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previously outdated legislation goes hand in hand with updating the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
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
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
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.
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
Importantly community companies must not make distributions or
pay dividends to shareholder, nor can they make loans to directors
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
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.
Winners of the 2010 Lawyers Weekly e.law Asia Pacific Box
Breaker of the Year Award and the 2009 NSW Exporter of the Year
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