New Zealand Companies Act 1993 - Stock Exchange

New Zealand New Zealand Companies Act 1993 New Zealand Companies Act 1993 New Zealand Companies Act 1993

65 Stock exchange acquisitions not subject to prior notice to shareholders

  • (1) The board of a company may acquire shares on a stock exchange from its shareholders if the following conditions are satisfied:

    • (a) that, prior to the acquisition, the board of the company has resolved—

      • (i) that the acquisition in question is in the best interests of the company and the shareholders; and

      • (ii) that the terms of and consideration for the acquisition are fair and reasonable to the company; and

      • (iii) that it is not aware of any information that is not available to shareholders—

        • (A) that is material to an assessment of the value of the shares; and

        • (B) as a result of which the terms of and consideration for the acquisition are unfair to shareholders from whom any shares are acquired; and

    • (b) that the number of shares acquired together with any other shares acquired under this section in the preceding 12 months does not exceed 5% of the shares in the same class as at the date 12 months prior to the acquisition of the shares.

    (2) Within 10 working days after the shares are acquired, the company must send to each stock exchange on which the shares of the company are listed a notice containing the following particulars:

    • (a) the class of shares acquired:

    • (b) the number of shares acquired:

    • (c) the consideration paid or payable for the shares acquired:

    • (d) if known to the company, the identity of the seller and, if the seller was not the beneficial owner, the beneficial owner.

    (2A) [Repealed]

    (2B) Acquisitions may be made under subsection (1) by any director or employee of the company who is authorised to do so by the resolution of the board under that subsection.

    (3) If a company fails to comply with subsection (2),—

    • (a) the company commits an offence and is liable on conviction to the penalty set out in section 373(1); and

    • (b) every director of the company commits an offence and is liable on conviction to the penalty set out in section 374(1).

    Section 65(2): replaced, on 1 July 1994, by section 11(1) of the Companies Act 1993 Amendment Act 1994 (1994 No 6).

    Section 65(2A): repealed, on 31 August 2012, by section 4(1) of the Companies Amendment Act (No 2) 2012 (2012 No 60).

    Section 65(2B): inserted, on 1 July 1994, by section 11(1) of the Companies Act 1993 Amendment Act 1994 (1994 No 6).

    Section 65(3): amended, on 31 August 2012, by section 4(2) of the Companies Amendment Act (No 2) 2012 (2012 No 60).

66 Cancellation of shares repurchased

  • (1) Subject to sections 67A to 67C, shares that are acquired by a company pursuant to section 59 or sections 112 to 112C are deemed to be cancelled immediately on acquisition.

    (2) Shares are acquired for the purposes of subsection (1) on the date on which the company would, apart from this section, become entitled to exercise the rights attached to the shares.

    (3) On the cancellation of a share under this section,—

    • (a) the rights and privileges attached to that share expire; but

    • (b) the share may be reissued in accordance with this Part.

    Section 66(1): replaced, on 1 July 1994, by section 2 of the Companies Act 1993 Amendment Act (No 2) 1994 (1994 No 82).

    Section 66(1): amended, on 17 September 2008, by section 5 of the Companies (Minority Buy-out Rights) Amendment Act 2008 (2008 No 69).

67 Enforceability of contract to repurchase shares

  • (1) A contract with a company providing for the acquisition by the company of its shares is specifically enforceable against the company except to the extent that the company would, by performance, be unable to satisfy the solvency test in accordance with secton 52.

    (2) The company has the burden of proving that performance of the contract would result in the company being unable to satisfy the solvency test in accordance with section 52.

    (3) Until the company has fully performed a contract referred to in subsection (1), the other party to the contract retains the status of a claimant entitled to be paid as soon as the company is lawfully able to do so or, prior to the removal of the company from the New Zealand register, to be ranked subordinate to the rights of creditors but in priority to the other shareholders.

Treasury stock

  • Heading: inserted, on 1 July 1994, by section 3 of the Companies Act 1993 Amendment Act (No 2) 1994 (1994 No 82).

67A Company may hold its own shares

  • (1) Shares acquired by a company pursuant to section 59 or sections 112 to 112C shall not be deemed to be cancelled under section 66(1) if—

    • (a) the constitution of the company expressly permits the company to hold its own shares; and

    • (b) the board of the company resolves that the shares concerned shall not be cancelled on acquisition; and

    • (c) the number of shares acquired, when aggregated with shares of the same class held by the company pursuant to this section at the time of the acquisition, does not exceed 5% of the shares of that class previously issued by the company, excluding shares previously deemed to be cancelled under section 66(1).

    (2) Shares acquired by a company pursuant to section 59 or sections 112 to 112C that, pursuant to this section, are not deemed to be cancelled shall be held by the company in itself.

