Business - Parry Field Lawyers

雇主认证工作签证（“AEWV”）将于2022年7月4日推出，以减少剥削，鼓励雇主在雇用移民之前培训、雇用和提高技新西兰本地人的技能。

它将取代六类临时工作签证：

基本技能工作签证——将于2022年7月3日关闭；
基本技能工作签证——原则上批准——将于2022年7月3日关闭；
人才（认证雇主）工作签证——已于2021 10月31日关闭；
长期技能短缺清单工作签证——已于2021 10月31日关闭；
Silver Fern求职签证——已于2021 10月7日关闭；和
Silver Fern实践经验签证——已于2021 10月31日关闭。

在使用经认可的雇主工作签证雇用移民之前，雇主必须：

1、在新体系下申请认证——即“雇主审查”；

2、申请工作检查，以确保他们想要填补的职位不能由新西兰人担任——即“工作审查”；和

3、要求移民工人申请签证——即“员工审查”。

雇主审查

任何在当前体系下的认证雇主（即与人才（雇主认证）工作和居留签证相关的雇主）如果想在新的AEWV体系下雇用移民，必须申请并满足新认证体系的政策要求。

认证有三种类型：

1、标准型 – 在任何时段能雇佣不多于5名AEWV上的移民员工；

2、批量型 – 在任何时段能雇佣6名或6名以上的AEWV移民员工；和

3、其他 – 与特许经营人和劳务公司相关。

雇主现在就可以申请认证。

雇主审查 – 标准型认证

所有希望在AEWV上雇用移民的雇主必须满足标准型认证的如下要求：

1、必须是真正在经营的生意，即：

必须在IRD上注册为雇主；和
如果是以合伙形式或个体户在经营，则企业所有人不得破产或处于无资产程序中；
并且：
在过去24个月内未发生亏损（折旧和税前）；或
过去6个月内的每个月都有正现金流；或
有足够的资本和/或外部投资（例如创始人、母公司或信托公司的资金），以确保该雇主的业务保持可行和持续性；或
有一个可靠的、不少于两年的计划（例如有已签订的业务合约）的，以确保该雇主的业务保持可行和持续性。

“可行且持续”包括能够：

履行财务义务，如支付工资或薪金以及所有其他运营成本和费用；和
购买库存（如相关）。

2、不得有违规的记录，例如：

不能在劳动监察局的雇主黑名单中；
必须遵守移民法，且不能受到因移民相关罪行被定罪而产生的永久禁令的限制；
不能被禁止担任公司负责人；和
不能是破产后重组的公司。

3、必须采取措施以尽量减少对员工的剥削，例如：

为移民员工提供完成就业学习模块的时间；
做出招聘决策的每个人都必须完成就业学习模块；
支付新西兰境内外的所有相关的招聘费用，包括广告费、中介代理费、雇主和工作审查申请费、培训和入职培训、健康和设备安全以及制服，但不包括机票；
向移民员工提供与工作相关的信息（即如何申请IRD号码）和社区援助（例如：如何开立银行账户、寻找出租房）；和
雇主不得向移民员工收取就业附加费，不得非法担保员工，也不得进行任何非法扣费。

新西兰移民局处理标准型认证申请的费用是$740.00。

雇主审查 – 批量型的认证

想要在AEWV上雇佣6名或更多移民员工的雇主必须满足标准型认证的要求。之后，可能会有一项要求，即表明他们致力于培训和提高新西兰人的技能。

新西兰移民局处理大批量型的认证申请费是$1220.00。

如果您有标准型认证，但以后想要在AEWV上雇用6名或更多移民员工，您可以升级到批量型的认证，需要支付给移民局的费用是$480.00。

雇主审查 – 其他认证

对于特许经营人：

必须满足标准型认证要求；
必须已经营至少12个月；和
必须有雇用新西兰人的历史。

新西兰移民局处理特许经营人申请的费用为$1980.00。

对于劳动力雇佣公司：

必须满足标准型认证要求；
必须将移民员工放置在具有AEWV的“合规公司”上。“合规公司”是指：
是新西兰的注册公司；
不在雇主黑名单上；和
已声明他们没有移民法相关的争议；
必须有良好的系统来监控就业和安全条件；
必须有12个月的劳动合同历史；和
公司第三方劳动力必须有至少15%是全职的新西兰人（即每周至少30小时）。

新西兰移民局处理劳工雇佣公司申请的费用是$3870.00。

对于大多数雇主来说，申请认证将是一个简单且相对较低接触度的评估。然而，新西兰移民局可能要求提供额外信息以评估申请，并可能在认证有效期间进行监控。如果新西兰移民局对雇主继续满足认证要求感到不满意，则可能撤销该雇主认证。

