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Crown Entities Act 2004

Crown entity reporting and financial obligations - Other provisions for financial accountability - Acquisition of financial products, borrowing, guarantees, indemnities, and derivatives

163: Restrictions on giving of guarantees and indemnities

You could also call this:

"Crown entities have rules about when they can promise to pay for someone else's debts or mistakes"

Illustration for Crown Entities Act 2004

If you are a Crown entity, you must not give a guarantee to, or indemnify, another person, unless it is allowed under section 160. You can give a guarantee or indemnity to some people, like your employees or members, if you are allowed to under certain laws, such as section 122 of this Act or section 162 of the Companies Act 1993. This rule does not apply to guarantees or indemnities that are automatically part of a transaction allowed under regulations.

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Part 4Crown entity reporting and financial obligations
Other provisions for financial accountability: Acquisition of financial products, borrowing, guarantees, indemnities, and derivatives

163Restrictions on giving of guarantees and indemnities

  1. A Crown entity must not, with or without security, give a guarantee to, or indemnify, another person, or amend the terms of any such guarantee or indemnity, other than as provided in section 160.

  2. This section does not apply if the other person is—

  3. a member, office holder, committee member, employee, or other individual indemnified by the board in relation to any claim or proceeding under—
    1. section 122 of this Act; or
      1. section 162 of the Companies Act 1993; or
        1. the entity's natural person powers or other powers in the entity's Act:
        2. a delegate or agent indemnified by the board under its natural person powers, or the common law, in relation to any claim or proceeding.

          1. This section does not apply to any guarantee or indemnity that is implied at law or arising from any transactions that may be authorised under regulations made under this Part.

          Notes
          • Section 163(1): amended, on , by section 69 of the Crown Entities Amendment Act 2013 (2013 No 51).