    (3) A share that a company holds in itself under subsection (2) may be cancelled by the board of the company resolving that the share is cancelled; and the share shall be deemed to be cancelled on the making of such a resolution.

    Section 67A: inserted, on 1 July 1994, by section 3 of the Companies Act 1993 Amendment Act (No 2) 1994 (1994 No 82).

    Section 67A(1): amended, on 17 September 2008, by section 6 of the Companies (Minority Buy-out Rights) Amendment Act 2008 (2008 No 69).

    Section 67A(2): amended, on 17 September 2008, by section 6 of the Companies (Minority Buy-out Rights) Amendment Act 2008 (2008 No 69).

67B Rights and obligations of shares company holds in itself suspended

  • (1) The rights and obligations attaching to a share that a company holds in itself pursuant to section 67A shall not be exercised by or against a company while it holds the share.

    (2) Without limiting subsection (1), while a company holds a share in itself pursuant to section 67A, the company shall not—

    • (a) exercise any voting rights attaching to the share; or

    • (b) make or receive any distribution authorised or payable in respect of the share.

    Section 67B: inserted, on 1 July 1994, by section 3 of the Companies Act 1993 Amendment Act (No 2) 1994 (1994 No 82).

67C Reissue of shares company holds in itself

  • (1) Subject to subsection (2), section 47 shall apply to the transfer of a share held by a company in itself as if the transfer were the issue of the share under section 42 or section 44.

    (2) Section 47(2) shall not apply to the transfer of a share held by a company in itself if the share is transferred by means of a system that is approved under section 7 of the Securities Transfer Act 1991.

    (3) Subject to subsection (1), the transfer of a share by a company in itself shall not be subject to any provisions in this Act or the company's constitution relating to the issue of shares, except to the extent the company's constitution expressly applies those provisions.

    (4) A company shall not grant an option to acquire a share it holds in itself or enter into any obligations to transfer such a share where the company has received notice in writing of a takeover offer made under the takeovers code in force under the Takeovers Act 1993 or, in the case of a company that is a party to a listing agreement with a stock exchange, where the exchange makes a public release to the sharemarket that a takeover offer for more than 20% of the company's shares is to be made.

    Section 67C: inserted, on 1 July 1994, by section 3 of the Companies Act 1993 Amendment Act (No 2) 1994 (1994 No 82).

    Section 67C(4): amended, on 25 October 2006, by section 30(1) of the Takeovers Amendment Act 2006 (2006 No 48).

Redemption of shares

68 Meaning of redeemable

  • For the purposes of this Act, a share is redeemable if—

    • (a) the constitution of the company makes provision for the company to issue redeemable shares; and

    • (b) the constitution or the terms of issue of the share makes provision for the redemption of that share by the company—

      • (i) at the option of the company; or

      • (ii) at the option of the holder of the share; or

      • (iii) on a date specified in the constitution or the terms of issue of the share—

      for a consideration that is—

      • (iv) specified; or

      • (v) to be calculated by reference to a formula; or

      • (vi) required to be fixed by a suitably qualified person who is not associated with or interested in the company.

    Section 68: replaced, on 3 June 1998, by section 2 of the Companies Amendment Act 1998 (1998 No 31).

69 Redemption at option of company

  • (1) A company must not exercise an option to redeem shares unless—

    • (a) the option is exercised in relation to all shareholders of the same class and in a manner that will leave unaffected relative voting and distribution rights; or

    • (b) the option is exercised in relation to 1 or more shareholders and—

      • (i) all shareholders have consented in writing; or

      • (ii) the option is expressly permitted by the constitution and is exercised in accordance with the procedure set out in section 71.

    (2) A company must not exercise an option to redeem shares unless, before the exercise of the option, the board of the company has resolved—

    • (a) that the redemption of the shares is in the best interests of the company; and

    • (b) the consideration for the redemption of the shares is fair and reasonable to the company.

    (3) The resolution must set out in full the grounds for the director's conclusions.

    (4) The directors who vote in favour of a resolution required by subsection (2) must sign a certificate as to the matters set out in that subsection and may combine it with the certificate required by section 70 and any certificate required by section 71.

    (5) A company must not exercise an option to redeem shares under subsection (1) if, after the passing of a resolution under that subsection and before the exercise of the option to redeem the shares, the board ceases to be satisfied that—

    • (a) the redemption of the shares is in the best interests of the company; or

    • (b) the consideration for the exercise of the option is fair and reasonable to the company.

    (6) Every director who fails to comply with subsection (4) commits an offence and is liable on conviction to the penalty set out in section 373(1).

70 Company must satisfy solvency test

  • (1) A company must not exercise an option to redeem a share unless the board of the company is satisfied on reasonable grounds that the company will, immediately after the share is redeemed, satisfy the solvency test in accordance with section 52.