因此，我们建议您联系您的律师，以确保您符合要求并且遵守移民法和雇佣法的相关要求。

认证期限

在新西兰移民局批准认证申请后，雇主将获得为期12个月的认证。

延期时，将移民员工放置在第三方公司AEWV上的特许经营人和雇主将获得为期12个月的认证，所有其他雇主将获得为期24个月的认证。

工作审查

从2022年6月20日起雇主可以开始申请工作审查。

劳动力市场测试是指真诚地尝试招募新西兰公民或居民。

除非拟定工作的薪酬为每小时$55.52或以上，或同等年薪，或该职位在绿色名单上，否则所有工作都必须通过劳动力市场测试。

劳动力市场测试的有效期为六个月，自批准之日起，或直至雇主不再持有认证，以较早者为准。

员工审查

移民员工必须满足：

品行要求，例如：从未被判处5年或5年以上有期徒刑；
健康要求，例如：不太可能对新西兰的卫生服务或特殊教育服务造成重大支出或需求；和
证书和工作经验要求。

薪酬

拟议的工作合同的薪酬必须等于或高于工资中位数，即每小时$27.76，且不能低于该职业在新西兰的市场工资率。

如果工作需要有其他没有在ANZSCO职业中描述的技能来完成，则雇主提供的薪酬必须高于该工作的市场工资率。

但是，建筑和基础设施、旅游和酒店业以及护理劳动力部门的特定工作不受工资中位数的限制。

AEWV的货币

AEWV签证可在提供就业的期限内授予，最多可以是：

3年，如果时薪达到中位数；或
2年，如果工资低于工资中位数，除非这2年的签证会导致签证持有人超过停工条件下允许的最长期限（即2年）。

如果工资低于工资中位数的2年工作签证会导致签证持有人超过停工设置允许的最长期限（即2年），则该签证只能在最长期限的剩余时间内发放。

审批时间

预计的审批时间范围是：

标准型和批量型认证 – 10个工作日
工作审查 – 10个工作日
员工审查/AEWV – 20个工作日

请注意，以上并不能替代法律建议，您应该联系您的律师了解您的具体情况。

如果您想开始认证申请流程和工作审查流程，请电话联系我们， 03 348 8480，或通过电子邮件发送至我们的邮箱immigration@parryfield.com

2022年6月8十

The Accredited Employer Work Visa (“AEWV”) will be introduced on 4 July 2022 to reduce exploitation and encourage employers to train, upskill and hire New Zealand workers before hiring migrants.

It will replace six temporary work visa categories:

Essential Skills Work Visa – will close on 3 July 2022;
Essential Skills Work Visa – Approval in Principle – will close on 3 July 2022;
Talent (Accredited Employer) Work Visa – closed on 31 October 2021;
Long Term Skills Shortage List Work Visa – closed on 31 October 2021;
Silver Fern Job Search Visa – closed on 7 October 2021; and
Silver Fern Practical Experience Visa – closed on 31 October 2021.

Before hiring a migrant on the Accredited Employer Work Visa, an employer will have to:

apply for accreditation under the new system – “the Employer Check”;
apply for a job check to make sure the role they want to fill cannot be done by New Zealanders – “the Job Check”; and
request a migrant worker to apply for a visa – “the Worker Check”.

The Employer Check

Any employers accredited under the current system (i.e. in relation to the Talent (Accredited Employer) Work and Resident Visas) will have to apply and meet the policy requirements of the new accreditation system, if they want to hire migrants on the new AEWV.

There are 3 types of accreditation:

Standard – to hire 5 migrant workers on AEWVs at any one time;
High-volume – to hire 6 or more migrant workers on AEWVs at any one time; and
Other – in relation to Franchisees and Labour Hire Companies.

An employer is able to apply for accreditation now.

The Employer Check – Standard Accreditation

ALL employers who want to hire migrants on AEWVs have to meet the standard accreditation requirements, which are as follows:

Must be a genuinely operating business, i.e.:

Must be registered as an employer with IRD; and
If the employer is a partnership or sole trader, the business owner(s) must not be bankrupt or subject to a No Asset Procedure;
AND
- have not made a loss (before depreciation and tax) over the last 24 months; OR
- have a positive cash flow for each of the last 6 months; OR
- have sufficient capital and/or external investment (for example funding from a founder, parent company or trust) to ensure the employer’s business remains viable and ongoing; OR
- have a credible, minimum two-year plan (for example by having contracts for work) to ensure the employer’s business remains viable and ongoing.

“Viable and ongoing” includes being able to:

meet financial obligations such as paying wages or salaries and all other operating costs and expenses; and
purchase inventory (if relevant).

Must not have a non-compliance record, i.e.:

Not be included in the Labour Inspectorate stand down list;
Must be compliant with immigration law and not be subject to a permanent ban following a conviction for an immigration related offence(s);
Not be prohibited from being a director; and
Must not be a phoenix company.

