While we aim to make it easy for our customers to comply with their legal obligations, if you don't comply we take action that can sometimes result in prosecution.
Enforcement action we can take
When there is a breach of the law, we can:
- give a formal warning
- issue an infringement notice
- suspend or cancel the registration of a company or an individual
- prohibit or disqualify a director from managing companies.
If a breach is serious we can prosecute the company or an individual. Some breaches of the law carry heavy penalties.
Common breaches that result in prosecution
Most prosecutions arise because:
- 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.
We take action under several acts, including:
- Companies Act 1993
- Financial Reporting Act 2013
- Receivership Act 1993
- some offences under the Crimes Act 1961.
We publish successful convictions. The information includes:
- the name of the person
- the reason they were prosecuted and the section of the Act they breached
- any sentence they received, or fines and costs they must pay.
Directors who fail to meet their obligations
The Registrar of Companies has the power to issue a prohibition order against a company director. The New Zealand Companies Office administers prohibition following mismanagement, and prohibition following conviction.
The length of your ban depends on which section of the Companies Act 1993 you’re prohibited under, up to a maximum of 10 years. If you’re convicted of breaching a prohibition order, you can be imprisoned for up to 5 years or fined up to NZ$200,000.
Penalties for not filing financial statements
Not all companies have to register financial statements.
If your company fails to register audited financial statements, the Companies Office can issue a $7000 fine to each director of the company.
If you suspect illegal activity
If you think a company or its directors have acted illegally, you can report this to us using our online form.