How To Register And Operate A Foreign Company In New Zealand

If you are a company secretary, then your role often involves working closely with the company directors. It’s important to distinguish the rights and responsibilities of a company secretary to ensure your actions are not in breach of the Companies Act 1993. 

A company secretary cannot take on a director’s responsibilities. Their own responsibilities, however, are still vital to a company’s existence. They play a key role in managing the finances of the company, taking notes in directors’ meetings and ensuring the company is compliant in financial areas. 

In this article, we’ll discuss the key differences between a company secretary and director, and whether a company secretary can do things like sign a board resolution. 

Who Can Be A Director?

Directors manage and oversee the operations of the company. 

According to the Companies Act, a director must be someone who is at least 18 years old. Ordinarily, company directors must satisfy the ‘living in New Zealand’ rule. However, if the director resides in Australia and is a director of an Australian company, they can become the director of a New Zealand company without living in New Zealand. 

Directors are high-level members of the company, and as such, they are held to strict codes of conduct. These are known as directors’ duties. 

A director can be voted out by the shareholders of the company if they are not adhering to what is expected of them. 

Who Can Be A Company Secretary?

A company secretary is an officer of the company, and every public company must have one. As a company secretary is not a director, they cannot sign a board resolution. 

The one exception to this is if a person simultaneously holds the title of a company director and the company secretary, in which case they will be permitted to sign a board resolution. 

Ordinarily though, a company secretary does not possess the authority to sign a board resolution. However, their duties often include being involved in board meetings in a different capacity. 

For example, the company secretary might keep the minutes of the directors’ meeting in books. A record of the meeting is then kept and signed by the chairperson of that meeting or the chairperson of the next meeting. 

Aside from their role in directors’ meetings, company secretaries are crucial in ensuring the company is compliant with the Companies Act, along with being up to date with the New Zealand Stock Exchange (NZX). Keep reading to find out more. 

What Is A Board Resolution?

When the board of directors make a decision for the company, it’s considered a board resolution. Once a resolution has been voted on and passed, it will be signed by the presiding director. 

Board resolutions are usually discussed and voted on at meetings. These meetings require a chairperson to be appointed prior to the meeting as they will need to sign the minutes and the resolution. 

There are three main types of resolutions: 

1. Ordinary resolutions
2. Special resolutions
3. Unanimous resolutions

Ordinary Resolutions

Ordinary resolutions need a simple majority vote to pass. They can be related to more routine company matters such as commercial decisions, reelecting directors, general meeting reports, auditing and board limit resolutions. 

Special Resolutions

Special resolutions need a 75% vote to pass. They are typically required for more significant decisions, such as amending the company’s constitution, approving major transactions, or changing the company name. 

Unanimous Resolutions

A unanimous resolution is when there is a 100% vote in agreement. A unanimous resolution is required when no meeting has been held to pass a board resolution. Directors can still make board resolutions without a meeting, however, all directors must agree to it and sign accordingly. 

Where Are Board Meetings Held? 

The board meetings can be held anywhere (as long as the directors agree to it). Additionally, there is no need for meetings to be in person – they can be virtual! A company’s internal documents (such as the company constitution) might have provisions for when, where and how meetings are to be held as well.    

Schedule 3 of the Companies Act also makes it compulsory that directors are notified of the meeting at least 2 days prior to it.  It is also imperative that directors come to a meeting, virtual or not, prepared to discuss the meeting’s agenda. Therefore, any materials that need to be provided beforehand, should be done so.  

Once a director has had a chance to go over the materials, they will be able to bring a valid viewpoint to the meeting rather than just deliberate. Thus, it’s part of a director’s duties to come prepared to board meetings. 

What Are Your Other Duties As A Director?

A director’s duties are defined by the Companies Act. To summarise, a director must: 

• Act in good faith and in the best interests of the company
• Exercise their powers for a proper purpose
• Exercise care, diligence, and skill
• Not use company information for personal gain
• Avoid conflicts of interest

If a director is found to have breached any of their duties, they may be subject to legal penalties such as fines or even imprisonment. 

What Are A Company’s Secretary’s Obligations?

Much like a director, a company secretary is responsible for acting in good faith and in the best interest of the company. 

The duties of company secretaries usually include: 

• Notifying the Companies Office of any changes to the company 
• Advising the company on relevant legislative matters
• Providing information and guidance relating to the NZX
• Keeping company records 
• Liaising with shareholders, stakeholders and directors
• Taking care of key administrative tasks at a high level 

The responsibilities of a modern secretary are often far-reaching and depend on the internal regulations of the company itself- therefore the points above are more of a general guideline as opposed to a definitive list. 

Key Takeaways

A company secretary cannot sign a board resolution if they are not also a director – that is a duty exclusively reserved for company directors. The secretaries of a company do, however, play a key role in the financial and compliance aspects of the business. Their role is of growing importance in today’s era of business. 

If you would like a consultation on your options moving forward, you can reach us at 0800 002 184 or [email protected] for a free, no-obligations chat.

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