Can I be personally liable for my company's debts as a director?

General information from Lawmateanz

Generally, a company's debts belong to the company, not its directors. But in New Zealand there are important exceptions.

You're personally liable for any debts you've personally guaranteed, which is common with bank loans, leases and supplier accounts.

Under the Companies Act 1993, directors can also be held liable if they breach their duties, for example by trading in a way that creates a substantial risk of serious loss to creditors, or agreeing to obligations the company can't meet. A liquidator can bring these claims.

Directors can also face liability for unpaid tax deductions like PAYE in some situations. If your company is struggling, get advice early from an insolvency practitioner or commercial lawyer.

Written by Lawmateanz, not by a lawyer. General information only, not legal advice about your situation. For advice about your own matter, talk to a lawyer.

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General information only. Answers are written by independent lawyers based only on what's in the question. They aren't legal advice about your situation and don't create a lawyer–client relationship. For advice about your own matter, talk to a lawyer directly.