As a director can I be personally liable?

Published by Vanessa Crosby on April 05, 2011

Yes! As most people are aware, shareholders and directors may face personal liability for the actions of the company.

Directors however also have responsibilities and may face personal liability under other legislation.

For example:

  1. A director of a company who engages in misleading or deceptive conduct in relation to trade, may face liability for breaches of the Fair Trading Act 1986.
  2. Where any company is convicted of an offence under the Resource Management Act 1991, every director and every person concerned in the management of the company is also guilty of the offence if it is proved that:
    • The Act that constituted the offence took place with his or her authority, permission or consent, and
    • He or she knew, or could reasonably be expected to have known, that the offence was to be or was being committed, and failed to take all reasonable steps to prevent or stop it.
  3. Where a company fails to comply with the Health & Safety & Employment Act 1992, an officer or a director or agent who has participated, authorised or assented to the failure, is liable on conviction to the punishment for the offence.
  4. Under the Tax Administration Act and the GST Act the IRD can pursue directors personally for tax owing by the company pursuant to their sections.

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