Must take steps to minimise worker exploitation, i.e.:

Provide migrant workers with time to complete Employment Learning Modules;
Everyone who makes recruitment decisions must complete Employment Learning Modules;
Pay all recruitment costs inside and outside New Zealand, including advertising, agency fees, employer and job check applications, training and induction, health and safety equipment, and uniforms, BUT excluding airfares;
Provide migrant workers with work-related information (i.e. how to get an IRD number) and community assistance (i.e. how to open a bank account, find rental accommodation); and
Employer cannot receive a premium for employment, unlawfully bond the employee, nor make any unlawful deductions.

Immigration New Zealand’s fee to process a standard accreditation application is $740.

The Employer Check – High-Volume Accreditation

Employers who want to hire 6 or more migrants on AEWVs have to meet the standard accreditation requirements. Later, there may be a requirement to show that they have a commitment to train and upskill New Zealanders.

Immigration New Zealand’s fee to process a high-volume accreditation application is $1220.

If you have standard accreditation, however later want to hire 5 or more migrants on AEWVs, you can upgrade to high volume accreditation for a fee. That fee is $480.

The Employer Check – Other Accreditation

Franchisees:

Must meet the standard accreditation requirements;
Must have been operating for at least 12 months; and
Must have a history of hiring New Zealanders.

Immigration New Zealand’s fee to process a franchisee application is $1980.

Labour hire companies:

Must meet the standard accreditation requirements;
Must place migrants on AEWVs with “compliant businesses”. A “compliant business” is a business:
- that has an NZBN;
- that is not on the stand-down list; and
- has declared that they do not have immigration-related issues;
Must have good systems to monitor employment and safety conditions;
Must have a 12 month labour contracting history; and
Must have at least 15% of the company’s labour workforce placed with third parties be New Zealanders in full-time employment (i.e. at least 30 hours a week).

Immigration New Zealand’s fee to process a labour hire company application is $3870.

For most employers, accreditation will be a simple and relatively low-touch assessment. However, Immigration New Zealand may request additional information to assess an application and may undertake monitoring during the accreditation period. If Immigration New Zealand is not satisfied an employer has continued to meet the requirements, the employer’s accreditation status may be revoked.

Therefore, we advise that you contact your lawyer to ensure you will meet the requirements and are compliant with immigration law and employment law.

Accreditation Period

When an accreditation application is approved by Immigration New Zealand, an employer will receive accreditation for 12 months.

At renewal, franchisees and employers that want to place migrants on AEWVs with third parties will be granted accreditation for a further 12 months, and all other employers will be granted accreditation for 24 months.

The Job Check

An employer can apply for a job check from 20 June 2022.

A labour market test is a genuine attempt to recruit New Zealand citizen or resident.

The labour market test must be met for all jobs, except where the remuneration for the proposed employment is $55.52 per hour or above, or the equivalent annual salary, or where the role is on the Green List.

A labour market test will be valid for six months from the date that it is approved or until the employer no longer holds accreditation, whichever is earlier.

The Worker Check

The worker must meet:

Character requirements, for example, not have been sentenced to a prison term of 5 years or more;
Health requirements, for example, be unlikely to impose significant costs or demands on New Zealand’s health services or special education services; and
Credential and experience requirements.

Remuneration

The remuneration for the proposed employment must be at or above the median wage, which will be $27.76 per hour, and must not be less than the New Zealand market rate of pay for that occupation.

Where other skills or specifications are needed to perform the job that are not described in the ANZSCO occupation, the remuneration offered must reflect those requirements by being above what would otherwise be the market rate for that job.

However, specific jobs in construction and infrastructure, tourism and hospitality, and care workforce sector are exempt from the median wage threshold

Currency of AEWVs

An AEWV may be granted for the period for which the employment is offered, up to a maximum of:

3 years for employment paid at or above the median wage; or
2 years for employment paid below the median wage, unless a 2 year visa would result in the holder exceeding the maximum period allowed under the stand-down settings (which is 2 years).

Where the grant of a 2 year visa for employment paid below the median wage would result in the holder exceeding the maximum period allowed under the stand-down settings (which is 2 years), the visa may only be granted for the remainder of the maximum period.

Processing Timeframes

The estimated application processing timeframes are:

standard and high-volume accreditation – 10 working days
job check – 10 working days
migrant check/AEWV – 20 working days

Please note that this is not a substitute for legal advice and you should contact your lawyer about your specific situation.

If you would like to start the application process for accreditation and job check process, please feel free to contact us on 03 348 8480 or by email to immigration@parryfield.com.

10 June 2022

Introduction

The Incorporated Societies Act 2022 (the “new Act”) recently received Royal Assent, resulting in significant changes for the 24,000 incorporated societies in New Zealand. The new Act replaces the Incorporated Societies Act 1908 (the “old Act”), which has been long overdue for an upgrade. We have discussed ten key changes for incorporated societies to be aware of in our article here and provided a lot of detailed information in the form of articles and seminars here. Contact us for a copy of our comprehensive handbook.