    (2) The directors who vote in favour of exercising the option must sign a certificate stating that, in their opinion, the company will, immediately after the share is redeemed, satisfy the solvency test and the grounds for that opinion.

    (3) If, after a resolution is passed under subsection (1) and before the option is exercised, the board ceases to be satisfied on reasonable grounds that the company will, immediately after the share is redeemed, satisfy the solvency test in accordance with section 52, any redemption of the share is deemed not to have been authorised for the purpose of that section.

    (4) Every director who fails to comply with subsection (2) commits an offence and is liable on conviction to the penalty set out in section 373(1).

    (5) The provisions of section 56 apply in relation to the redemption of a share at the option of the company with such modifications as may be necessary.

71 Special redemption of shares

  • (1) A company may exercise an option to redeem shares under section 69(1)(b)(ii) only if the board has previously resolved—

    • (a) that the redemption of the shares is of benefit to the remaining shareholders; and

    • (b) that the consideration for the redemption of the shares is fair and reasonable to the remaining shareholders.

    (2) The resolution must set out in full the grounds for the directors' conclusions.

    (3) The directors who vote in favour of a resolution required by subsection (1) must sign a certificate as to the matters set out in that subsection.

    (4) A company must not exercise an option to redeem shares under section 69(1)(b)(ii) if, after the passing of a resolution under subsection (1) and before the option is exercised, the board ceases to be satisfied that—

    • (a) the redemption of the shares is of benefit to the remaining shareholders; or

    • (b) the consideration for the redemption of the shares is fair and reasonable to the remaining shareholders.

    (5) Before the option is exercised pursuant to a resolution under subsection (1), the company must send to each shareholder a disclosure document that complies with section 72.

    (6) The option must be exercised not less than 10 and not more than 30 working days after the disclosure document has been sent to each shareholder.

    (7) A shareholder or the company may apply to the court for an order restraining the proposed exercise of the option on the grounds that—

    • (a) it is not in the best interests of the company or of benefit to remaining shareholders; or

    • (b) the consideration for the redemption is not fair or reasonable to the company or remaining shareholders.

    (8) Every director who fails to comply with subsection (3) commits an offence and is liable on conviction to the penalty set out in section 373(1).

    (9) If a company fails to comply with subsection (5),—

    • (a) the company commits an offence and is liable on conviction to the penalty set out in section 373(1); and

    • (b) every director of the company commits an offence and is liable on conviction to the penalty set out in section 374(1).

72 Disclosure document

  • For the purposes of section 71, a disclosure document is a document that sets out—

    • (a) the nature and terms of the redemption of the shares, and if the option to redeem the shares is to be exercised in relation to specified shareholders, the names of those shareholders; and

    • (b) the text of the resolution required by section 71, together with such further information and explanation as may be necessary to enable a reasonable shareholder to understand the nature and implications for the company and its shareholders of the proposed redemption.

73 Cancellation of shares redeemed

  • (1) Shares that are redeemed by a company pursuant to section 69 are deemed to be cancelled immediately on redemption.

    (2) On the cancellation of a share under this section,—

    • (a) the rights and privileges attached to that share expire; but

    • (b) the share may be reissued in accordance with this Part.

74 Redemption at option of shareholder

  • (1) Subject to this section, if a share is redeemable at the option of the holder of the share, and the holder gives proper notice to the company requiring the company to redeem the share,—

    • (a) the company must redeem the share on the date specified in the notice, or if no date is specified, on the date of receipt of the notice; and

    • (b) the share is deemed to be cancelled on the date of redemption; and

    • (c) from the date of redemption the former shareholder ranks as an unsecured creditor of the company for the consideration payable on redemption.

    (2) A redemption under this section—

    • (a) is not a distribution for the purposes of sections 52 and 53; but

    • (b) is deemed to be a distribution for the purposes of subsections (1) and (5) of section 56.

    Section 74(1)(c): amended, on 15  April 2004, by section 4 of the Companies Amendment Act (No 2) 2004 (2004 No 24).

75 Redemption on fixed date

  • (1) Subject to this section, if a share is redeemable on a specified date—

    • (a) the company must redeem the share on that date; and

    • (b) the share is deemed to be cancelled on that date; and

    • (c) from that date the former shareholder ranks as an unsecured creditor of the company for the consideration payable on redemption.

    (2) A redemption under this section—

    • (a) is not a distribution for the purposes of sections 52 and 53; but

    • (b) is deemed to be a distribution for the purposes of subsections (1) and (5) of section 56.

    Section 75(1)(c): amended, on 30 June 1997, by section 5 of the Companies Act 1993 Amendment Act 1997 (1997 No 27).

