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New Zealand law explained for everyone

Companies Act 1993

Offences and penalties

386E: Exception for temporary period while application for exemption is made

You could also call this:

“Temporary exception to company involvement ban while seeking court permission”

If you want to be excused from a rule that stops you from being involved with companies after one goes bankrupt, you can ask the court for permission. You need to do this within 5 working days of the company going bankrupt. If you do this, you won’t be breaking the rule for a short time.

This short time starts when the company goes bankrupt. It ends after 6 weeks, or when the court decides to excuse you, whichever happens first.

The rule that stops you from being involved with companies is in section 386A.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM323267.

Topics:
Business > Industry rules
Business > Fair trading
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386D: Exception for person named in successor company notice, or

“You're not liable if named in a notice about a company taking over a failed business”

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386F: Exception in relation to non-dormant phoenix company known by pre-liquidation name of failed company for at least 12 months before liquidation, or

“Exception for active companies using a similar name before another company's failure”

Part 21 Offences and penalties

386EException for temporary period while application for exemption is made

  1. A person does not contravene a prohibition in section 386A for the temporary period set out in subsection (2) if that person applies to the court within 5 working days after the commencement of the liquidation of the failed company for an order exempting that person from the prohibition in question.

  2. The temporary period in subsection (1) is the period beginning on the date of the commencement of the liquidation of the failed company and ending on the earlier of—

  3. the close of 6 weeks after the commencement of liquidation; and
    1. the date on which the court makes an order of exemption.

      Compare
      • Insolvency Rules 1986 rule 4.229 (UK)
      Notes
      • Section 386E: inserted, on , by section 35 of the Companies Amendment Act 2006 (2006 No 56).