Company Law & Director Duties

​Below is a quick subset of the requirements for complying with the Companies Act. Use the links to the source sites for more detailed / accurate  requirements. 

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Your obligations as a director

As a director you must act honestly, in the best interests of the company, and with reasonable care at all times. Refer to Part 8 of the Companies Act describing:

• who can't be a director

• the various duties of directors

• how directors can exercise their rights and powers

• the minimum standards of behavior expected of directors within their role- includes:

• not allowing, agreeing or causing the business to be carried out in a way likely to create a substantial risk of serious loss to the company's creditors

• ensuring the company can pay all its debts and has more assets than liabilities

• complying with the Companies Act.

What it means to be a shareholder

As a shareholder you:

• aren't responsible for, and don't participate in, the day-to-day management of the company (unless you have authority from the company to do so), and

• have the right to a percentage of any distribution or dividend paid to shareholders, based on how many shares you own.

Registering shareholders

• Every company must register details of its shares and shareholders on its own share register. Those details also appear on the Companies Register.

Shareholders' meetings

• Companies need to hold at least 1 shareholders' meeting once a year. 

• How shareholders meetings are run is set out in Section 124 and Schedule 1 of the Companies Act 1993

Share register

• A company must maintain a share register and keep it for at least 10 years

Keeping company records

All companies in New Zealand need to keep and maintain records about their company and how it's managed. These include company records, such as minutes, as well as financial records and the company's share register

Keep records of:

• banking information

• income and expenses

• PAYE

• cash and wage books

• assets and liabilities

• business plans and agreements

• minute books.

You must keep the following records for 7 years:

• minutes of board and committee meetings

• written communications with shareholders, including emails

• resolutions

• certificates issued by directors

• copies of all financial statements / records

• a record of the assets and liabilities of the company.

Reporting to the Companies Office

• The directors of a company are responsible for keeping information about the company up-to-date on the Companies Register. Information and documents must be up to date, If there are changes to your core company details at any time during the year, you need to notify the Companies Office

• Annual returns are submitted on behalf of the company each year and confirm details about your company — it's not a tax return or a financial statement.

• Financial statements

• Registration of  a financial product or managed investment scheme on the Disclose Register.

Common breaches that result in prosecution

• the company doesn't keep the documents and records they have to

• a director or other person provides false information or makes a false statement to us

• directors fail to provide company records or conceal company records from the liquidator when their company fails

• a director or manager acts for the company while they're disqualified or prohibited

• the company carries on business with the intention to defraud creditors

• a director fraudulently takes or uses company property for their own benefit

• a director acts as a director or manager of a phoenix company.

Information replicated from : New Zealand Companies Office: Companies Register. n.d. Complying with the law. [online] Available at: <https://companies-register.companiesoffice.govt.nz/help-centre/complying-with-the-law/> [Accessed 11 April 2021].