Assistance by a company in the purchase of its own shares

76 Financial assistance

  • (1) A company may give financial assistance to a person for the purpose of, or in connection with, the purchase of a share issued or to be issued by the company, or by its holding company, whether directly or indirectly, only if the financial assistance is given in accordance with subsection (2); and—

    • (a) all shareholders have consented in writing to the giving of the assistance; or

    • (b) the procedure set out in section 78 is followed; or

    • (c) the financial assistance is given in accordance with section 80.

    (2) A company may give financial assistance under subsection (1) if the board has previously resolved that—

    • (a) the company should provide the assistance; and

    • (b) giving the assistance is in the best interests of the company; and

    • (c) the terms and conditions under which the assistance is given are fair and reasonable to the company.

    (3) The resolution must set out in full the grounds for the directors' conclusions.

    (4) The directors who vote in favour of a resolution under subsection (2) must sign a certificate as to the matters set out in that subsection and may combine that certificate with the certificate required under section 77 and any certificate required under section 78.

    (5) A company must not give financial assistance under subsection (1) if, after the passing of a resolution under subsection (2) and before the assistance is given, the board ceases to be satisfied that—

    • (a) the giving of the assistance is in the best interests of the company; or

    • (b) the terms and conditions under which the assistance is proposed are fair and reasonable to the company.

    (6) For the purposes of this section, financial assistance includes a loan, a guarantee, and the provision of a security.

    (7) Every director who fails to comply with subsection (4) commits an offence and is liable on conviction to the penalty set out in section 373(1).

77 Company must satisfy solvency test

  • (1) A company must not give any financial assistance under section 76 unless the board of the company is satisfied on reasonable grounds that the company will, immediately after the giving of the financial assistance, satisfy the solvency test.

    (2) The directors who vote in favour of the giving of the financial assistance must sign a certificate stating that, in their opinion, the company will, immediately after the financial assistance is given, satisfy the solvency test and the grounds for that opinion.

    (3) If, after a resolution is passed under subsection (1) and before the financial assistance is given, the board ceases to be satisfied on reasonable grounds that the company will, immediately after the financial assistance is given, satisfy the solvency test, any financial assistance given by the company is deemed not to have been authorised.

    (4) Every director of a company who fails to comply with subsection (2) commits an offence and is liable on conviction to the penalty set out in section 373(1).

    (5) The provisions of section 56 apply in relation to the giving of financial assistance by a company with such modifications as may be necessary.

    (6) In applying the solvency test for the purposes of this section,—

    >assets excludes amounts of financial assistance given by the company at any time under section 76 or section 107(1)(e) in the form of loans; and

    liabilities includes the face value of all outstanding liabilities, whether contingent or otherwise, incurred by the company at any time in connection with the giving of financial assistance under section 76 or 107(1)(e).

    (7) Nothing in subsection (6) limits or affects the application of section 4(4).

    Section 77(4): amended, on 1 July 2013, by section 413 of the Criminal Procedure Act 2011 (2011 No 81).

    Section 77(6): replaced, on 1 July 1994, by section 12 of the Companies Act 1993 Amendment Act 1994 (1994 No 6).

    Section 77(6) assets: amended, on 15 April 2004, by section 5(a) of the Companies Amendment Act (No 2) 2004 (2004 No 24).

    Section 77(6) liabilities: amended, on 15 April 2004, by section 5(b) of the Companies Amendment Act (No 2) 2004 (2004 No 24).

    Section 77(7): inserted, on 1 July 1994, by section 12 of the Companies Act 1993 Amendment Act 1994 (1994 No 6).

78 Special financial assistance

  • (1) Financial assistance may be given under section 76(1)(b) only if the board has previously resolved—

    • (a) that giving the assistance in question is of benefit to those shareholders not receiving the assistance; and

    • (b) that the terms and conditions under which the assistance is given are fair and reasonable to those shareholders not receiving the assistance.

    (2) The resolution must set out in full the reasons for the directors' conclusions.

    (3) The directors who vote in favour of a resolution required by subsection (1) must sign a certificate as to the matters set out in that subsection.

    (4) A company must not give financial assistance under section 76(1)(b) if, after the passing of a resolution under subsection (1) and before the financial assistance is given, the board ceases to be satisfied that—

    • (a) the giving of the financial assistance is of benefit to those shareholders not receiving the assistance; or

    • (b) the terms and conditions under which the assistance is given are fair and reasonable to those shareholders not receiving it.

    (5) Before the financial assistance is given under section 76(1)(b), the company must send to each shareholder a disclosure document that complies with section 79.

    (6) The assistance may be given not less than 10 working days and not more than 12 months after the disclosure document has been sent to each shareholder.

    (7) A shareholder or the company may apply to the court for an order restraining the proposed assistance being given on the ground that—

    • (a) it is not in the best interests of the company and of benefit to those shareholders not receiving the assistance; or

    • (b) the terms and conditions under which the assistance is to be given are not fair and reasonable to the company and to those shareholders not receiving the assistance.

