What you need to know
- An amendment to the Companies Act 1997 (Papua New Guinea), which is not yet in force, requires all corporate entities registered in PNG, both local and foreign, to re-register in order to maintain their corporate status
- The transitional date and forms have not yet been prescribed
- Local companies are now subject to a "Know Your Shareholder" requirement about beneficial ownership of shares. (This requirement is more onerous than the equivalent law in Australia).
- Late lodgement of annual returns is now likely to lead to automatic deregistration within 6 months after the filing month (in comparison to the 12 month period applicable in other countries such as Australia)
What you need to do
- At present, strictly follow your annual return filing month
- Monitor the transition to the new regime as a re-registration application will be required within one year after the commencement of the new regime (and will probably be most conveniently done during the annual return filing month).
- Companies will need to ask their shareholders for information about non-beneficial ownership of shares. It seems likely the public register will disclose whether or not registered shareholders hold beneficially. In any event, the Registrar will be entitled to ask for information about non-beneficial ownership, presumably in the context of administrative or regulatory enquiries. It may also be that this amendment is in breach of constitutional privacy principles.
- A flow-on requirement regarding ownership of shares is that a more detailed form of share transfer should be used.
- Listed (PNG incorporated) companies are not exempted from the requirement for collection of information about beneficial ownership, and so will need to put in place arrangements with their share registry, and with stockbrokers, to collect the relevant information.
Authors: Richard Flynn (Partner), Jerome Kadamongariga (Associate)
