Australia: Corporations Law Reforms In Vanuatu, Solomon Islands And Fiji

Last Updated: 29 September 2010
Article by Nitij Pal

Various jurisdictions in the Pacific are undergoing law reform in the corporate law field. In most instances the redrafting of previously outdated legislation goes hand in hand with updating the manner in which corporate documents are held and retrieved at the various companies offices' registries.

We briefly review the status in the Vanuatu, Solomon Islands and Fiji.

The origin of companies law in these three jurisdictions owes much to their colonial past and the consolidation of English company law in the Companies Act 1862 (UK). It is from this Act that the companies' legislation in the three jurisdictions (and in Australia and New Zealand) is descended. Despite subsequent amending and consolidating acts many of the fundamental features of the 1862 Act have survived down to modern times.

The aim now is to introduce company laws which are more appropriate for small island economies. The new laws should be tailored to suit the business environment in Pacific countries and assist entrepreneurs with overcoming the often high costs associated with incorporating, and then maintain the incorporation of companies in the region.


The Asian Development Bank (ADB) has assisted Vanuatu in the drafting of a new Companies Act which will make it easier for people to conduct business in the island nation.

The proposed Companies Act presents a range of new choices for Ni-Vanuatu who plan to use a company as a vehicle for business. Once a company is established and running, the new compliance requirements in the Act will ensure lower transaction costs for company owners. More relevant reporting requirements contained in the new Act will also strengthen corporate governance.

The new Companies Act supports the formation of single shareholder companies, and introduces the concept of community companies. The proposal is that a community company may comprise of a women's group, a group of farmers, or landowner groups, among others. Community companies operate in the interests of their members, and utilize community assets such as handicrafts, fishing boats, local produce for the benefit of the entire community as well as preserving the sustainability of those assets for future generations.

As soon as the Companies Act is passed, the company registry will be modernized to make it easy and inexpensive to register a company, as well as to provide a reliable record for lenders and others, planning to do business in Vanuatu.

Solomon Islands

The Companies Act 2009 (SI) (New Act) was passed by the National Parliament, and assented by the Governor General in March 2009. The New Act repealed the previous Companies Act (Cap 175) (SI).

Single shareholder companies are now permitted. Importantly, private companies can be registered as community companies provided the principal objective is the promotion of the community interest (whose names must end with either the words "Community Company Limited" or "CCL"). Community interest means any interest that benefits the community and which a reasonable person may consider is being carried on for the benefit of the community.

Importantly community companies must not make distributions or pay dividends to shareholder, nor can they make loans to directors and shareholders.

The New Act also sets out model rules for companies to rely on or adopt its own rules, interestingly the common names give to rules such as memorandum and articles of association or constitution have not been used.


It appears that the Fiji Government has engaged external consultants to undertake a review of, and consider a range of policy issues relating to a review of the Companies Act (Cap.247) (Fj), Registration of Business Names Act (Cap.249) (Fj), and related laws and regulation.

The consultants released an issues paper which according to them:

  • identifies the key issues and areas for reform; and
  • outlined issues and questions for the Government and key stakeholders to consider.

It appears that the consultants will consider those provisions of the existing Companies Act (Cap.247) (Fj) which continue to have relevance as well as to comparative legislation in Australia, New Zealand, United Kingdom and South Africa, with a view to identifying those systems and approaches which are best suited to the Fiji markets, system and regulatory structure.

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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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