All incorporated societies will be required to reregister under the new Act, so it is a chance to revisit all aspects of these organisations. Section 26 of the new Act sets out what a society’s constitution must contain. This is important as the society’s constitution must comply with the new Act in order to reregister. We have detailed notes on the reregistration process here and are helping many comply with the requirements.

In a series of six articles we have set out the key requirements for your society’s updated constitution, as prescribed by section 26 of the new Act. This article will discuss what your constitution needs to provide in relation to general meetings.

General meetings

The new Act expands on the old Act in setting out several requirements for general meetings, which must be included in the society’s constitution. The requirements for general meetings are in sections 84 to 93 of the new Act. We have canvassed below the key elements of the new Act to be included in a society’s constitution.

Timing of annual general meetings

The intervals between annual general meetings (“AGMs”) must be set out in the society’s constitution. Under section 84 of the new Act, a society must call an AGM no later than 6 months after the society’s balance date and no later than 15 months after the previous AGM. There is an exception to this rule for a society which is newly incorporated – a society does not have to hold its first annual general meeting in the calendar year of its incorporation but must hold that meeting within 18 months after its incorporation. Logically this would only apply to a newly incorporated society, not a society who is reregistering under the new Act.

Procedure at annual general meetings

Unlike the old Act, the new Act is prescriptive and requires the constitution to provide for the information that must be presented at general meetings. As set out in section 86 of the new Act, the required information is:

an annual report on the operations and affairs of the society during the most recently completed accounting period;
the society’s financial statements for that period; and
notice of the disclosures and types of disclosures made under the duty of officers to disclose when they are interested in a matter under section 63 during that period, including a brief summary of the matters or types of matters disclosed. We have more information on the conflict of interest disclosure procedure here.

Under section 84 of the new Act, minutes are required to be kept for AGMs. This requirement must be included in the society’s constitution.

Passing of resolutions

Under the new Act, a society’s constitution should include whether, and if so, how resolutions may be passed in lieu of a general meeting. If the constitution allows for a resolution to be passed in lieu of a meeting, then sections 89 to 92 of the new Act will apply.

How meetings are called

Similar to the old Act, the new Act requires the society’s constitution to provide for the manner of calling general meetings. The new Act also requires the society’s constitution to include the time within which, and the manner by which, notices of general meetings and notices of motion must be notified. The society’s constitution must also provide for the quorum and procedure for general meetings (including for example whether votes may be cast by electronic means), including voting procedures, procedures for proxies (if any), and whether the quorum takes into account the members present by proxy or casting postal votes or votes by electronic means.

The society’s constitution must also include the arrangements and requirements for special general meetings under section 64(3), unless that provision has been negated under section 67. Section 64(3) requires a special general meeting of the society to be called to consider and determine a matter which half or more of the officers are prevented from voting on. You can find a full discussion of these sections and the conflict of interests procedure in our article here.

AGMs and meetings are important for an incorporated society – they are one of the key differences from other entities, so it makes sense that there are rules about them which had been lacking before.

Summary

With the new Act comes a lot of changes to the requirements for an incorporated society’s constitution. We have helped many incorporated societies over the years and would be happy to discuss your situation with you, especially when it comes to amending your society’s constitution so it meets the requirements set out in the new Act. You can contact us any time by email or phone.

We have a lot more resources at this page dedicated to the Incorporated Societies Act 2022.

This article is not a substitute for legal advice and you should consult your lawyer about your specific situation. Please feel free to contact us at Parry Field Lawyers.

More from this series

The new Incorporated Societies Act 2022 and your constitution: What has changed for membership?

The new Incorporated Societies Act 2022 and your constitution: What has changed for governance?

The new Incorporated Societies Act 2022 and your constitution: Amendment procedures

The new Incorporated Societies Act 2022 and your constitution: Dispute resolution procedures

The new Incorporated Societies Act 2022 and your constitution: Name, purposes and winding up

Welcome to the White Paper that you can download here: “The Decentralised Revolution: Understanding the potential of Blockchain, DeFi, Crypto, DAOs, NFTs and the Metaverse to drive innovation, creativity and new paradigms“.

Sparked by the Reserve Bank of New Zealand issues papers about the future of money it uses that as a launching point to take a higher level perspective of what the future might look like. The paper is divided as follows:

Introduction
Part I: Getting Definitions Right
Part II: So what are we really talking about?
Part III: What is the Potential?
Conclusion: What should we be talking about?

Download it here.

Or the audio of this is here:

If you have thoughts feel free to email me steven@theseeds.nz

Steven Moe

Our thanks to Kate Frykberg who has written this Guest Blog post for us – you can find out more about the work she does here. https://kate.frykberg.co.nz/=

If you are unsure how the philanthropic sector in Aotearoa NZ is organised and works, you are in good company. It is a bit confusing, even for those of us who work in it.

Here is my take on the different kinds of philanthropic giving, including where the money comes from and how it operates, as well as some considerations and tips for grant seekers.