    (8) Every director who fails to comply with subsection (3) commits an offence and is liable on conviction to the penalty set out in section 373(1).

    (9) If a company fails to comply with subsection (5),—

    • (a) the company commits an offence and is liable on conviction to the penalty set out in section 373(1); and

    • (b) every director of the company commits an offence and is liable on conviction to the penalty set out in section 374(1).

79 Disclosure document

  • For the purposes of section 78, a disclosure document is a document that sets out—

    • (a) the nature and terms of the financial assistance to be given, and to whom it will be given; and

    • (b) if the financial assistance is to be given to a nominee for another person, the name of that other person; and

    • (c) the text of the resolution required by section 78(1), together with such further information and explanation as may be necessary to enable a reasonable shareholder to understand the nature and implications for the company and its shareholders of the proposed transaction.

80 Financial assistance not exceeding 5% of shareholders' funds

  • (1) Financial assistance may be given under section 76(1)(c), only if—

    • (a) the amount of the financial assistance, together with any other financial assistance given by the company pursuant to this paragraph, repayment of which remains outstanding, would not exceed 5% of the aggregate of amounts received by the company in respect of the issue of shares and reserves as disclosed in the most recent financial statements of the company that comply with section 10 of the Financial Reporting Act 1993, and the company receives fair value in connection with the assistance; and

    • (b) within 10 working days of providing the financial assistance, the company sends to each shareholder a notice containing the following particulars:

      • (i) the class and number of shares in respect of which the financial assistance has been provided:

      • (ii) the consideration paid or payable for the shares in respect of which the financial assistance has been provided:

      • (iii) the identity of the person receiving the financial assistance and, if that person is not the beneficial owner of the shares in respect of which the financial assistance has been provided, the identity of that beneficial owner:

      • (iv) the nature and, if quantifiable, the amount of the financial assistance.

    (2) If a company fails to comply with subsection (1)(b),—

    • (a) the company commits an offence and is liable on conviction to the penalty set out in section 373(1); and

    • (b) every director of the company commits an offence and is liable on conviction to the penalty set out in section 374(1).

81 Enforceability of transactions

  • (1) Failure to comply with section 76 or section 78 or section 79 or section 80 does not affect the validity of a transaction.

    (2) This section does not affect a liability of a director or any other person for breach of a duty, or as a constructive trustee, or otherwise.

Cross-holdings

82 Subsidiary may not hold shares in holding company

  • (1) Subject to this section, a subsidiary must not hold shares in its holding company.

    (2) An issue of shares by a holding company to its subsidiary is void and of no effect.

    (3) A transfer of shares in a holding company to its subsidiary is void and of no effect.

    (4) Where a company that holds shares in another company becomes a subsidiary of that other company—

    • (a) the company may, notwithstanding subsection (1), continue to hold those shares; but

    • (b) the exercise of any voting rights attaching to those shares shall be of no effect.

    (5) Where a company on reregistration under this Act in accordance with the Companies Reregistration Act 1993 held shares in another company and was a subsidiary of that other company,—

    • (a) the company may, notwithstanding subsection (1), continue to hold those shares; but

    • (b) the exercise of any voting rights attaching to those shares shall be of no effect.

    (6) Nothing in this section prevents a subsidiary holding shares in its holding company in its capacity as a personal representative or a trustee unless the holding company or another subsidiary has a beneficial interest under the trust other than an interest that arises by way of security for the purposes of a transaction made in the ordinary course of the business of lending money.

    (7) This section applies to a nominee for a subsidiary in the same way as it applies to the subsidiary.

Statement of shareholder rights

83 Statement of rights to be given to shareholders

  • (1) Every company must issue to a shareholder, on request, a statement that sets out—

    • (a) the class of shares held by the shareholder, the total number of shares of that class issued by the company, and the number of shares of that class held by the shareholder; and

    • (b) the rights, privileges, conditions, and limitations, including restrictions on transfer, attaching to the shares held by the shareholder; and

    • (c) the relationship of the shares held by the shareholder to other classes of shares.

    (2) The company is not obliged to provide a shareholder with a statement if—

    • (a) a statement has been provided within the previous 6 months; and

    • (b) the shareholder has not acquired or disposed of shares since the previous statement was provided; and

    • (c) the rights attached to shares of the company have not been altered since the previous statement was provided; and

    • (d) there are special circumstances that make it reasonable for the company to refuse the request.

    (3) The statement is not evidence of title to the shares or of any of the matters set out in it.

    (4) The statement must state in a prominent place that it is not evidence of title to the shares or of the matters set out in it.

    (5) If a company fails to comply with subsection (1),—

    • (a) the company commits an offence and is liable on conviction to the penalty set out in section 373(1); and

    • (b) every director of the company commits an offence and is liable on conviction to the penalties set out in section 374(1).

