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January 2017

Hiring a NZ Resident Director

The New Zealand Company Director or New Zealand Resident Director service should not be confused with a Nominee Director service where the director is listed on record but in a nominee status only.

All New Zealand Directors whether resident in New Zealand or stationed overseas are liable to the company and the laws of New Zealand. The difference being that the a New Zealand based director may face punishment(s) a New Zealand court may rule on whereas the overseas director may be able to avoid such punishments since the individual may be living in a country without any enforcement jurisdiction.

For this reason, the New Zealand Resident Director service operates with a high level of diligence and responsibility . This Director, while not actively steering the companies executive management decisions or business model strategy, must still exercise a level of care that assists in keeping the company compliant with the laws and regulations of New Zealand .

Among those requirements are:

1. The keeping of records related to the Shareholders
2. The keeping of records related to the Company Constitution
3. The keeping of records related to Material Changes within the Company
4. The keeping of records related to the Solvency of the Company
5. The keeping of records related to any other item(s) deemed important by the Director
6. Advising owners and management in cases where solvency is questionable
7. Advising owners and management in cases where conflicts of interest are presented
8. Advising owners and management in cases where the Company is not acting in good faith for the Company Shareholder(s)
9. Advising owners and management in cases where information is presented that may lead to concerns by a reasonable person

The above listed requirements set out the framework for how a New Zealand Company Director should act. These guidelines originate from the regulations as contained in The Companies Act 1993. These regulations are:

1. Duty to Act in Good Faith and in the Best Interests of the Company (s131)
2. Duty to Exercise Powers for a Proper Purpose (s133)
3. Duty to Comply with Companies Act 1993 and Company Constitution (s134)
4. Reckless Trading (s135)
5. Duty in relation to Obligations (s136)
6. Director's Duty of Care & Skill (s137)
7. Use of Information and Advice (s138)
8. Director's Interests (ss139-144)
9. Use of Company Information (s.145)

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