Earlier this year, the government made changes to the Companies Act 1993 to provide company directors with a temporary 'safe harbour' from certain duties if the company was facing liquidity problems because of COVID. 

The safe harbour provision will expire on 30 September 2020. This means company directors will again have duties under sections 135 and 136 of the Companies Act. Under these sections a director must not:

1.   Carry on the business of the company in a manner likely to cause serious loss to company creditors, or

2.   Agree to the company incurring an obligation the company cannot perform.

We recommend that directors start preparing now for when their duties will resume and to talk with us if there are any concerns about complying with these duties.

1   Matapiro Olives (2008) Ltd v Olive Press Ltd [2020] NZHC 1394.