseas company is no longer operating in New Zealand? And secondly why remove the requirement for public notice because an overseas company may still be transacting business and therefore it may just require an extra little procedural matter for the registrar to work through to provide that public notice because you never know there may be members of the public out there who are indeed doing business with that company?That all comes back to the fundamental purpose of this bill. The fundamental purpose of the bill is to reduce unintended consequences that harm the well-being of New Zealanders. Those are two examples whereby we must consider the well-being of New Zealanders. We must consider the well-being of not just the big boys not just the big companies in town not just the big overseas guys who can afford the big flash accountants and lawyers but also the little guy—the little shareholder the little person who holds a smaller interest. They need to be looked after as well. I just wanted to raise those particular matters because I think they are pertinent to the intent of the bill and we want to make sure that we get the balance right. I just wanted to raise those points for the Minister's consideration.JAMI-LEE ROSS (Junior Whip—National): I move That the question be now put.The CHAIRPERSON (Hon Chester Borrows): Mr Coates has been seeking a call for some time. I call Barry Coates."