The different kinds of philanthropic funders

Overall, philanthropic funding tends to fall into the following categories:

Personal Giving: Most of us give money to good causes, perhaps on a small scale like a donation to an online appeal, or perhaps on a large scale, like supporting the redevelopment of a children’s hospital. And it is something that we can do any time – even, through making a bequest in our will, after we are dead. Individual giving has historically been the largest single source of community funding.
Private trusts and foundations: eg Tindall Foundation, JR McKenzie Trust, Todd Foundation, NEXT Foundation. Essentially this is a larger scale and more intentional, organised, transparent and accessible version of individual giving, where wealthy families or individuals set up a charitable organisation specifically to provide funding for good causes. Often the money is given out in the form of grants, which are financed through the income earned from an endowment fund that is invested and designed to last for generations. Some foundations operate on a “spend-down” model where a large sum of money is progressively given to the community until none remains, and sometimes the money may come from annual donations from family members. Some family foundations operate nationally and some regionally.
Community Foundations, Donor Advised Funds and Trust companies eg Acorn Foundation, Auckland Foundation, the Gift Trust, Perpetual Guardian and Public Trust. These organisations provide a shared infrastructure both for managing giving from estates after the donor has passed on, and for people with some wealth who don’t want to set up their own foundation. Services usually include both managing the investments and supporting grant making. The seventeen Community Foundations and the Gift Trust are non-profit models, while Trust Companies like Perpetual Guardian and Public Trust are commercial organisations.
Statutory Trusts: These are grant-giving organisations which are set up via various acts of parliament and/or are administered by government agencies. Aotearoa NZ is unusual internationally in that we have a significant number of statutory trusts, which are in turn responsible for a significant portion of philanthropic funding. They include:
- Community Trusts: like Foundation North, Rata Foundation and Wellington Community Trust. These trusts were set up when the regional Savings Banks were sold in the 1980s and 1990s. The proceeds of these sales were invested, and the annual income generated is given as grants to communities, with each Community Trust focusing on the region in which their Trust bank operated. Here are twelve community trusts operating across Aotearoa.
- Energy Trusts: like Rotorua Energy Charitable Trust, TECT. These trusts were set up in the 1990s, when the electricity supply authorities (e.g., local power boards) were restructured. There are 24 Energy Trusts in Aotearoa, although some support their communities through energy rebates rather than grants. Like Community Trusts, they also operate on a regional basis.
- Gaming Trusts: eg Lion Foundation, NZ Community Trust, Pub Charity. These are technically statutory trusts however their funds come from the proceeds of gaming machines (pokies). Gaming Trusts are required by law to distribute at least 40% of gaming machine proceeds to the community.
- Government-administered grant schemes: eg Lottery Grants Board, Community Organisation Grants Scheme (COGS). Some grantmaking is administered directly by government agencies, and in particular the Department of Internal Affairs is responsible for a considerable number of funds, including the Lottery Grants, which distributes funds from the sale of lotto tickets. Many other government departments also provide grant schemes alongside funding provided through contracted services.
Corporate Foundations and Business Giving: e.g., Vodafone Foundation, MAS Foundation. Unlike business sponsorship, where there is usually an expectation of direct benefit to the business from funding provided, some businesses set up corporate foundations which manage their giving in much the same way that a family foundation might. Other simply give directly to community causes. The benefit to the business is indirect, through demonstrating commitment to the community and through being a good corporate citizen.

The above is not a definitive list but it covers most of the different kinds of philanthropic organisations in Aotearoa NZ. My acknowledgements to BERL, as the categorisation above is based on their research released in 2015 into the Philanthropic sector.

Other considerations

Here are two additional considerations:

The terms used are often not very helpful. Take for example the word “foundation.” As Wikipedia notes, a “foundation is category of nonprofit organization or charitable trust that typically provides funding and support for other charitable organizations through grants….However, the term “foundation” may also be used by organizations that are not involved in public grantmaking”. So, if an organisation calls itself a foundation, the chances are that they provide grants to the community, but there are many examples, e.g., university and hospital foundations, which are endowment funds designed to specifically benefit the organisation which set them up. Similarly, a public grantmaking organisation may choose to call themselves a Trust rather than a Foundation.
There is a joke which goes “If you have seen one funder…. you’ve seen one funder”. In other words, it is difficult to make generalisations about what funders want or how they think, because every funder works differently. Some are transparent (see my previous blog on funder transparency) and community focussed, some less so. But, thanks largely to the good work of peak body Philanthropy NZ, more funders are actively exploring their role to support communities well, particularly those who choose to be members of Philanthropy NZ.

