Plain language law

New Zealand law explained for everyone

Companies Act 1993

Capacity, powers, and validity of actions

16: Capacity and powers

You could also call this:

“Companies have broad powers but must follow legal and constitutional limits”

You have the power to do many things as a company in New Zealand. You can run a business, do activities, perform actions, and make deals both inside and outside of the country. You have full rights and powers to do these things.

However, there are some rules you need to follow. These rules come from the Companies Act, other laws, and general legal principles. These might limit what you can do.

Your company’s constitution can also affect what you’re allowed to do. The constitution can only restrict your company’s abilities, rights, and powers. It can’t give you more power than the law allows.

Remember, even though you have many powers as a company, you must always act within the boundaries set by the law and your company’s constitution.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM320117.

Topics:
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15: Separate legal personality, or

“Companies are separate legal entities from their owners”

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17: Validity of actions, or

“Company actions remain valid even if they exceed company powers”

Part 3 Capacity, powers, and validity of actions

16Capacity and powers

  1. Subject to this Act, any other enactment, and the general law, a company has, both within and outside New Zealand,—

  2. full capacity to carry on or undertake any business or activity, do any act, or enter into any transaction; and
    1. for the purposes of paragraph (a), full rights, powers, and privileges.

      1. The constitution of a company may contain a provision relating to the capacity, rights, powers, or privileges of the company only if the provision restricts the capacity of the company or those rights, powers, and privileges.