    Section 83(2)(d): replaced, on 30 June 1997, by section 6 of the Companies Act 1993 Amendment Act 1997 (1997 No 27).

Transfer of shares

84 Transfer of shares

  • (1) Subject to the constitution of the company, shares in a company may be transferred by entry of the name of the transferee on the share register.

    (2) For the purpose of transferring shares, a form of transfer signed by the present holder of the shares or by his or her personal representative must be delivered to—

    • (a) the company; or

    • (b) an agent of the company who maintains the share register under section 87(3).

    (3) The form of transfer must be signed by the transferee if registration as holder of the shares imposes a liability to the company on the transferee.

    (4) On receipt of a form of transfer in accordance with subsection (2) and, if applicable, subsection (3), the company must forthwith enter or cause to be entered the name of the transferee on the share register as holder of the shares, unless—

    • (a) the board resolves within 30 working days of receipt of the transfer to refuse or delay the registration of the transfer, and the resolution sets out in full the reasons for doing so; and

    • (b) notice of the resolution, including those reasons, is sent to the transferor and to the transferee within 5 working days of the resolution being passed by the board; and

    • (c) the Act or the constitution expressly permits the board to refuse or delay registration for the reasons stated.

    (5) Subject to the constitution of a company, the board may refuse or delay the registration of a transfer of shares if the holder of the shares has failed to pay to the company an amount due in respect of those shares, whether by way of consideration for the issue of the shares or in respect of sums payable by the holder of the shares in accordance with the constitution.

    (6) If a company fails to comply with subsection (4),—

    • (a) the company commits an offence and is liable on conviction to the penalty set out in section 373(1); and

    • (b) every director of the company commits an offence and is liable on conviction to the penalty set out in section 374(1).

85 Transfer of shares under approved system

  • (1) Where shares in a company are transferred under a system of transfer approved under section 7 of the Securities Transfer Act 1991, the company may refuse to complete or delay the registration of the transfer of the shares if—

    • (a) the board resolves, within 30 working days of such date as may be specified for the purpose in the Order in Council approving the system, to refuse or delay registration of the transfer, and the resolution sets out in full the reasons for doing so; and

    • (b) notice of the resolution, including those reasons, is sent to the transferor and to the transferee within 5 working days of the resolution being passed by the board; and

    • (c) either—

      • (i) the Act or the constitution expressly permits the board to refuse or delay registration for the reasons stated; or

      • (ii) any identification number assigned to the shares or issued to the holder of the shares under a system of transfer approved under section 7 of the Securities Transfer Act 1991 is not recorded on the form of transfer of the shares or otherwise communicated in writing to the company by or on behalf of the transferor.

    (1A) If shares in a company are transferred in accordance with the rules of a designated settlement system, the company may refuse to complete or delay the registration of the transfer of the shares if—

    • (a) the board of the company resolves, within 30 working days of the date on which the settlement was effected, to refuse or delay registration of the transfer, and the resolution sets out in full the reasons for doing so; and

    • (b) notice of the resolution, including those reasons, is sent to the transferor and to the transferee within 5 working days of the resolution being passed by the board; and

    • (c) this Act or the constitution of the company expressly permits the board to refuse or delay registration for the reasons stated.

    (2) Subject to subsections (1) and (1A), if a company fails to enter or cause to be entered the name of the transferee on the share register on a transfer of shares effected in accordance with the rules of a designated settlement system, or under a system approved under section 7 of the Securities Transfer Act 1991,—

    • (a) the company commits an offence and is liable on conviction to the penalty set out in section 373(1); and

    • (b) every director of the company commits an offence and is liable on conviction to the penalty set out in section 374(1).

    Section 85(1)(c): replaced, on 3 May 2001, by section 5 of the Companies Act 1993 Amendment Act 2001 (2001 No 18).

    Section 85(1A): inserted, on 24 November 2009, by section 17(1) of the Reserve Bank of New Zealand Amendment Act 2009 (2009 No 53).

    Section 85(2): amended, on 24 November 2009, by section 17(2)(a) of the Reserve Bank of New Zealand Amendment Act 2009 (2009 No 53).

    Section 85(2): amended, on 24 November 2009, by section 17(2)(b) of the Reserve Bank of New Zealand Amendment Act 2009 (2009 No 53).

86 Transfer of shares by operation of law

  • Shares in a company may pass by operation of law notwithstanding the constitution of the company.

Share register

87 Company to maintain share register

  • (1) A company must maintain a share register that records the shares issued by the company and states—

    • (a) whether, under the constitution of the company or the terms of issue of the shares, there are any restrictions or limitations on their transfer; and

    • (b) where any document that contains the restrictions or limitations may be inspected.

