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Companies Act 1993

Voluntary administration - Protection of company's property during administration

239ABJ: Administration not to trigger enforcement of guarantee of liability of director or relative

You could also call this:

“Directors and relatives protected from guarantee enforcement during company administration”

When a company is under administration, there are special rules about guarantees. If you’re a director of the company, or you’re married to a director, or you’re related to a director, people usually can’t make you pay the company’s debts that you’ve guaranteed. This protection lasts while the company is being administered.

However, there’s an exception. The court can give permission for someone to enforce a guarantee against you. If the court does this, they might set some rules about how it can happen.

In this part of the law, when we talk about a ‘liability’, we mean any kind of debt or obligation that the company owes. It’s not just about money - it could be any kind of promise the company made to do something.

Remember, these rules are there to protect directors and their families while a company is going through a tough time. But the court can still step in if they think it’s necessary.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM321562.

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“Explaining key terms for secured creditors during company administration”

Part 15A Voluntary administration
Protection of company's property during administration

239ABJAdministration not to trigger enforcement of guarantee of liability of director or relative

  1. During the administration of a company, except with the court's permission and in accordance with the terms that the court may impose, a guarantee of a liability of the company must not be enforced against—

  2. a director of the company; or
    1. that person's spouse or relative.

      1. In this section, liability means a debt, liability, or other obligation.

      Compare
      • Corporations Act 2001 s 440J(1) (Aust)
      Notes
      • Section 239ABJ: inserted, on , by section 6 of the Companies Amendment Act 2006 (2006 No 56).