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Limited Partnerships Act 2008

General - Prohibited and disqualified persons

103B: Court may disqualify general partners

You could also call this:

"Court can ban people from being general partners if they break the law or don't follow rules"

Illustration for Limited Partnerships Act 2008

The court can stop you from being a general partner in a limited partnership if you have done something wrong. You might have been convicted of a crime, like fraud or a crime involving dishonesty as defined in section 2(1) of the Crimes Act 1961. The court can also stop you if you have not followed the rules of the Companies Act 1993, the Financial Markets Conduct Act 2013, or the Takeovers Act 1993.

If the court stops you, you cannot be a general partner without the court's permission. The court can stop you for a certain amount of time or forever, depending on how serious your actions were. You can be stopped even if you have not been convicted of a crime.

The court can make this decision if someone applies for an order against you. This application can be made by the Registrar, the FMA, the Official Assignee, or the liquidator of the limited partnership. You will get at least 10 days' notice before the court hears the application, and you can go to the hearing to give evidence or call witnesses.

If you do not follow the court's order, you can get in trouble and even go to prison for up to 5 years or have to pay a fine of up to $200,000. The court's decision will be published in the Gazette, which is like a newspaper for official announcements. The term limited partnership includes overseas limited partnerships.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM6252156.

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103A: Persons prohibited from managing limited partnerships, or

"Who can't help run a limited partnership in New Zealand"

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103C: Liability for contravening section 103A or 103B, or

"Breaking rules as a general partner can make you pay the partnership's debts personally"

Part 2General
Prohibited and disqualified persons

103BCourt may disqualify general partners

  1. The court may make an order that a person described in subsection (3) must not, without the leave of the court, be a general partner or promoter of, or in any way, whether directly or indirectly, be concerned or take part in the management of, a limited partnership permanently or for a period specified in the order.

  2. The court may make an order under this section permanent or for a period longer than 10 years only in the most serious of cases for which an order may be made.

  3. Subsection (1) applies to the following persons:

  4. a person who has been convicted of an offence in connection with the promotion, formation, or management of a company (being an offence that is punishable by a term of imprisonment of not less than 3 months), or has been convicted of a crime involving dishonesty as defined in section 2(1) of the Crimes Act 1961; or
    1. a person who has committed an offence for which the person is liable (whether convicted or not) under Part 21 of the Companies Act 1993; or
      1. a person who has, while a director of a company and whether convicted or not,—
        1. persistently failed to comply with the Companies Act 1993, the Financial Markets Conduct Act 2013, the Takeovers Act 1993, or the takeovers code in force under that Act or, if the company has failed to so comply, persistently failed to take reasonable steps to obtain compliance with those Acts or the code; or
          1. been guilty of fraud in relation to the company or of a breach of duty to the company or a shareholder; or
            1. acted in a reckless or incompetent manner in the performance of his or her duties as director; or
            2. a person who has, while a general partner of a limited partnership and whether convicted or not,—
              1. persistently failed to comply with this Act or, if the limited partnership has failed to so comply, persistently failed to take reasonable steps to obtain compliance with this Act; or
                1. been guilty of fraud in relation to the limited partnership or of a breach of duty to the limited partnership; or
                  1. acted in a reckless or incompetent manner in the performance of his or her duties as general partner; or
                  2. a person who has been prohibited in a country, State, or territory outside New Zealand from carrying on activities that the court is satisfied are substantially similar to being a director or promoter of, or being concerned or taking part in the management of, a body corporate; or
                    1. a person who has become of unsound mind.

                      1. A person intending to apply for an order under this section must give not less than 10 days' notice of that intention to the person against whom the order is sought, and on the hearing of the application the last-mentioned person may appear and give evidence or call witnesses.

                      2. An application for an order under this section may be made by the Registrar, the FMA, the Official Assignee, or by the liquidator of the limited partnership, or by a person who is, or has been, a partner or creditor of the limited partnership.

                      3. Subsection (7) applies on the hearing of—

                      4. an application for an order under this section by the Registrar, the FMA, the Official Assignee, or the liquidator; or
                        1. an application for leave under this section by a person against whom an order has been made on the application of the Registrar, the FMA, the Official Assignee, or the liquidator.

                          1. The Registrar, the FMA, the Official Assignee, or the liquidator (as the case may be)—

                          2. must appear and call the attention of the court to any matters that seem to him, her, or it to be relevant; and
                            1. may give evidence or call witnesses.

                              1. An order may be made under this section even though the person concerned may be criminally liable in respect of the matters on the ground of which the order is to be made.

                              2. If conduct by a person constitutes grounds for making an order under any 1 or more of this section, section 44F of the Takeovers Act 1993, and subpart 6 of Part 8 of the Financial Markets Conduct Act 2013, proceedings may be brought against that person under any 1 or more of those provisions, but no person is liable to more than 1 order under those provisions for the same conduct.

                              3. The Registrar of the court must, as soon as practicable after the making of an order under this section, give notice to the Registrar that the order has been made and the Registrar must give notice in the Gazette of the name of the person against whom the order is made.

                              4. A person who acts in contravention of this section, or of any order made under this section, commits an offence and is liable on conviction to imprisonment for a term not exceeding 5 years or to a fine not exceeding $200,000.

                              5. In this section, limited partnership includes an overseas limited partnership.

                              Compare
                              Notes
                              • Section 103B: inserted, on , by section 30 of the Limited Partnerships Amendment Act 2014 (2014 No 47).
                              • Section 103B(3)(c)(i): amended, on , by section 31(1) of the Limited Partnerships Amendment Act 2014 (2014 No 47).
                              • Section 103B(9): amended, on , by section 31(2) of the Limited Partnerships Amendment Act 2014 (2014 No 47).