    (2) The share register must state, with respect to each class of shares,—

    • (a) the names, alphabetically arranged, and the latest known address of each person who is, or has within the last 10 years been, a shareholder; and

    • (b) the number of shares of that class held by each shareholder within the last 10 years; and

    • (c) the date of any—

      • (i) issue of shares to; or

      • (ii) repurchase or redemption of shares from; or

      • (iii) transfer of shares by or to—

      each shareholder within the last 10 years, and in relation to the transfer, the name of the person to or from whom the shares were transferred.

    (3) An agent may maintain the share register of the company.

    (4) If a company fails to comply with subsection (1) or subsection (2),—

    • (a) the company commits an offence and is liable on conviction to the penalty set out in section 373(2); and

    • (b) every director of the company commits an offence and is liable on conviction to the penalty set out in section 374(2).

88 Place of share register

  • (1) The share register may, if expressly permitted by the constitution, be divided into 2 or more registers kept in different places.

    (2) The principal register must be kept in New Zealand.

    (3) If a share register is divided into 2 or more registers kept in different places,—

    • (a) notice of the place where each register is kept must be delivered to the Registrar for registration within 10 working days after the share register is divided or any place where a register is kept is altered; and

    • (b) a copy of every register must be kept at the same place as the principal register; and

    • (c) if an entry is made in a register other than the principal register, a corresponding entry must be made within 10 working days in the copy of that register kept with the principal register.

    (4) In this section, principal register, in relation to a company, means—

    • (a) if the share register is not divided into 2 or more registers, the share register:

    • (b) if the share register is divided into 2 or more registers, the register described as the principal register in the last notice sent to the Registrar.

    (5) If a company fails to comply with subsection (2) or subsection (3),—

    • (a) the company commits an offence and is liable on conviction to the penalty set out in section 373(2); and

    • (b) every director of the company commits an offence and is liable on conviction to the penalty set out in section 374(2).

89 Share register as evidence of legal title

  • (1) Subject to section 91, the entry of the name of a person in the share register as holder of a share is prima facie evidence that legal title to the share vests in that person.

    (2) A company may treat the registered holder of a share as the only person entitled to—

    • (a) exercise the right to vote attaching to the share; and

    • (b) receive notices; and

    • (c) receive a distribution in respect of the share; and

    • (d) exercise the other rights and powers attaching to the share.

90 Directors' duty to supervise share register

  • (1) It is the duty of each director to take reasonable steps to ensure that the share register is properly kept and that share transfers are promptly entered on it in accordance with section 84.

    (2) A director who fails to comply with subsection (1) commits an offence and is liable on conviction to the penalty set out in section 373(2).

91 Power of court to rectify share register

  • (1) If the name of a person is wrongly entered in, or omitted from, the share register of a company, the person aggrieved, or a shareholder, may apply to the court—

    • (a) for rectification of the share register; or

    • (b) for compensation for loss sustained; or

    • (c) for both rectification and compensation.

    (2) On an application under this section the court may order—

    • (a) rectification of the register; or

    • (b) payment of compensation by the company or a director of the company for any loss sustained; or

    • (c) rectification and payment of compensation.

    (3) On an application under this section, the court may decide—

    • (a) a question relating to the entitlement of a person who is a party to the application to have his or her name entered in, or omitted from, the register; and

    • (b) a question necessary or expedient to be decided for rectification of the register.

92 Trusts not to be entered on register

  • No notice of a trust, whether express, implied, or constructive, may be entered on the share register.

93 Personal representative may be registered

  • (1) Notwithstanding section 92, a personal representative of a deceased person whose name is registered in a share register of a company as the holder of a share in that company is entitled to be registered as the holder of that share as personal representative.

    (2) Notwithstanding section 92, a personal representative of a deceased person beneficially entitled to a share in a company, being a share registered in a share register of that company, is with the consent of the company and the registered holder of that share, entitled to be registered as the holder of that share as personal representative.

    (3) The registration of a trustee, executor, or administrator pursuant to this section does not constitute notice of a trust.

94 Assignee of bankrupt may be registered

  • (1) Notwithstanding section 92, the assignee of the property of a bankrupt registered in a share register of a company as the holder of a share in that company is entitled to be registered as the holder of that share as the assignee of the property of the bankrupt.

    (2) Notwithstanding section 92, the assignee of the property of a bankrupt beneficially entitled to a share in a company, being a share registered in a register of that company, is, with the consent of the company and the registered holder of that share, entitled to be registered as the holder of that share as the assignee of the property of the bankrupt.

Share certificates

95 Share certificates

  • (1) Subject to subsection (2), a company whose shares are subject to a listing agreement with a stock exchange must, within 20 working days after the issue, or registration of a transfer, of shares in the company, as the case may be, send a share certificate to every holder of those shares stating—

    • (a) the name of the company; and

    • (b) the class of shares held by that person; and

    • (c) the number of shares held by that person.

