What Does Section 180 Of The Companies Act Say?

Section 180 of the New Zealand Companies Act 1993 is the method of contracting rule. It sets out how your company can enter into contracts and deeds. Ordinary contracts can often be signed, agreed orally, or accepted by conduct through an authorised person, while deeds need the more formal signing methods in section 180.

If your real question is who can sign for your company, the practical answer is: check the company's constitution and approvals first, then make sure the person signing has authority and the document is executed in the right way for that type of document.

This matters because a signature block isn't just admin. If the wrong person signs, or a deed is signed like an ordinary contract, your business can end up with uncertainty about whether the company is bound, whether the deed is enforceable, and who personally took on the obligation.

What Does Section 180 Of The Companies Act Say?

In New Zealand, section 180 of the Companies Act 1993 is about how a company contracts. It isn't the Australian director duty of care provision that people sometimes mean when they say section 180. For New Zealand companies, section 180 is about signing and authority.

In practical terms, section 180 separates company obligations into three broad categories:

• Deeds and deed-like obligations: if an individual would need to sign a document as a deed, your company must use one of the formal company execution methods in section 180.
• Written contracts: if the obligation needs to be in writing, your company can generally enter it by writing signed by a person acting under the company's express or implied authority.
• Oral or informal contracts: if the obligation doesn't need to be in writing, your company can generally enter it orally, or through conduct, by someone acting with the company's express or implied authority.

So, when you search for Companies Act section 180, s180 Companies Act, or method of contracting, the key question is usually whether your document is an ordinary contract or a deed, and whether the person signing has the right authority.

A company's Company Constitution can also affect the answer. A constitution may set extra approval rules, specify who can sign, or allow particular people to execute documents on behalf of the company, but deed execution still needs to match section 180. A Shareholders Agreement may also set internal approval thresholds, especially for larger commitments, issuing shares, borrowing, or entering important commercial arrangements.

Who Can Sign For A Company?

There's no single person who automatically signs every document for every company. Who can sign for your business depends on the type of document, your company's internal rules, and the authority given to the person signing.

For ordinary commercial contracts, the person signing might be:

• a director who has board authority to sign;
• a chief executive, general manager, or senior employee with authority for that type of contract;
• an employee with a specific delegation, such as authority to approve supplier contracts up to a set dollar amount;
• an attorney appointed by the company under a valid power of attorney; or
• another person specifically authorised by a board resolution or the company's constitution.

Authority can be express or implied. Express authority is clear permission, such as a directors' resolution saying a named person may sign a particular agreement. Implied authority comes from the person's role and the usual way your business operates. For example, your procurement manager may have implied authority to place routine orders with suppliers, but not to sign a five-year strategic partnership or a security deed.

If you're dealing with another company, don't assume a signature is valid just because the person has a senior-sounding title. For material contracts, it's sensible to ask for evidence of authority, such as a board approval, delegated authority policy, power of attorney, or confirmation from a director.

Also remember that a New Zealand Business Number, or NZBN, helps you identify the entity you're dealing with, but it doesn't prove that the person signing has authority. The Companies Office register can help you check who the directors are, but internal signing authority may still sit in resolutions, delegations, the constitution, or other company documents.

Who Can Sign A Deed On Behalf Of A Company?

Deeds need extra care because they're more formal than ordinary contracts. They're commonly used where the parties want obligations to be binding even without consideration, or where a particular transaction requires deed execution.

For a New Zealand company, section 180 generally allows a deed to be entered into on behalf of the company in writing, signed in the name of the company by:

• two or more directors of the company;
• the sole director, if the company has only one director, provided that director's signature is witnessed;
• a director, or other person or class of persons, if the company's constitution authorises that signing method and the relevant signature or signatures are witnessed; or
• one or more attorneys appointed by the company under section 181.

