Banned directors

What it means to be a banned director

A banned director can't:

• act as a director or promoter of a company, or
• take part in the management of a company (either directly or indirectly).

The length of your ban depends on which section of the Companies Act 1993 you're prohibited under. 

When we ban (prohibit) you from being a director we will:

• record your name on our database of disqualified directors.
  Your details will automatically be removed from the database when your prohibition ends.
• publish your prohibition in the New Zealand Gazette.

We also update our disqualified directors database when we become aware that you have been prohibited by some other means (such as when you’re convicted of a relevant offence)

Why we need bans

Banning (‘prohibiting’) directors removes high-risk people from the commercial arena. It also:

• Provides protection for the public from company directors and managers who have been unscrupulous, incompetent or irresponsible.
• Acts as a deterrent and helps set good standards of behaviour for directors and others involved in the management of a company.

Prohibition of a director can't:

• remedy any wrongs done to a company's shareholders or creditors, or
• result in the recovery of any money lost as a result of that director's actions.

Types of bans

Prohibition following mismanagement

The Registrar of Companies can issue you with a prohibition order if we find that you have mismanaged one or more failed companies.

• You must have been a director or manager of one or more companies that have failed in the previous 5 years — for example, a company that has been placed into voluntary administration, receivership or liquidation.
• We’ll assess whether mismanagement contributed to the failure of the company, or companies.
• You’ll have an opportunity to respond before we make our final decision.

A ban for mismanagement can last for up to a maximum of 10 years.

Our enforcement approach

Prohibition following conviction

You can't be a director if you've been:

• convicted of any offence in connection with the promotion, formation, or management of a company, or
• convicted of a dishonesty offence as defined in the Crimes Act 1961 — for example, theft, fraud, deception, pecuniary advantage.

Your ban lasts for 5 years from the date of your conviction. 

Prohibitions in Australia

You can’t be a director of a company in New Zealand if you are prohibited under Australian law from:

• acting as a director or promoter of a company, or
• taking part in the management of a company (either directly or indirectly).

Penalties for breaching your prohibition order

If you break the terms of your prohibition you can be:

• imprisoned for up to 5 years, or
• fined up to $200,000.

How to report a director

You can use our complaint form:

• if you believe a director has been involved in the mismanagement of a failed company,
• to report a director who has been convicted of a relevant offence under the Companies Act, or
• to report director or manager who is acting for a company while they're disqualified or prohibited.

Related legislation

• Prohibition as a result of a conviction, Companies Act 1993 — section 382
• Prohibition for mismanagement of a failed company, Companies Act 1993 — Section 385
• Dishonesty offences, Crimes Act 1961

Other guides in

Complying with the law

• Keeping company records
• Reporting to the Companies Office
• Company meetings
• How to file an annual return
• Who needs to submit financial statements
• What it means to be a director
• Reporting a director
• What it means to be a shareholder
• How we enforce the law
• Making a complaint

Other help topics