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Companies Act 1993

Voluntary administration - Administrator's liability and indemnity for debts of administration

239ADL: Administrator's indemnity

You could also call this:

“Protection from personal liability for company administrators”

If you are an administrator of a company under voluntary administration, you are protected from personal liability for things you do while performing your duties. This protection is called an indemnity. It means that if someone tries to sue you personally for something you did as the administrator, the company’s property will be used to cover any costs or damages. However, this protection doesn’t apply if you acted in bad faith or were negligent in your duties.

The indemnity also covers the payment you are entitled to receive for your work as an administrator. This payment is called remuneration and is set out in section 239O of the Companies Act.

It’s important to note that the money to cover these costs and your payment comes from the company’s property, not from your own pocket.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM321623.

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239ADM: Administrator's right of indemnity has priority over other debts, or

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Part 15A Voluntary administration
Administrator's liability and indemnity for debts of administration

239ADLAdministrator's indemnity

  1. The administrator is indemnified out of the company's property for—

  2. a personal liability incurred in the due performance of his or her duties, but not a personal liability incurred in bad faith or negligently; and
    1. the remuneration to which the administrator is entitled under section 239O.

      Compare
      • Corporations Act 2001 s 443D (Aust)
      Notes
      • Section 239ADL: inserted, on , by section 6 of the Companies Amendment Act 2006 (2006 No 56).