Top tips for grant-seekers

So yes, the philanthropic sector is a confusing one. What does this mean for community sector organisations looking for funding? Here are my top tips:

Look for a good fit between what you do and what the funder focuses on. It is a waste of everyone’s time to apply for funding when there is no alignment in what you are both trying to achieve.
Try to have a conversation before applying. Often funders are willing to provide informal advice about potential applications.
Look at who they have funded & how much they gave. If a funder only supports arts organisations and you are working on environmental projects, it is probably not worth applying. Similarly, if their average grant size is 10k and you are looking for 250k, again it is probably not worth applying.
When writing grant applications, try to pitch them to an audience who:
- Don’t have much time – in other words, keep in succinct
- Are not experts in your field – in other words, keep it simple and clear.
Try to build honest, reciprocal relationships with funders. The best funding relationships are those where we both give and receive feedback and where we can be honest about both our challenges and triumphs.

If you would like to discuss this you can contact Steven Moe stevenmoe@parryfield.com at Parry Field Lawyers.

The Financial Markets Conduct Act 2013 (“FMCA”) has rules about who can invest when you are issuing debt or equity securities. The basic principle is that any issue of securities (either equity or debt) will require information to be disclosed (in a product disclosure statement) unless you fall within an exemption. A product disclosure statement provides an investor with essential information to help them weigh up the risks of investing.

There are two types of investors that fall within the exemptions:

People who know enough to already be protected e.g. wealthy enough or know the entrepreneur well enough to have sufficient access to information; or
The nature of the offer is what provides the exclusion.

These main categories are set out in schedule 1 of the FMA Act here.

Looking at each of the main categories that we see used most often:

Wholesale investors – includes wealthy or sophisticated people such as people who subscribe for more than $750k; operate an investment business; have assets or turnover of more than $5 million or if a certificate is signed that they are an eligible investor.
Close Business Associates – this category of people are able to obtain information about the company such as directors, immediate family members, people who already have more than a 5% shareholding in the company etc.
Employees – if there is a share scheme then it can be used as a category to allow shares to be issued.
Small offers – an offer to less than 20 people in 12 months and up to $2 million from personal offers can be obtained. A warning statement is needed and you must tell the FMA as well.
Crowd funding – this is another option but needs to offered through a registered platform. An aggregate limit of $2 million in the last 12 months applies and the monetary limit includes both debt and equity securities as well as any ‘small offers’.

By coming within one of these exemptions you will have less regulations to comply with. We have assisted many investors as well as founders to think through how they will fit within an exemption.

A warning needs to go on the front of documents which looks like this:

“Warning

You are being offered [name of financial product type (for example, ordinary shares)] in [name of issuer].

New Zealand law normally requires people who offer financial products to give information to investors before they invest. This requires those offering financial products to have disclosed information that is important for investors to make an informed decision.

The usual rules do not apply to this offer because it is a small offer. As a result, you may not be given all the information usually required. You will also have fewer other legal protections for this investment.

Ask questions, read all documents carefully, and seek independent financial advice before committing yourself.”

If you would like to discuss this you can contact Steven Moe stevenmoe@parryfield.com at Parry Field Lawyers.

Parry Field Lawyers is pleased to have assisted tech start-up Komodo on their recent capital raising. Komodo have successfully raised $1.8 million allowing them to provide much needed wellbeing support to students. The start-up provides a platform for students to communicate with staff and provides schools with ways to identify and address issues such as mental health and bullying.

We are proud to have supported the company on this journey for several years now right from the beginning. Their company represents an ongoing shift towards companies and investors wanting to create an impact through their work.

The transaction was led by Senior Solicitor Aislinn Molloy and Partner Steven Moe with assistance from many in the Parry Field team as well.

Chris, CEO and Founder of Komodo says this:

“From incorporation and crazy ambitious dreams, to this point of our exciting journey, Parry Field Lawyers have been superb in guiding us through an area that can be tricky for many founders to get right. The team have ensured we have done things right from the beginning and we are truly grateful for the dedication that both Aislinn & Steven, with the rest of the team, have provided.”

For more on the deal, see this article: https://techcrunch.com/2021/08/30/new-zealand-based-student-wellbeing-platform-komodo-raises-1-8m-nzd/

If you are needing advice on a start-up or capital raising please feel free to contact Steven Moe stevenmoe@parryfield.com at Parry Field Lawyers

You have probably seen lots of articles and webinars hammering on about directors’ duties.

You are left feeling slightly depressed about the idea of becoming a director. Or maybe you are one already and wondering if it’s really worth it.

There are recurring topics when it comes to risks of being a Director. You will have heard about the Mainzeal case [1] and perhaps also Debut Homes [2]. In both cases, directors were held to be in breach of their duties under the Companies Act 1993. They were, as you probably know, pinged heavily for their failures.

Like much media reporting, the headlines can be scarier than the detail. So perhaps it’s time for some good news.

Make no mistake, recent law tells us that we need to be fully alert when carrying out our duties as directors. There is no excuse for not being well aware of the law (and if you haven’t read these cases, then at least find a good summary and get on with it.)

However the good news is that the Companies Act itself provides some relief from what some of the doom merchants are saying.

