New Zealand Legislation: Acts
Acts are laws made by Parliament
Reprint as at 1 May 2011
| Public Act | 1993 No 105 |
| Date of assent | 28 September 1993 |
| Commencement | see section 1(2) |
Changes authorised by section 17C of the Acts and Regulations Publication Act 1989 have been made in this reprint.
A general outline of these changes is set out in the notes at the end of this reprint, together with other explanatory material about this reprint.
This Act is administered by the Ministry of Economic Development.
1 Short Title and commencement
5 Meaning of holding company and subsidiary
6 Extended meaning of subsidiary
8 Certain matters to be disregarded
11 Right to apply for registration
12 Application for registration
14 Certificate of incorporation
Part 3
Capacity, powers, and validity of actions
18 Dealings between company and other persons
21 Name of company if liability of shareholders limited
22 Application for reservation of name
26 No requirement for company to have constitution
27 Effect of Act on company having constitution
28 Effect of Act on company not having constitution
32 Adoption, alteration, and revocation of constitution
34 Court may alter constitution
36 Rights and powers attaching to shares
40 Contracts for issue of shares
41 Issue of shares on registration and amalgamation
44 Shareholder approval for issue of shares
46 Consideration for issue of shares
46A Consideration for issue of shares on registration
47 Consideration to be decided by board
49 Consideration in relation to issue of options and convertible securities
52 Board may authorise distributions
54 Shares in lieu of dividends
57 Reduction of shareholder liability a distribution
Company may acquire its own shares
58 Company may acquire its own shares
59 Acquisition of company's own shares
60 Board may make offer to acquire shares
61 Special offers to acquire shares
63 Stock exchange acquisitions subject to prior notice to shareholders
65 Stock exchange acquisitions not subject to prior notice to shareholders
66 Cancellation of shares repurchased
67 Enforceability of contract to repurchase shares
67A Company may hold its own shares
67B Rights and obligations of shares company holds in itself suspended
67C Reissue of shares company holds in itself
69 Redemption at option of company
70 Company must satisfy solvency test
71 Special redemption of shares
73 Cancellation of shares redeemed
74 Redemption at option of shareholder
Assistance by a company in the purchase of its own shares
77 Company must satisfy solvency test
78 Special financial assistance
80 Financial assistance not exceeding 5% of shareholders' funds
81 Enforceability of transactions
82 Subsidiary may not hold shares in holding company
Statement of shareholder rights
83 Statement of rights to be given to shareholders
85 Transfer of shares under approved system
86 Transfer of shares by operation of law
87 Company to maintain share register
89 Share register as evidence of legal title
90 Directors' duty to supervise share register
91 Power of court to rectify share register
92 Trusts not to be entered on register
93 Personal representative may be registered
94 Assignee of bankrupt may be registered
95B Power to reissue redeemed debentures in certain cases
95C Specific performance of contracts to subscribe for debentures
Part 7
Shareholders and their rights and obligations
98 Liability of former shareholders
99 Additional provisions relating to liability of shareholders and former shareholders
101 Shareholders not required to acquire shares by alteration to constitution
102 Liability of personal representative
104 Exercise of powers reserved to shareholders
105 Exercise of powers by ordinary resolution
106 Powers exercised by special resolution
107 Unanimous assent to certain types of action
108 Company to satisfy solvency test
109 Management review by shareholders
110 Shareholder may require company to purchase shares
112 Price for shares to be purchased by company determined
112A Price for shares referred to arbitration if shareholder objects to price
112B Interest payable on outstanding payments
112C Timing of transfer of shares
113 Purchase of shares by third party
115 Court may grant exemption if company insolvent
116 Meaning of classes and interest groups
117 Alteration of shareholder rights
118 Shareholder may require company to purchase shares
120 Annual meeting of shareholders
121 Special meetings of shareholders
122 Resolution in lieu of meeting
123 Court may call meeting of shareholders
125 Shareholders entitled to receive distributions, attend meetings, and exercise rights
Part 8
Directors and their powers and duties
131 Duty of directors to act in good faith and in best interests of company
132 Exercise of powers in relation to employees
133 Powers to be exercised for proper purpose
134 Directors to comply with Act and constitution
136 Duty in relation to obligations
138 Use of information and advice
Transactions involving self-interest
143 Application of sections 140 and 141 in certain cases
144 Interested director may vote
145 Use of company information
146 Meaning of relevant interest
147 Relevant interests to be disregarded in certain cases
148 Disclosure of share dealing by directors
149 Restrictions on share dealing by directors
Appointment and removal of directors
151 Qualifications of directors
152 Director's consent required
153 Appointment of first and subsequent directors
154 Court may appoint directors
155 Appointment of directors to be voted on individually
157 Director ceasing to hold office
158 Validity of director's acts
159 Notice of change of directors
Miscellaneous provisions relating to directors
161 Remuneration and other benefits
