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A company director is someone who you appoint to manage your company’s business and affairs. A good director can ensure your company meets its goals and remains profitable in the market. Once appointed in this role, you have fiduciary obligations and responsibilities to fulfil to run your company smoothly and act in its best interests. Some New Zealand companies may have directors that do not reside in New Zealand. This article will outline whether or not you can be a New Zealand director while living in Australia, how to become a director and your duties as a director.

Can You Live in Australia and Be a Director of a New Zealand Company?

If you live in Australia, you can be a director in New Zealand even if you are not a citizen or permanent resident.

In New Zealand, a company must have:

  • at least one director who lives in New Zealand; or
  • a director who lives in Australia and is the director of an incorporated Australian company.

If this company already has a director who fulfils one of the above requirements, you can be a director even if you do not live in New Zealand.

What Constitutes You to Be Living in New Zealand?

To be considered as living in New Zealand, you must have lived in New Zealand for at least 183 days in the last 12 months. Some factors that may be relevant when determining whether you reside in New Zealand are:

  • your connection and ties to New Zealand;
  • how much time you spend in New Zealand;
  • manner of living in New Zealand;
  • your activities in New Zealand and;
  • how you will fulfil your responsibilities of the company you want to be a director in.

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Circumstances Under Which You Cannot be a Director

Although you can be a director of a New Zealand company while living in Australia, there are specific reasons under which you may not be able to become a director in New Zealand (which also applies in respect of New Zealand resident directors).

These reasons are if you are:

  • under 18;
  • bankrupt;
  • someone convicted of a crime involving dishonesty in the last five years;
  • subject to a property order;
  • prohibited from being a director under the law;
  • prohibited by the Registrar of Companies; or
  • legally prohibited from involving yourself with the management of a company of a limited partnership.

Furthermore, there may be additional restrictions in the company’s constitution as to whether you can be a director or not.

How Can You Be Appointed as a Director?

Any natural person can be a director. Under the Companies Act, the shareholders will need to pass a resolution approving the appointment of a director. To appoint a director, you will need to consult the company constitution or shareholders agreement to determine whether you need to meet additional or specific requirements or approvals. In addition, you cannot have a successful appointment unless:

  • you provide written consent to be a director;
  • you have certified that you are not disqualified from being a director of a company

Once you have been appointed as a director, the company will need to update the Companies Register. The company must upload this update within 20 working days of your appointment. 

Your Responsibilities as a Company Director

Once your appointment as a company director is complete, you will have various responsibilities and legal obligations such as:

  • acting in good faith and the company’s best interests;
  • complying with the Companies Act;
  • ensuring that the company can pay its debts and is financially sound;
  • taking reasonable care and skill in your duties;
  • avoiding risks of severe loss to the company’s creditors; and
  • exercising your power as director for a proper purpose.

While executing your general duties as a new director, you must ensure that you fulfil them to the best quality and not dishonestly; otherwise, you may be subject to considerable penalties.

Key Takeaways

You can be a director of a New Zealand company while living in Australia if you are a director of an Australian company. To be appointed as a company director, typically, the shareholders will need to pass an ordinary resolution approving your appointment (subject to any specific requirements in the company’s constitution and shareholders agreement). Once your appointment and registration are successful, you must execute your many responsibilities in good faith and honesty.

If you need help with becoming a director, our experienced business lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 0800 005 570 or visit our membership page.

Frequently Asked Questions

How can I become a director in New Zealand?

To be appointed as a director for a New Zealand company, typically, the shareholders will need to pass an ordinary resolution approving your appointment. You will also need to check the company’s constitution and shareholders agreement for any specific approval requirements. 

Can I be a director even if I live in Australia?

Yes, in most cases, you can be a director of a New Zealand firm while being an Australian citizen or resident, provided you are also a director of an Australian company. So long as you are above 18, not bankrupt, and are not banned from being a director. 

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