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New Zealand law explained for everyone

Companies Act 1993

Voluntary administration - Powers of court

239ADV: Prohibition order

You could also call this:

“Court order banning unfit administrators from practising”

The court must make a prohibition order if someone is shown to be unfit to be an administrator or deed administrator because they have failed to do their job properly many times or have made a very serious mistake. The court decides how long this order lasts, and it can be for as long as they think is needed.

If you have a prohibition order against you, you can’t work as an insolvency practitioner. You’ll be treated as if you’re not licensed to do this job. This is explained in section 8 of the Insolvency Practitioners Regulation Act 2019.

The court can make this order for someone who is or was an administrator of a company in administration, or who is or was a deed administrator of a company under a deed of company arrangement. Different people can ask the court to make this order, including the company, a shareholder, a person the company owes money to, the administrator or deed administrator, the Registrar, or anyone else who has a good reason to be involved.

If the court makes a prohibition order, the person who asked for it must give a copy to the Registrar by the end of the next working day. Then, the Registrar must give a copy to each accredited body (as defined in the Insolvency Practitioners Regulation Act 2019) by the end of the next working day after they get 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=DLM321634.

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Part 15A Voluntary administration
Powers of court

239ADVProhibition order

  1. The court must make a prohibition order in relation to a person if it is shown to the satisfaction of the court that that person is unfit to act as administrator or deed administrator by reason of persistent failures to comply or the seriousness of a failure to comply.

  2. The period of the order is a matter for the discretion of the court and the court may make a prohibition period for an indefinite period.

  3. A person to whom a prohibition order applies—

  4. must not act (or continue to act) as an insolvency practitioner; and
    1. must be treated as if they are not a licensed insolvency practitioner (see section 8 of the Insolvency Practitioners Regulation Act 2019).

      1. The court may make an order under this section in relation to a past or current administrator of a company in administration, or a past or current deed administrator of a company under a deed of company arrangement, on the application of—

      2. the company or a shareholder of the company; or
        1. a creditor of the company; or
          1. the administrator or deed administrator of the company; or
            1. the Registrar; or
              1. any other interested person.

                1. A copy of every order made under subsection (1) must be delivered by the applicant to the Registrar before the end of the working day after the day on which the order was made.

                2. The Registrar must provide a copy of the order to each accredited body (within the meaning of the Insolvency Practitioners Regulation Act 2019) before the end of the working day after the day on which the Registrar receives a copy of the order.

                3. Repealed
                Notes
                • Section 239ADV: inserted, on , by section 6 of the Companies Amendment Act 2006 (2006 No 56).
                • Section 239ADV(3): replaced, on , by section 26(1) of the Insolvency Practitioners Regulation (Amendments) Act 2019 (2019 No 28).
                • Section 239ADV(4): amended, on , by section 26(2) of the Insolvency Practitioners Regulation (Amendments) Act 2019 (2019 No 28).
                • Section 239ADV(5): replaced, on , by section 26(3) of the Insolvency Practitioners Regulation (Amendments) Act 2019 (2019 No 28).
                • Section 239ADV(6): replaced, on , by section 26(3) of the Insolvency Practitioners Regulation (Amendments) Act 2019 (2019 No 28).
                • Section 239ADV(7): repealed, on , by section 26(3) of the Insolvency Practitioners Regulation (Amendments) Act 2019 (2019 No 28).