Plain language law

New Zealand law explained for everyone

Companies Act 1993

Offences and penalties

386: Liability for contravening section 385 or section 385AA

You could also call this:

“Consequences for ignoring company director ban notices”

If you don’t follow the rules in a notice given under section 385 or section 385AA, you can get into trouble. You might have to pay for things the company can’t pay for. This includes money the company owes to other people.

If you break these rules, you might have to pay back all the money the company couldn’t pay while you were doing the wrong thing. This could be money owed to the person who is closing down the company (called a liquidator) or to anyone else the company owes money to (called a creditor).

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM323262.

Topics:
Business > Industry rules
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385A: Appeals from FMA's exercise of power under section 385 or section 385AA, or

“Appealing FMA decisions about banning company directors or managers”

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386A: Director of failed company must not be director, etc, of phoenix company with same or substantially similar name, or

“Failed company directors can't lead similarly named businesses for 5 years”

Part 21 Offences and penalties

386Liability for contravening section 385 or section 385AA

  1. A person who acts in contravention of a notice under section 385 or 385AA is personally liable to—

  2. a liquidator of the company for every unpaid debt incurred by the company; and
    1. a creditor of the company for a debt to that creditor incurred by the company—
        1. while that person was so acting.

      Notes
      • Section 386 heading: amended, on , by section 57(1) of the Companies Amendment Act 2014 (2014 No 46).
      • Section 386: amended, on , by section 57(2) of the Companies Amendment Act 2014 (2014 No 46).