By Hope Imaka – EMTV Online
Ratified in September 2014, the new changes to the PNG Companies Act 1997 are now in effect for all business houses to take heed of.
The main changes as outlined by the Investment Promotion Authority (IPA) are:
- Increased protection of creditors
- Clearer guidelines on director’s duties
- Quicker and easier processing of shares
- Increased protection of Shareholders
- Streamlined process for filing company documents
- Clearer process of filing annual returns
What does this mean for creditors?
Simply put, this means that creditors are given the benefit of seeking a court order to access company files and records, and the ability to decide upon conducting an audit on the company.
Furthermore, in the event of a liquidation process, creditors are also better protected.
Directors who purposefully mismanage accounting records will be held liable, and creditors shall be repaid where applicable.
Guidelines on Director’s Duties
Shareholders are given further protection from directors who act improperly and not in the best interest of the company.
Protection and support for directors are also given in cases where legitimate business decisions fall through.
Processing of Shares
Companies can now buy and sell their own shares a lot easier with procedures in place to protect shareholders.
Companies are also able to buy back their shares and re-sell them when their market value is higher.
Protection of Shareholders
Prior to the amendment, shareholders were required to send in a proxy to vote on their behalf in the case of the shareholder being unable to attend the meeting, and trust that (s)he votes accordingly to the shareholder’s wishes.
Now with the amendments made, it is now easier for shareholder to vote on company resolutions through the use of email.
Furthermore, shareholders will be more eligible to receive discounts on company goods and services in Papua New Guinea.
Prior to this amendment, Papua New Guinea regulations limited the companies that were allowed to offer discounts to their shareholders.
If an auditor of a company resigns, he is obligated to inform all shareholders.
Streamlined process of filing Annual Returns
Documents can now be filed online without a physical signature, assisting businesses with no access to scanners or fast Internet connections.
This move is in anticipation of the development of a complete online business registration system, which will be launched at the end of the year.
Clearer process of filing of Annual Returns
As per the amendments made, the filing date will be linked to the company’s first annual meeting.
This is to bring Papua New Guinea in line with the procedures of other countries around the world.
Companies whom are required to be audited under Section 190 of the Companies Act 1997 are required to attach audited financial statements to their Annual Return.
Under the Amendment Act 2014, Annual Returns are now required to be lodged during the month the company was first incorporated, or in the case of an overseas branch, the date of registration in PNG.
Although technically not in accordance with the Amendment Act, the Registrar may consider accepting 31 December 2014 audited accounts when lodging the Company’s Annual Returns in January 2016, as in the case above.
Furthermore, the ROC have advised that they will continue to accept 2014 and prior year’s Annual Returns in the current manner until 04 January 2016. We were also advised that new fees for Annual Return lodgements and penalties might also take effect from the 4th of January 2016.
In that respect, companies whose Annual Returns for 2014, which were due for lodgement by 30 June 2015, may still be lodged with 31 December 2014 Financial Statements for as long as these are lodged with the ROC before the changes are enforced from 4 January next year.
Companies are also given the option of submitting an application to the Registrar to change the filing date of their Annual Returns to align with the company’s existing balance date.
Any further enquiries?
Companies, businesses, partners and stakeholders who have any further enquiries should contact:
The Registrar of Companies
Registrar of Companies Office
P.O. Box 1281
Port Moresby, NCD
PAPUA NEW GUINEA
Tel: +675 3213900
Fax: +675 3213049