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385: Registrar or FMA may prohibit persons from managing companies
or “Registrar or FMA can ban people from managing companies”
You could also call this:

“Registrar or FMA can ban people from managing companies if their previous company was removed”

The Registrar or FMA can stop people from being directors or managers of companies if a company they were involved with was removed from the New Zealand register for specific reasons. They can do this by giving the person a written notice.

This ban can last up to 10 years. The notice must be published in the Gazette, which is a special government publication.

The Registrar or FMA can use this power on someone who was a director or manager of a removed company within the last 5 years. However, the person can argue against this if they can show they weren’t responsible for the company’s removal or if it wouldn’t be fair to ban them.

Before using this power, the Registrar or FMA must give the person at least 10 working days’ notice and consider any arguments the person makes.

If you get one of these notices, you can’t be a director or manager of any company while the notice is in effect. Even if you appeal the notice, it stays in force until a decision is made on your appeal.

The Registrar or FMA can cancel the notice or make exceptions for specific companies. They must publish these changes in the Gazette too.

If you don’t follow the notice, you’re breaking the law and could be punished as set out in section 373(4).

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Next up: 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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Part 21 Offences and penalties

385AAAdditional power for Registrar or FMA to prohibit persons from managing companies

  1. This section applies in relation to a company that has been removed from the New Zealand register on any of the grounds described in section 318(1)(ba), (bb), (bc), or (bd).

  2. The Registrar or the FMA may, by notice in writing given to a person, prohibit that person from being a director or promoter of a company, or being concerned in, or taking part (whether directly or indirectly) in the management of a company, during such period not exceeding 10 years after the date of the notice as is specified in the notice. Every notice must be published in the Gazette.

  3. The power conferred by subsection (2) may be exercised in relation to any person who the Registrar or the FMA is satisfied was, within a period of 5 years before a notice was given to that person under subsection (4) (whether that period commenced before or after the commencement of this section), a director of, or concerned in, or a person who took part in, the management of, a company to which this section applies, unless that person satisfies the Registrar or the FMA—

  4. that the acts or omissions of that person were not wholly or partly responsible for the company being a company to which this section applies; or
    1. that it would not be just or equitable for the power to be exercised.

      1. The Registrar or the FMA must not exercise the power conferred by subsection (2) unless—

      2. not less than 10 working days' notice of the fact that the Registrar or the FMA intends to consider the exercise of it is given to the person; and
        1. the Registrar or the FMA considers any representations made by the person.

          1. No person to whom a notice under subsection (2) applies may be a director or promoter of a company, or be concerned or take part (whether directly or indirectly) in the management of a company.

          2. Where a person to whom the Registrar or the FMA has issued a notice under subsection (2) appeals against the issue of the notice under this Act or otherwise seeks judicial review of the notice, the notice remains in full force and effect pending the determination of the appeal or review, as the case may be.

          3. The Registrar or the FMA may, by notice in writing to a person to whom a notice under subsection (2) has been given,—

          4. revoke that notice; or
            1. exempt that person from the notice in relation to a specified company or companies.

              1. The Registrar or the FMA must publish a notice under subsection (7) in the Gazette.

              2. Every person to whom a notice under subsection (2) is given who fails to comply with the notice commits an offence and is liable on conviction to the penalties set out in section 373(4).

              Notes
              • Section 385AA: inserted, on , by section 55 of the Companies Amendment Act 2014 (2014 No 46).