Company was removed from the register after the death of its sole shareholder and director
The NZ High Court has allowed the restoration of a company that was removed from the Companies Register, but under the condition that a New Zealand director must first be appointed.
In Lock v Registrar of Companies [2023] NZHC 509, Caren Lock has filed an application to restore FA Dubois Limited to the New Zealand Companies Register. The company was incorporated in 2005 and was removed from the in 2016, following the death of its sole shareholder and director, Stephen Racz.
Racz’s will appointed Lock as executor of his estate. Lock’s application for restoration relied on s. 329(1)(a)(i) and 329(1)(b) of the Companies Act 1993, which allows a court to order the restoration of a company if it is satisfied that the company was carrying on business or a proper reason existed for the company to continue in existence at the time it was removed from the register, or for any other reason it is just and equitable to restore the company to the register.
Locks hopes to restore the company to the register so that she can sell its sole asset, a block of freehold land near Murchison, for the benefit of the estate. The high court noted that ownership of the land was the sole reason for the company’s existence and the land will be the company’s only asset if it is restored.
The Registrar of Companies has consented to the application, and the Treasury has indicated that it will abide by the Court's decision.
The high court was satisfied that a proper reason existed for the company to continue in existence and that it was just and equitable to restore the company to the register so that Lock could dispose of the company’s sole asset.
However, the court pointed out that a problem arose from the fact the Lock is a US resident. Section 10(d)(i) of the Companies Act requires that any company have at least one New Zealand director. Lock claimed she intended to appoint Janette Moore, of Reefton, as a director of the company once it was restored to the Register, but the court found nothing on the file to indicate that Moore has consented to act as a director.
As a result, the court ordered that FA Dubois Limited be restored to the register but that the order should lie in court until Moore had confirmed her willingness to accept appointment as a director. In addition, the court also required Lock’s solicitors to provide an irrevocable undertaking to the Registrar that they will file the necessary papers to have Moore appointed as a director.
