A parliamentary sub-committee chaired by the Solicitor-General Lauaki Annandale has been approved by Parliament to review the Companies Amendment Bill 2024.

The committee includes secretary of Justice Peter Graham, chair of Chamber of Commerce Board Adrienne Hosking-Tinirau, president of Cook Islands Law Society Benjamin Marshall, Cook Islands Bank Association president Jason Murray and the drafter of the Bill lawyer Tim Arnold.

According to Parliament, the sub-committee will review the Bill, determine whether the Bill addresses the identified problem and if the Bill had any unintended consequences and recommend legislative measures.

They are to report to the Bills, Petitions and Paper Committee chaired by MP Akaiti Puna by November 18.

Opposition Leader Tina Browne presented the Companies Amendment Bill 2024 that aims to address a loophole in the 2017 Companies Act preventing thousands of companies from re-registering, causing potential significant economic hardship as a member’s Bill in Parliament last month.

In a statement, Browne has earlier claimed that the government failed to take any steps to remedy the anomaly so that companies in the same situation “by now almost 3000” could re-register.

She also explained that in a 2021 decision by the Court involving Seaspray Enterprises Ltd, the Court was asked to determine whether Seaspray, which had been struck off the companies register, could re-register under the 2017 Companies Act.

She said the Court determined that, based on the language of the 2017 Act, there is no authority to approve Seaspray or any other similar re-registration application.

The Court then issued the following statement: “It is appreciated that the findings in this judgment may cause consternation for those involved in re-registration applications for any of the 1000+ nullity companies which have been filed since 10 December 2020, but, for the reasons stated, failure of all those applications is mandated by the present wording of the 2017 Act.”

“An urgent statutory amendment or s 406(b) Regulations may be warranted to provide a different path for such applications outside the present wording of the 2017 Act. Such a course is beyond the ambit of the present application.”

Prime Minister Mark Brown had said that the Companies Act 2017 was enacted to replace the outdated Companies Act 1970-71, which was no longer fit for purpose.

This transition required that all companies registered under the old Act be re-registered under the new legislation and on the new register, Brown said.

“Deadlines were established for this re-registration process; however, many companies missed these deadlines and were subsequently struck off the register, resulting in their assets being vested in the Crown,” the Prime Minister said. Brown said the proposed Companies Amendment Bill, tabled by the Leader of the Opposition, seeks to address these re-registration challenges.