The good news starts by having a closer look at the long title of the Companies Act which says:

An Act to reform the law relating to companies, and, in particular,—

to reaffirm the value of the company as a means of achieving economic and social benefits through the aggregation of capital for productive purposes, the spreading of economic risk, and the taking of business risks; and

to provide basic and adaptable requirements for the incorporation, organisation, and operation of companies; and
to define the relationships between companies and their directors, shareholders, and creditors; and
to encourage efficient and responsible management of companies by allowing directors a wide discretion in matters of business judgment while at the same time providing protection for shareholders and creditors against the abuse of management power; and
to provide straightforward and fair procedures for realising and distributing the assets of insolvent companies.

If you look at the underlined bits, you will see that Parliament itself has affirmed the value of the company as an essential engine to carry out “economic and social” policy in our country. It accepts the taking of “business risks”. If you are a director you are allowed “a wide discretion in matters of business judgement”.

But it’s a balancing act: This policy and the latitude allowed must be held in clear tension and balance with the “protection for shareholders and creditors against the abuse of management power”.

Why is this good news? Fundamentally, it gives a strong direction to Courts to allow for sensible business risk. But at the same time it strongly indicates what is not sensible. It prescribes boundaries, beyond which you as a director ought not to go. If you are in danger of heading over a boundary line, then you will have some clear choices to make.

The comfort this gives is that it will ensure that Courts are not quick to find small discrepancies and whack the directors too readily – otherwise the fundamental purpose of the Act is undermined and a major policy for the successful operation of business and social enterprise is undermined. There is and must be scope for risk taking.

What are the reasonable limits to the scope of risk?

Now this is where it might get a bit dull, but it is important.

Solvency is the issue – the touchstone.

Section 4 of the Act sets out two types of solvency:

Trading solvency – the requirement that the company is able to pay its debts as they become due in the normal course of business;
Balance sheet solvency – the requirement that the value of the company’s assets must be greater than the value of its liabilities, including contingent liabilities.

You as a director must have a “sober assessment” on an ongoing basis as to the company’s likely future income and prospects. Not all directors are financially minded or trained (some are there for other skills). Such directors need to make sure they are getting reliable and current summaries from those who are financially literate.

The three key duties that you have as a director are:

You must act in good faith in what you believe to be the best interest of the company (section 131);
You must not agree to cause or allow the company’s business to be carried on in a manner that is likely to create a substantial risk of serious loss to the company’s creditors (section 135);
You must not agree to the company incurring an obligation unless you believe at that time, on reasonable grounds that the company will perform the obligation when it is required to do so (section 136).

In a nutshell here is what the Act is trying to put the brakes on:

Directors making decisions (or avoiding decisions) that are likely to result in people beyond the shareholders suffering loss e.g. creditors. Its one thing for the company to put its own funds at risk (including shareholders contributions), but it’s quite another for the company to begin to put third parties at risk. The law may accept the former as a reasonable “business risk”. But it may view the latter as an “abuse of management power”.
Directors making decisions to avoid their own personal guarantees being called on. As a director you may have entered into a personal guarantee to support the company borrowings or other commitments e.g., a lease. Again the law takes a dim view of any action you take as a director which is more about you protecting your guarantee and less about protecting third party creditors or even shareholders.

If you are facing a doubtful situation what should you do?

Resign? That may be your only option. Merely voting against a dodgy proposition may not be enough in the longer term. Raising issues at a board level and giving the board a reasonable time to change its stance may be a reasonable position. However if the company continues to sail on into troubled waters, contrary to your views, then you must act.
Trigger insolvency regimes? That may well be the alternative to the above but is fairly rarely done by directors in New Zealand. It is more common to hear the view that a director continued on the board in the hope of “rescuing” its direction. Again, this is a doubtful strategy.

Directors’ and Officers’ liability insurance.

This sort of insurance is highly advisable for most trading companies. (You can’t have any such insurance if you don’t have a constitution – this is discussed more here).

As a director you may be well aware that you have a policy and may even know what the total cover is. But are you aware of other essential details such as:

The notice provisions and how soon the insurer must be notified for the policy to be effective?
Whether the defence costs under that policy are adequate in today’s climate? In particular make sure the defence costs, of any action that you are relying on, are separate from the liability costs – something that some directors have in the past found out wasn’t applicable – to their considerable cost.
What is covered and what is not? This seems obvious, but finding out after an insurable event arises, is not the best time to become more acquainted with your policy.

Conclusions

Company law accepts that business risk is a reality. The Company structure permits a certain degree of freedom;
Balanced with that, the same law guards against over extending the use of that freedom to trade with other people’s money and not just your own company’s, or to be trading in a way that is more with an eye to protecting your own personal interests (e.g. personal guarantee protection) than that of the company and its creditors;
So you should take all reasonable steps to be alert and knowledgeable about your company’s financial position and prognosis, put in place appropriate insurance and have the courage to take appropriate steps when you think the company is getting into difficulty.
Being a director can be a valuable contribution to our country’s economic and social well- being. Don’t be put off by the headlines only. Make your decision to ‘sign up’ based on a bit of solid research-and if you do become a director, maintain that approach throughout.

