Once an overseas company is registered under Part XX of the Companies Act 1997, a set of continuing obligations applies.
Section 388 — the name and country must be stated
Every registered overseas company shall ensure that its full name, and the name of the country where it was incorporated, are clearly stated in —
(a) written communications sent by, or on behalf of, the company; and
(b) documents issued or signed by, or on behalf of, the company that evidence or create a legal obligation of the company.
(2) A company that changes its name shall submit a notice to the Registrar in the prescribed form.
The obligation is wider than the equivalent for a local company in section 30, because it adds the country of incorporation. Anyone dealing with the company should be able to see, from the document itself, that they are contracting with a foreign entity and which law incorporated it.
Section 389 — changes must be notified within one month
(a) an alteration to the instrument constituting or defining the constitution of the overseas company;
(b) a change in the directors, or in their names or residential addresses;
(c) a change in the address of the place of business or principal place of business;
(d) a change in any person, or the address of any person, authorised to accept service of documents on the company’s behalf.
Failure is an offence by the overseas company (penalty under section 413(2)) and by every director, every resident agent, and every person in default (penalty under section 414(2)).
The resident agent is personally exposed. A person who agrees to act as agent for service for an overseas company takes on real liability for the company’s filing failures, not merely a postal function.
Section 389A provides that where the name or address of the person authorised to accept service is rectified or corrected under section 395A or 395B, the correction takes effect when it is made to the overseas register.
Section 390 — financial reporting
Divisions XI.1 and XI.2 — the financial reporting provisions — apply to every overseas company carrying on business in the country as if it were a reporting company.
In that application, “financial statements” includes, in addition to the overseas company’s own statements, statements under section 177 for its business in Papua New Guinea, as if that business were conducted by a company formed and registered here. “Group financial statements” similarly includes statements under section 178 for the group’s Papua New Guinea business.
Section 390 contains a series of practical accommodations, each turning on the Registrar being satisfied and notifying the company:
- (3) and (5) — where the company’s own section 177 or 178 statements are accepted as complying with the PNG-business requirement, they are taken to comply.
- (6) and (7) — where the company’s financial statements, or the group’s, comply with the law of the place of incorporation and those requirements are substantially the same as this Act’s, they are taken to comply with sections 180 and 182 and every applicable financial reporting standard.
- (8) — the section does not apply to a class of overseas companies the Registrar has declared exempt by notice in the National Gazette.
The effect is that a foreign parent with audited accounts prepared under a comparable regime is not forced to duplicate them — but it must obtain the Registrar’s notification, and it must still account separately for its PNG business unless subsection (3) is invoked.
Section 391 — the annual return
(1) Every registered overseas company shall submit, during the month allocated to it, an annual return in the prescribed form (a) confirming that the register information is correct at the date of the return, and (b) containing such other prescribed information.
(2) The return must be dated as at a day within that month and the information compiled as at that date.
(3) Where the company is carrying on business here, a copy of the financial statements and any group financial statements prepared under section 390 shall accompany the return.
(4) A company need not make a return in the calendar year of its registration — unless it is deemed registered by section 445.
(4A) to (4C) The Registrar allocates a month on registration; the company may request a different month; and the Registrar may alter it by written notice.
(5) Failure is an offence by the company (s 413(2)) and by every director, every resident agent, and every person in default (s 414(2)).
Section 392 — ceasing to carry on business
An overseas company that intends to cease to carry on business in the country shall —
(a) give public notice of that intention; and
(b) not earlier than three months after that notice, submit a notice to the Registrar in the prescribed form stating the date on which it will cease.
(2) Where the overseas company is dissolved, deregistered, ceases to be a corporate body, or is placed into liquidation in its place of incorporation, the resident agent shall submit notice of that to the Registrar in the prescribed form.
(3) The Registrar shall remove the overseas company from the register as soon as practicable after the date in the subsection (1)(b) notice, the date in a subsection (2) notice, or receipt of a notice given by a liquidator under Schedule 12.
Public notice of intention, then a three-month wait, then the notice of the cessation date. Local creditors are given time to sue, to enforce security, or to apply under section 393 for the liquidation of the company’s PNG assets before the company withdraws.
For a company registered only for name protection under section 384, section 392 reads as “seek removal from the register” rather than “cease to carry on business”.
Section 393 and Schedule 12 — liquidating the PNG assets
(1) An application may be made to the Court for the liquidation of the assets in the country of an overseas company under Part XVIII, subject to the modifications and exclusions in Schedule 12.
(2) The application may be made whether or not the company (a) is registered under Part XX; (b) has given public notice of intention to cease business; (c) has submitted a cessation notice; or (d) has been dissolved or otherwise ceased to exist under the laws of any other country.
- References to assets mean assets in the country; references to a company mean the overseas company; references to removal from the register mean ceasing to carry on business in the country.
- Sections 298(1)(d), (e), (f) and (g) — the restrictions on share transfers, shareholder rights and altering the constitution — do not apply, nor does section 318 (calls on shareholders). Those are matters for the law of incorporation.
- Section 298(1)(b) does not affect the tenure of the directors, but the company and its directors cease to have powers, functions or duties in relation to the PNG assets other than as Part XVIII permits.
- Section 307 applies, but instead of stating that the company is ready to be removed from the register, the liquidator states that it has ceased to carry on business in the country and is ready to be removed from the overseas register.
- Clause 2 preserves creditors’ rights: nothing excludes the right to bring proceedings outside the country for a debt not claimed in the liquidation or an unpaid balance, or in the country for a balance remaining after completion.
Section 393(2)(d) is the striking provision. Even where the overseas company no longer exists under its home law, its PNG assets can still be collected and distributed here under Part XVIII.
Sources
- Companies Act 1997 — ss 30, 177, 178, 180, 182, 298, 307, 318, 384, 388–393, 395A, 395B, 413, 414, 445; Schedule 12; Divisions XI.1 and XI.2
Before relying on anything here, read the current text of the Companies Act 1997 and check for later amendments. If a decision matters to you, get advice — start with the Office of the Public Solicitor, or find a firm in the law firms directory.