The New Zealand Business Number Act 2016 (No 16 of 2016) received the Royal assent on 15 April 2016.
For companies, the Act comes into effect 16th May 2016. For unincorporated entities, the effective dates have yet to be appointed by the Governor General by Order in Council, but no later than 12 December 2016.
And what is a bit scary, is that the new NZBN register is already live. Check it out at email@example.com.
What NZBN could mean to you
First of all, the definition of “unincorporated entities” is very wide and includes individuals, partnerships and trusts.
Second, while it is said to be for entities/persons “in business” this can include charities, entities/persons who are not “in business” as we would normally understand that term. See below for more discussion on how wide this definition extends.
Having a NZBN appears to be voluntary, as we cannot see any compulsion to obtain one. Although all registered companies have one, and overtime entities registering under any legislation, like charities, will also have one.
One concern we have is that government agencies will be able to require a NZBN from an entity/person if they want to deal with that agency. Sounds like compulsion by stealth to us.
Everyone will have access to public information on the register (see below on how wide that information is).
All government agencies will have full access to non-public information on the register, and will be entitled to add information to that non-public part of the register.
Third parties will be entitled to access to the non-public information if the registered person consents. In our experience, a person often has little option withhold consent for similar registers if the third party is their bank, a supplier (goods, services, insurance companies etc), a major client, or anyone else with power to compel consent through business necessity of the entity/person.
As professional advisors we should be looking out for situations where our clients could unwittingly authorise third party access. Watch for terms on this under supplier or client contracts, insurance, bank and finance company documents. You may not be able to remove these consenting clauses, but you can put your client on notice, and you can do a regular check to determine what exactly is held on your client.
We have provided more detail on the Act below. If you would like more information or advice on the implications to your or your clients, please contact us.
You can also read further on the Companies Office website here.
What’s the purpose of an NZBN?
The Act aims to reduce the time and money eligible entities spend on interacting with government and each other. To achieve this, the Act allows eligible New Zealand entities to obtain or be allocated a New Zealand Business Number (NZBN) – a unique identifier to be used for all interactions with government.
Eligible entities will also be registered on a New Zealand Business Number register that contains data on all registered entities. The register is to:
- enable an NZBN identifier to be allocated to eligible entities; and
- enable individuals dealing with NZBN entities to use the NZBN; and
- enable certain information to be collected and shared between authorised government agencies; and
- make certain information publicly available
And while that seems reasonable for public entities (registered with the Companies Office and similar) do individuals, trusts and partnerships want their business details published? Further, it is possible to have your NZBN published under different sections.
“11(1) A person (natural or otherwise) that is more than 1 entity is eligible to be allocated an NZBN, and be registered on the register, in their or its capacity as each of those entities. (2) Despite subsection (1), a person who is a sole trader is eligible to be allocated only 1 NZBN and be registered on the register only once as a sole trader.
An entity or person also needs to work out whether they are entitled to a NZBN and in what capacity.
So who’s covered?
- Incorporated Building societies
- Incorporated Charitable trusts
- New Zealand registered Companies
- Overseas companies registered in New Zealand
- New Zealand registered Limited partnerships
- Overseas Limited partnerships registered in New Zealand
- Friendly societies, branches of friendly societies, and credit unions registered or deemed to be registered in New Zealand
- Incorporated societies registered in New Zealand
- Industrial and provident societies registered in New Zealand
- all government agencies
- any other body corporate or a corporation sole
- any other entity declared by regulations to be a corporate or public entity for the purposes of the Act
- any other “unincorporated entity”, which means for example, a sole trader, a partnership, or a trustee (or trustees acting jointly)) that is in business in New Zealand
So that it basically everyone in business in New Zealand!
What is a “business”?
“business” means any undertaking—
(a) that is carried on, whether for gain or reward or not; or
(b) in the course of which either of the following occurs, whether free of charge or not:
(i) goods and services are acquired or supplied; or
(ii) any interest in land is acquired or disposed of.
That is a very wide definition, so that individuals and trusts that would normally not be considered to be “in business” are “in business” for the purposes of this Act.
What’s it all about?
The Registrar must keep and operate the register in a manner that allows members of the public to access and search public primary business data only.
Businesses may be required to provide their NZBN to government agencies in the future.
Government agencies will have access to all the information on the register (by being on the register an entity/person is consenting to the information being released).
Government agencies will be able to provide information to be recorded against a registered entity/person.
Third parties may access certain other (non-public) information, on consent of the entity/person.
Third parties may be given bulk business data (where the entity/person) is not identifiable.
To obtain a NZBN you apply to the Registrar. Some entities will be automatically given NZBN’s, for example New Zealand companies already have a number.
The Act is administered by the Ministry of Business, Innovation, and Employment.
It will be an offence to provide a NZBN that is false, or that relates to another entity. The fine is up to $250,000. It will also be an offence to provide false information concerning registration, with a fine up to $200,000.
What information will be on the Register?
Public primary business data will be publicly viewable on the register, as well as private (non-public) information. It will differ between Corporate and Public entities and Unincorporated entities.There is a wide range of information gathered, so check out the Act for more details.