Business Numbers and Not-for-Profit Entities

Not-for-Profits and New Zealand Business Numbers

  • The New Zealand Business Number Act 2016 provides that incorporated societies registered under the Incorporated Societies Act 1908, charitable trusts incorporated under the Charitable Trusts Act 1957, friendly societies and credit unions registered under the Friendly Societies and Credit Unions Act 1982, and industrial and provident societies registered under the Industrial and Provident Societies Act 1908 are assigned a New Zealand Business Number (NZBN).
  • While having a NZBN may be of more obvious benefit to businesses, the anticipated benefits must also apply to not-for-profits.

What is a New Zealand Business Number?

  • The New Zealand Business Number Act 2016 was enacted on 15 April 2016.
  • A New Zealand Business Number (NZBN) is a unique a 13 digit Global Location Number (GLN) assigned to businesses and other entities, including not-for-profits, in New Zealand, and is usable worldwide.  Use of NZBNs was expected to transform how entities with NZBNs share key information and interact with Government and with each other. 

What are the benefits of NZBNs?

  • According to the 2016 Economic Development Minister (and his quoted comments should also apply to not-for-profits): 
  • “NZBNs are a key initiative of the Government’s Better for Business programme. They are a unique identifiers that reduce the time and energy businesses spend providing government the same information in different ways.” 
  • “A change to NZBN information will, over time, change the same information on other databases held by government.  Ultimately businesses will only need to tell government their information once.”
  • “For businesses it will save time and cost through reduced form filling and data entry processes, and speed up dealings with government agencies.”
  • Once fully implemented, the annual benefits for businesses from the NZBN Programme have been estimated to be around $60 million, and not-for-profits can also expect savings.
  • In time NZBNs are expected to become the main identifier for businesses and not-for-profits to share key information with Government Departments (but will not replace all identifiers across Government – for example, GST or ACC numbers) and other businesses.  Ultimately, a change to NZBN information (primary entity data) will change the same information on other databases held by Government.  
  • NZBNs are intended to enable integrated services between Government agencies and the creation of innovative private sector services.  NZBNs make consistent identification of an individual business or not-for-profit possible, making it possible to build a common language between software systems as a basis to deliver new services.  For example, software suppliers may use NZBNs to design and deliver services to manage more efficiently the information businesses and not-for-profits provide to Government agencies, suppliers and customers.
  • In time, the NZBN should make it easier for businesses and not-for-profits to invoice and pay bills, apply for credit, and positively identify other businesses and not-for-profits.  
  • It will become more common to use an NZBN when dealing with customers, other entities, professionals, banks and Government agencies.

FAQ’s about NZBNs

  • The NZBN Register pulls together publicly available information from a variety of sources, and currently contains information relating to all companies registered in New Zealand (over time, the NZBN will replace Company and Incorporated Society Registration Numbers).  
  • Now all businesses and not-for-profits in New Zealand should be able to have NZBNs, including State Sector entities, partnerships, limited partnerships, incorporated societies, charitable trusts, and unincorporated entities including sole traders.  
  • In future, eligible businesses and entities including not-for-profits will be able to update NZBN information in one place and it will automatically update across all those source databases.
  • There is no cost to register on the NZBN as a sole trader.  
  • Government agencies will gradually use NZBNs to improve data quality and reduce duplication.  The Ministry of Business, Innovation and Employment along with New Zealand Trade and Enterprise, Callaghan Innovation and Statistics New Zealand have already started using NZBNs, and other key agencies working regularly with businesses were required to recognise NZBNs by the end of 2017.
  • The NZBN system should transform and streamline how businesses and not-for-profits share key information and interact with each other. 
  • Eventually an eligible business, entity or not-for-profit will be able to use their NZBN as their main identifier and to share key information with Government agencies, making it possible for NZBN entities and Government agencies to link information in a secure way. 
  • The NZBN system will enable innovative time-saving administrative solutions between businesses and not-for-profits, their suppliers and Government.  Consistent identification of each NZBN entity should facilitate building a common language between software systems. 
  • This should all reduce time spent on administration and reduce compliance costs.
  • In time, the New Zealand Business Number should make it easier for people to find businesses and not-for-profits, easier for businesses to do business in Australia, and cheaper for businesses and not-for-profits to interact with Government.

Why the NZBN?

  • New Zealand businesses have been requesting a universal identifier for many years, and similar business identifier systems exist in other countries such as Australia, Singapore, Norway, the Netherlands, Canada, India and Malaysia. 
  • The NZBN and ABN (Australian Business Number) will be mutually recognised in each country.
  • Options for unique identifiers considered included the IRD number and other international number systems.  Global Location Numbers were chosen because they are globally unique and are part of a credible international system, with strong links to trade and supply chain logistics (other number systems had drawbacks, including larger compliance costs, or privacy, legislative or sovereignty issues).
  • For examples of how the NZBN please click here.  

For specific advice the issues discussed in this article, please contact Mark at mark@nfplaw.co.nz.

This is one of a series of articles on societies and charitable trusts by Mark von Dadelszen, a lawyer and author of Members’ Meetings, 3nd Edition, 2012, and Law of Societies, 3nd Edition, 2013 (both texts being in the course of editing for 4th editions to be published after the new Incorporated Societies Act is enacted).