If your company has two directors, one director signing alone won't usually satisfy the standard two-director deed execution method. A board resolution may approve the transaction internally, but it doesn't replace the external section 180 execution method unless another section 180 method applies, such as a constitution clause authorising that signer with the required witnessing, or an attorney appointed by the company under section 181. That's one of the most common traps for small companies.

New Zealand companies don't generally need to use a common seal to execute documents. If your company still has a common seal and wants to use it, check the constitution and internal approvals first. In most modern small businesses, clear signing authority and correct execution blocks are more important than a seal.

Electronic signing can work for many commercial documents in New Zealand, but you should be more careful with deeds. Your signing process should clearly show identity, intention to sign, consent to electronic signing, any required witnessing, and the final version that was signed. Some document types have special rules or exclusions, so if the deed is important, get the execution process checked before everyone signs.

What Counts As Authority To Contract?

Section 180 is only useful if you connect it with authority. Your company is a separate legal person, but it acts through people. The question is whether the person who said yes, clicked accept, signed the contract, or sent the purchase order had authority to bind the company.

For your own business, it helps to create a simple authority map. This doesn't need to be complicated. It should say who can approve what, and when board approval or shareholder approval is required.

A practical authority map might cover:

• who can sign customer contracts;
• who can approve supplier spend, and up to what amount;
• who can sign employment offers and contractor agreements;
• who can approve IP licences, confidentiality agreements, and technology agreements;
• which contracts need director approval before signing;
• which contracts need shareholder approval under the constitution or shareholders agreement; and
• who keeps the signed copies and approval records.

For the other side of a deal, your due diligence should match the risk. For a low-value routine order, an email from the usual account manager may be enough. For a material deal, you may want a director signature, evidence of board approval, or confirmation that the signatory has delegated authority.

It's also worth training your team not to accidentally bind the company. Contracts can sometimes arise from emails, purchase orders, online terms, signed quotes, verbal acceptance, or conduct. If someone in your team says yes to the wrong thing, you may end up arguing about authority after the fact, which is rarely a good use of your time.

Worked Example: One Director Signs A Supplier Deal And A Deed

Imagine a New Zealand software company, KiwiCloud Limited. It has two directors, Maia and Tom. Maia manages operations day to day, while Tom looks after product strategy. The company is negotiating two documents at the same time.

• Document 1: a supplier services agreement for $48,000 plus GST over 12 months.
• Document 2: an intellectual property assignment deed transferring key software rights to KiwiCloud, valued internally at around $120,000.

For Document 1, the supplier services agreement is an ordinary written contract. If KiwiCloud's board has approved the deal, or Maia has delegated authority to sign supplier contracts up to $50,000, Maia can likely sign it for the company. The clean process is to keep a copy of the delegation or directors' approval with the signed agreement.

For Document 2, the IP assignment is a deed. Because KiwiCloud has two directors, the safer section 180 method is for both Maia and Tom to sign in the company's name. If only Maia signs, KiwiCloud shouldn't assume the deed has been properly executed just because the board approved the transaction. Maia's sole signature would need to fit another section 180 method, such as a constitution clause authorising that signing method with her signature witnessed, or an attorney appointment under section 181. If the deed is signed incorrectly, KiwiCloud may face uncertainty later about whether the transfer worked as intended.

The outcome is practical: Maia can often sign the $48,000 services agreement if her authority is clear, but both directors should sign the $120,000 IP deed unless a valid alternative section 180 signing method applies. Same company, same director, different document type, different signing rule.

This is also where good governance documents help. If your company is bringing in investors, issuing shares, or allocating rights between founders, your approvals need to line up with your constitution and any shareholder arrangements. Depending on the decision, your company may also need proper records around a share issue or other corporate approvals.

Step-By-Step Checklist Before Your Company Signs

Before your company signs a contract or deed, work through this quick checklist. It gives you a paper trail and reduces the chance of signing authority problems later.

