Plain language law

New Zealand law explained for everyone

Companies Act 1993

Offences and penalties

382: Persons prohibited from managing companies

You could also call this:

“Who can't manage companies and for how long”

If you are convicted of certain crimes, you can’t manage companies for 5 years after your conviction. These crimes include:

  • Offences related to starting or running a company that could land you in jail for 3 months or more
  • Crimes involving dishonesty
  • Some tax-related offences

During this 5-year period, you can’t be a director or promoter of a company. You also can’t be involved in managing a company in any way, directly or indirectly.

If you want to manage a company during this time, you need to ask the court for permission. The court might give you permission with certain conditions.

If you want to ask the court for permission, you need to tell the Registrar at least 10 days before you ask. The Registrar and other people the court thinks should be there can come to the hearing when you ask for permission.

If you break these rules or any orders the court makes, you’re committing an offence. You could be punished as set out in section 373(4).

These rules apply to overseas companies doing business in New Zealand too.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM323249.

Topics:
Business > Industry rules
Business > Starting a business
Crime and justice > Criminal law
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“Misusing 'Limited' in a business name when not a limited liability company is illegal”

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“Court can ban people from being company directors for misconduct”

Part 21 Offences and penalties

382Persons prohibited from managing companies

  1. Where—

  2. a person has been convicted of an offence in connection with the promotion, formation, or management of a company (being an offence that is punishable by a term of imprisonment of not less than 3 months), including an offence under section 138A; or
    1. a person has been convicted of an offence under any of sections 377 to 380 or of any crime involving dishonesty as defined in section 2(1) of the Crimes Act 1961; or
      1. a person has been convicted of an offence under section 143A(1)(d) or 143B(1) of the Tax Administration Act 1994; or
        1. a person has been convicted of an offence under section 148 of the Tax Administration Act 1994 of aiding, abetting, inciting, or conspiring with another person to commit an offence against section 143B(1) of that Act,—
              1. that person shall not, during the period of 5 years after the conviction or the judgment, be a director or promoter of, or in any way, whether directly or indirectly, be concerned or take part in the management of, a company, unless that person first obtains the leave of the court which may be given on such terms and conditions as the court thinks fit.

            1. A person intending to apply for the leave of the court under this section shall give to the Registrar not less than 10 days' notice of that person's intention to apply.

            2. The Registrar, and such other persons as the court thinks fit, may attend and be heard at the hearing of any application under this section.

            3. A person who acts in contravention of this section, or of any order made under this section, commits an offence and is liable on conviction to the penalty set out in section 373(4).

            4. In this section, the term company includes an overseas company that carries on business in New Zealand.

            Notes
            • Section 382(1)(a): replaced, on , by section 53 of the Companies Amendment Act 2014 (2014 No 46).
            • Section 382(1)(a): amended, on , by section 9(1) of the Regulatory Systems (Economic Development) Amendment Act 2019 (2019 No 62).
            • Section 382(1)(b): amended, on , by section 9(2) of the Regulatory Systems (Economic Development) Amendment Act 2019 (2019 No 62).
            • Section 382(1)(ba): inserted, on , by section 9(3) of the Regulatory Systems (Economic Development) Amendment Act 2019 (2019 No 62).
            • Section 382(1)(bb): inserted, on , by section 9(3) of the Regulatory Systems (Economic Development) Amendment Act 2019 (2019 No 62).
            • Section 382(1)(c): repealed, on , by section 25 of the Securities Amendment Act 2006 (2006 No 46).