We have a lot of experience helping Directors, Boards and Companies – if there is something you would like to discuss then let us know.

DISCLAIMER: This article is of a general nature and cannot be relied on as specific legal advice. If you are thinking about becoming a director, or are a director facing a difficult decision, you should take advice specific to your fact situation.

[1] Yan v Mainzeal Property and Construction Limited (in liquidation) [2021] NZCA 99.

[2] Debut Homes Limited (in liquidation) v Cooper [2020] NZSC 100.

Entering into agreement and contracts is a crucial part of business. It is important to ensure that these transactions take place without hiccups, as disputes in contract can be costly, time consuming and damage relationships. In our line of work, we see similarities in the hurdles that trip people up when they are entering into contracts. To help with this we have created this list of 7 useful tips to assist and point out the hurdles to avoid when entering into contractual agreements.

Contract Formation

The basics required for the formations of a contract are: Offer, Consideration (usually money) and Acceptance. If those exist a contract may be in place – even if it is not written down.
Make sure you receive a signed copy of the final version of the contract. We often see issues arising where one party signs and send the contract to the other party, on the understanding that the contract is finalised, but the other party makes further changes before signing or doesn’t sign the contract at all.
It is essential to ensure you receive a finalised contract which is signed by all parties/ which incorporates all agreed changes.

Record Keeping

Save important emails, relevant folders, keeping written records of conversations (follow up email recording what was agreed; meeting minutes etc).
Tailor a system that works for you personally, works for your team and your organisation. Be disciplined and stick to it, making sure the process is clear and being followed by all relevant people.
Take time to review your process every now and again, to ensure they are still fit for purpose.
There are some legislative and contractual requirements for documents and records that must be kept for a specified time. Know your obligations and abide by them.

Language

If you have a few people in your business who enter into contracts for your business then when they are sending an email or making a phone call they have the potential to commit your business to something.
If that’s you, ensure that you do not use language that can commit the business to transactions unless you are 100% sure that what you are doing is acceptable, and achievable. To avoid this use “less binding” phrases that do not commit the company, i.e.
- “I will seek instructions”
- “I will confirm in writing”
- “I will talk to the leadership team and confirm”

Good Faith Transactions

While it is important to maintain good relationship it is hard, expensive and time consuming to get money back once it is paid, so if you are making a payment make sure there is an agreement in place.
To ensure a smooth transaction it is good practice to keep a record of the circumstances of good faith payment with an emphasis on recording when it would be repaid if no agreement was reached.

Variations

Changes to contracts are common practice in business. Variations offer much needed flexibility to agreements and allow contracts to be useful even in changing circumstances. However, poorly managed variations can present more bad than good. Poorly managed variation can be time consuming, expensive and strain the relationship between parties. They can result in misunderstanding or confusion between the parties or end up in lengthy and costly litigation.

Practical Tips:

Ask whether a variation to the contract is necessary, or if it can be dealt with some other way.
Check the processes for variation in agreements.
Clearly specify the terms of the contract that are being varied.
Consider the flow on effects on other clauses.
Minimise as much as possible oral variations and if they occur, record them in writing.

Reviewing Documents

If contract documents are not standard, are new/unfamiliar, have substantial variations to them, or carry the potential for increased liability, we recommend having the documents reviewed. Reviews might be internal, with a colleague or supervisor, or you could let a lawyer review documents.
Make sure you give the person reviewing the documents all relevant paperwork (the full contract) etc; so they can ensure consistency and understand the context when they review.

Confidentiality

Have a system in place to ensure confidentiality is kept and there is a process for dealing with breaches, as they may occur.
Make sure documents are marked as confidential.
When sending sensitive emails, double check who you are sending to and who is copied in to the email. Check long email chains for sensitive material.
Check your legal and contractual requirements. Are their specific requirements in your contracts to keep material confidential, or are there individuals you have to notify if there is a breach?

We hope that these tips are helpful in your negotiation of contracts. If you’d like to discuss then our team of experts would be happy to do so.

This article is not a substitute for legal advice and you should consult your lawyer about your specific situation. Please feel free to contact Steven Moe – stevenmoe@parryfield.com at Parry Field Lawyers

As part of privacy week 2021 it was great to hear from the Privacy Commissioner, John Edwards and we would like to thank him for his time. The video is below. We hope it helps demystify and answer question you might have had regarding privacy and the new Act.

We had a great turn out of around 70, in person as well as over zoom, and we appreciate all of those questions which helped facilitate a great discussion

The slides from the presentation can be accessed here
Some resources mentioned can be accessed here from the Privacy Commissioner website; and
We put up articles, free guides for charities and social enterprises, templates, videos and more on our website under the resource tab at parryfield.com

Download it here.

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