Plain language law

New Zealand law explained for everyone

Companies Act 1993

Offences and penalties

376: Defences

You could also call this:

“How directors can defend themselves against charges related to company duties”

If you are a director of a company and you are charged with an offence related to a duty that the board of the company should have done, you can defend yourself in a few ways. You can show that the board did everything they could to follow the law. Or, you can prove that you personally did everything you could to make sure the board followed the law. If neither of those apply, you can also argue that you couldn’t have been expected to do anything more to make the board follow the law.

Similarly, if you are charged with an offence related to something the company should have done, you have similar defences. You can show that the company did everything it could to follow the law. Or, you can prove that you personally did everything you could to make sure the company followed the law. If neither of those apply, you can also argue that you couldn’t have been expected to do anything more to make the company follow the law.

These defences help protect directors who have tried their best to make sure their company follows the law, even if something goes wrong.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM323243.

Topics:

Business > Industry rules

Business > Fair trading

Crime and justice > Criminal law

375: Proceedings for offences, or

“How and when legal proceedings can be started for company-related offences”

377: False statements, or

“Consequences for knowingly providing false or misleading information about a company”

Part 21 Offences and penalties

376Defences

It is a defence to a director charged with an offence in relation to a duty imposed on the board of a company if the director proves that—
the board took all reasonable and proper steps to ensure that the requirements of this Act would be complied with; or
he or she took all reasonable and proper steps to ensure that the board complied with the requirements of this Act; or
in the circumstances he or she could not reasonably have been expected to take steps to ensure that the board complied with the requirements of this Act.

It is a defence to a director charged with an offence in relation to a duty imposed on the company if the director proves that—
the company took all reasonable and proper steps to ensure that the requirements of this Act would be complied with; or
he or she took all reasonable steps to ensure that the company complied with the requirements of this Act; or
in the circumstances he or she could not reasonably have been expected to take steps to ensure that the company complied with the requirements of this Act.