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New Zealand law explained for everyone

Companies Act 1993

Voluntary administration - Effect of appointment of administrator

239X: Effect on directors

You could also call this:

“Directors' powers are restricted while a company is under administration”

When a company is in administration, the directors don’t lose their positions. But their powers are limited. You can’t do your normal director duties unless the administrator gives you written permission first. The only other time you can act as a director is when the law specifically says you can. This means that even though you’re still a director, you can’t make decisions or do things for the company without checking with the administrator or making sure the law allows it.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM321519.

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239W: Administrator is company's agent, or

“The administrator acts on behalf of a company in voluntary administration”

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239Y: Effect on employees, or

“How an administrator's appointment affects employees' jobs and wages”

Part 15A Voluntary administration
Effect of appointment of administrator

239XEffect on directors

  1. The appointment of an administrator does not remove the directors of the company from office.

  2. However, a director of a company that is in administration must not exercise or perform, or purport to exercise or perform, a function or power as a director of the company except—

  3. with the prior, written approval of the administrator; or
    1. as expressly permitted by this Part.

      Compare
      • Corporations Act 2001 s 437C (Aust)
      Notes
      • Section 239X: inserted, on , by section 6 of the Companies Amendment Act 2006 (2006 No 56).