1. Identify the exact company: check the legal name, company number, and NZBN if relevant. Make sure the right entity is signing.
2. Classify the document: decide whether it's an ordinary contract, deed, guarantee, power of attorney, IP document, employment document, privacy document, or another specialist document.
3. Check the constitution: confirm any special signing rules, approval thresholds, or limits on director authority. For deeds, check whether any constitution-authorised signer also needs witnessing under section 180.
4. Check shareholder arrangements: see whether shareholders must approve the decision before the company signs.
5. Confirm signatory authority: use a board resolution, delegation policy, power of attorney, or constitution clause where needed. Remember that internal approval isn't always the same as the external execution method.
6. Use the right execution block: don't use an individual signing block for a company, and don't sign a deed as if it were an ordinary contract.
7. Record the approval: keep minutes, written resolutions, or approval emails with the final signed copy.
8. Store the final version: save the fully signed document somewhere secure and easy to find.

A simple signing authority note can also help your team stay consistent. A lawyer should tailor it to your company, but it will usually cover:

1. Purpose: explain when the note applies and which company it covers.
2. Approval thresholds: set dollar limits and categories that need director or shareholder approval.
3. Authorised signatories: list roles or named people who can sign specific document types.
4. Deed execution: state the required section 180 signing method for deeds, including witnessing where a sole director or constitution-authorised signer is used.
5. Record keeping: say where approvals and final signed copies must be stored.
6. Review process: set a date to update the note as your business grows.

If you want to spot broader gaps in your business documents and processes, the Legal Health Check can help you think through the key areas to review.

How Section 180 Fits With Governance And Director Duties

Although section 180 is mainly about methods of contracting, it sits inside a bigger governance picture. Directors still need to make sure the company is acting properly, approving decisions at the right level, and keeping records that show how decisions were made.

In New Zealand, the director duty most closely associated with care, diligence, and skill is in section 137 of the Companies Act 1993. That duty is different from section 180, but the two often meet in practice. If your company signs a major contract without checking authority, financial exposure, conflicts, or required approvals, the issue may become both a contracting problem and a governance problem.

Good governance doesn't mean slowing every decision down. It means matching the process to the risk. For a $500 routine software subscription, a simple delegated approval may be enough. For a $200,000 supplier commitment, a new investor document, a significant IP licence, or a deed that changes core rights, you should expect clearer approvals and better records.

Useful governance habits include:

• using written resolutions for important director decisions, such as a Directors Resolution;
• checking conflicts of interest before approving related-party arrangements;
• recording why the company is entering a material contract;
• reviewing financial impact before taking on significant obligations;
• keeping signed contracts, approvals, and board papers together; and
• updating signing delegations when people join, leave, or change roles.

If you're both a director and a major shareholder, it can feel like it's your business and you can simply decide. Legally, the company is still a separate legal person. Your role as director comes with obligations to the company, and clean approvals help protect both the business and the people running it.

It's also worth remembering that limited liability doesn't mean no liability. Directors can face personal exposure in certain situations, especially where they act outside authority, ignore solvency concerns, or fail to manage key risks. This overview on personal liability explains some of the typical risk areas in plain English.

Key Takeaways

• In New Zealand, section 180 of the Companies Act 1993 is about your company's method of contracting, including how companies sign contracts and deeds.
• Ordinary written contracts can usually be signed by someone with express or implied authority, but deeds need a formal section 180 execution method.
• A deed is commonly signed by two or more directors, by a sole director with their signature witnessed, by a constitution-authorised signer with the relevant signature or signatures witnessed, or by an attorney appointed under section 181.
• A board approval may approve the transaction internally, but it doesn't automatically fix the external execution method for a deed.
• Don't rely on job titles alone. Check the constitution, shareholder arrangements, delegations, board approvals, and the type of document being signed.
• Good signing processes are part of good governance. Keep clear approvals, use the right execution blocks, and store the final signed document with the authority record.

If you'd like help with signing authority, deed execution, directors' resolutions, or your company constitution, you can reach us at 0800 002 184 or team@sprintlaw.co.nz for a free, no-obligations chat.