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Companies in New Zealand have several annual obligations that they need to comply with every year. It can sometimes be challenging to understand what all your obligations are. There is often a lot of legalese and complex language, and the websites covering what you need to do are not always as straightforward as they could be. This article covers three key annual obligations a company must comply with each year and an overview of what is required. 

What Is an Annual Return?

Every year, a company needs to file its annual return. This is different from a tax return or a financial statement. Rather, it is a yearly update of publicly available information about a company on the Companies Register. If your company fails to file their annual return by the due date, the Registrar of Companies can remove your company from the register.

The Companies Office will tell your company the due date for your annual return when it becomes incorporated. However, your company does not need to file an annual return in the first year after incorporation. It is possible to request to change the date. You must file an annual return with the Companies Office. Once you register your company with the Companies Office, you will need to nominate a particular person who will have the authority to file the annual returns and update other key information. 

What Is an Annual Report?

Every year, some companies need to file an annual report. This report provides key information to shareholders about the company’s progress, including financial statements, remuneration information and shareholding changes. Not all companies need to do this, and most small-to-medium companies will be exempt. The companies that need to file this include:

  • large companies. Large companies are those whose assets exceeded $60 million (at the balance date of each of the two preceding accounting periods), or a company whose revenue exceeds $30 million (in each of the two preceding accounting periods);
  • every company that is a public entity; and
  • every company required to prepare financial statements under the Financial Markets Conduct Act 2013 or the Financial Reporting Act.

What Is an Annual General Meeting (AGM)?

An AGM is a yearly gathering of a company’s interested shareholders and board of directors. At an AGM, the directors will present their annual report and other key information for shareholders. Shareholders with voting rights will vote on current issues. 

Companies must hold an annual general meeting once each calendar year. The meeting must not be later than six months after the company’s balance date and no later than 15 months after the previous annual meeting. For example, if your balance date is 31 March, you need to hold your AGM by 30 September of that same year, unless any exemptions apply. 

A company does not need to hold an AGM if:

  • there is nothing that needs to be discussed; and
  • the board has decided it is in the interests of the company not to hold a meeting. The board needs to think about whether there are any particular issues that shareholders should be given an opportunity to discuss, comment on, or ask questions about; and
  • the company constitution does not require a meeting to be held. 

If you are holding an AGM, you need to publish a notice of that AGM. In general, there are some elements you have to include in your notice of the AGM. That includes:

  • the agenda;
  • any resolutions shareholders will be voting on; 
  • the proxy forms; and 
  • the annual report, if relevant. 

You will need to send all of these to shareholders, directors, and the company’s auditors. Also, you must give your notice in writing at least ten working days before the meeting. There can be exceptions, however, and you should always check your company constitution.  

Key Takeaways

There are a lot of specific requirements and annual obligations for companies. In particular, your company should be on top of planning, preparing for and executing an annual return, annual report and AGM. There are, however, other statutory obligations that your company must also look out for, for example, within the Companies Act. Importantly, you should always examine your company constitution, which may alter or change the statutory obligations or impose additional annual obligations on your company. If you would like more information about your company’s annual obligations, contact LegalVision’s corporate lawyers on 0800 005 570 or complete the form on this page.

Frequently Asked Questions

What happens if I breach any of my obligations?

The consequences of breaching a company obligation depend on what obligation your company breaches and how serious the breach is. For example, your company may hold an AGM that did not comply with the notice requirements set out in your company constitution. In this case, a court may declare that the meeting is invalid. Also, if you fail to file an annual return, your company could be removed from the Companies Register.

How important is my company constitution?

Your company constitution is very important. This document can specify specific additional requirements. For example, your constitution may outline particular notice requirements for holding a general meeting or provide special exemptions that otherwise would not apply. Make sure you read your company constitution carefully.

Are there other reporting requirements?

Yes, there are. In particular, different entities are bound by different laws and rules. The rules outlined in this article should apply to most companies, but there are some instances where other laws and rules will apply.

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