    (2) Nothing in subsections (1) or (5) applies in relation to a company the shares in which can be transferred in accordance with the rules of a designated settlement system, or under a system authorised or approved under the Securities Transfer Act 1991, that does not require a share certificate for the transfer of shares.

    (3) A shareholder in a company, not being a company to which subsection (1) or subsection (2) applies, may apply to the company for a certificate relating to some or all of the shareholder's shares in the company.

    (4) On receipt of an application for a share certificate under subsection (3), the company must, within 20 working days after receiving the application,—

    • (a) if the application relates to some but not all of the shares, separate the shares shown in the register as owned by the applicant into separate parcels; one parcel being the shares to which the share certificate relates, and the other parcel being any remaining shares; and

    • (b) in all cases send to the shareholder a certificate stating—

      • (i) the name of the company; and

      • (ii) the class of shares held by the shareholder; and

      • (iii) the number of shares held by the shareholder to which the certificate relates.

    (5) Notwithstanding section 84, where a share certificate has been issued, a transfer of the shares to which it relates must not be registered by the company unless the form of transfer required by that section is accompanied by the share certificate relating to the share, or by evidence as to its loss or destruction and, if required, an indemnity in a form required by the board.

    (6) Subject to subsection (1), where shares to which a share certificate relates are to be transferred, and the share certificate is sent to the company to enable the registration of the transfer, the share certificate must be cancelled and no further share certificate issued except at the request of the transferee.

    (6A) Nothing in this section (except subsection (2)) limits or affects section 54 of the Securities Act 1978.

    (7) If a company fails to comply with subsection (1) or subsection (4),—

    • (a) the company commits an offence and is liable on conviction to the penalty set out in section 373(1); and

    • (b) every director of the company commits an offence and is liable on conviction to the penalty set out in section 374(1).

    Section 95(2): replaced, on 24 November 2009, by section 18 of the Reserve Bank of New Zealand Amendment Act 2009 (2009 No 53).

    Section 95(6A): inserted, on 1 July 1994, by section 13 of the Companies Act 1993 Amendment Act 1994 (1994 No 6).

Debentures

  • Heading: inserted, on 1 January 2008, by section 364(1) of the Property Law Act 2007 (2007 No 91).

95A Perpetual debentures

  • (1) A term that is expressed in a debenture or in a deed securing a debenture, issued or executed by a company, is not invalid by reason only that it provides that the debenture is—

    • (a) irredeemable; or

    • (b) redeemable only on the happening of a contingency, however remote, or on the expiration of a period, however long.

    (2) This section applies despite anything to the contrary in section 97 of the Property Law Act 2007 or in any rule of law or equity.

    Compare: 1952 No 51 s 151B

    Section 95A: inserted, on 1 January 2008, by section 364(1) of the Property Law Act 2007 (2007 No 91).

95B Power to reissue redeemed debentures in certain cases

  • (1) A company that has redeemed debentures previously issued by it may—

    • (a) reissue the debentures; or

    • (b) issue other debentures in their place.

    (2) Subsection (1) applies—

    • (a) whether the debentures were redeemed before, on, or after 1 January 2008:

    • (b) unless—

      • (i) the company's constitution or a contract entered into by the company contains a provision (whether express or implied) to the contrary; or

      • (ii) the company has, by passing a resolution or by some other act, indicated its intention that the debentures are cancelled.

    (3) On a reissue of redeemed debentures or of other debentures in their place, the debentures are to be treated as having, and as always having had, the same priority as the redeemed debentures.

    (4) Debentures of a company deposited to secure advances from time to time (whether on current account or otherwise) are not to be treated as redeemed because the company's account ceases to be in debit while the debentures are deposited.

    (5) Subsection (4) applies whether the debentures were deposited before, on, or after 1 January 2008.

    (6) The reissue of a debenture or the issue of another debenture in its place under this section (whether before, on, or after 1 January 2008)—

    • (a) is to be treated as the issue of a new debenture for the purposes of stamp duty payable (if any); but

    • (b) is not to be treated as the issue of a new debenture for the purposes of any provision limiting the amount or number of debentures to be issued.

    Compare: 1952 No 51 s 151C

    Section 95B: inserted, on 1 January 2008, by section 364(1) of the Property Law Act 2007 (2007 No 91).

95C Specific performance of contracts to subscribe for debentures

  • (1) A court may order the specific performance of a contract with a company to take up and pay for any debentures of the company.

    (2) The court must not refuse to order the specific performance of a contract of that kind on the ground that the contract is one to lend money.

    Compare: 1952 No 51 s 151D

    Section 95C: inserted, on 1 January 2008, by section 364(1) of the Property Law Act 2007 (2007 No 91).

New Zealand Companies Act 1993 New Zealand Companies Act 1993 New Zealand Companies Act 1993
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