166 Costs of derivative action to be met by company
167 Powers of court where leave granted
168 Compromise, settlement, or withdrawal of derivative action
Personal actions by shareholders
169 Personal actions by shareholders against directors
170 Actions by shareholders to require directors to act
171 Personal actions by shareholders against company
172 Actions by shareholders to require company to act
175 Certain conduct deemed prejudicial
176 Alteration to constitution
177 Ratification of certain actions of directors
178 Information for shareholders
Part 10
Administration of companies
182 Pre-incorporation contracts may be ratified
183 Warranties implied in pre-incorporation contracts
185 Breach of pre-incorporation contract
185A Jurisdiction of District Courts
187 Change of registered office
188 Requirement to change registered office
191 Inspection of records by directors
193 Change of address for service
193A Rectification or correction of address for service
Part 11
Accounting records and audit
194 Accounting records to be kept
195 Place accounting records to be kept
196A Auditor is not required to audit financial statements of non-active company
197 Auditors' fees and expenses
198 Appointment of partnership
199 Qualifications of auditors
201 Appointment of first auditor
203 Auditor not seeking reappointment or resigning
204 Auditor to avoid conflict of interest
207 Auditor's attendance at shareholders' meeting
Part 12
Disclosure by companies
208 Obligation to prepare annual report
209 Obligation to make annual report available to shareholders
209A Board must send copy of annual report or concise annual report on request
209B Annual report and concise annual report made available by electronic means
210 Information for shareholders who elect not to receive annual report [Repealed]
211A Obligations to prepare and make available annual reports or financial statements do not apply to non-active companies
212 Shareholders may elect not to receive documents
214A Registrar may alter New Zealand register
215 Public inspection of company records
216 Inspection of company records by shareholders
221 Approval of amalgamation proposal
223 Registration of amalgamation proposal
224 Certificate of amalgamation
225 Effect of certificate of amalgamation
226 Powers of court in other cases
Part 14
Compromises with creditors
229 Notice of proposed compromise
233 Effect of compromise in liquidation of company
Part 15
Approval of arrangements, amalgamations, and compromises by court
236 Approval of arrangements, amalgamations, and compromises
237 Court may make additional orders
238 Parts 13 and 14 not affected
239 Application of section 233
Part 15A
Voluntary administration
239B Interpretation of some key terms
239C Interpretation of other terms
239D When administration begins
239EA Voluntary administration of licensed insurers
Subpart 2—Appointment of administrator
239F Who may be appointed administrator
239G Administrator must consent in writing
239H Who may appoint administrator
239J Appointment by liquidator or interim liquidator
239K Appointment by secured creditor
239M Appointment must not be revoked
239N Appointment of 2 or more administrators
239O Remuneration of administrator
Subpart 3—Resignation and removal of administrator
239P When office of administrator is vacant
239S Appointor may appoint new administrator to fill vacancy
239T Creditors must consider appointment of replacement administrator
Subpart 4—Effect of appointment of administrator
239U Outline of administrator's role
239W Administrator is company's agent
239Z Effect on dealing with company property
239AA Company officer's liability for compensation for void transaction or dealing
239AB Effect on transfer of shares
Subpart 5—Administrator's investigation of company's affairs
239AE Administrator must investigate company's affairs and consider possible courses of action
239AF Directors' statement of company's position
239AG Administrator's right to documents, etc
239AH Administrator may lodge report with Registrar
239AI Administrator must report misconduct
Subpart 6—Creditors' meetings generally
239AJ Administrator must call creditors' meetings
239AK Conduct of creditors' meetings
239AL Joint meetings of creditors of related companies in administration
239AM Power of court where outcome of voting at creditors' meeting determined by related entity
Subpart 7—First creditors' meeting to appoint creditors' committee
239AN Administrator must call first creditors' meeting
239AO Notice of first and subsequent creditors' meetings
239AP Administrator must table interests statement
239AQ Functions of creditors' committee
239AR Membership of creditors' committee
239AS What watershed meeting is
239AT Administrator must convene watershed meeting
239AU Notice of watershed meeting
239AV When watershed meeting must be held
239AW Directors must attend watershed meeting
239AX Disclosure of voting arrangements
239AY Court may order that pooled property owners are separate class
239AZ Adjournment of watershed meeting
239ABA What creditors may decide at watershed meeting
239ABB What happens if proposed deed not fully approved at watershed meeting
Subpart 9—Protection of company's property during administration
239ABD Owner or lessor must not recover property used by company
239ABE Proceeding must not be begun or continued
239ABF Administrator not liable in damages for refusing consent
239ABG Enforcement process halted
239ABH Duties of court officer in relation to company's property
239ABI Lis pendens taken to exist
239ABJ Administration not to trigger enforcement of guarantee of liability of director or relative
Subpart 10—Rights of secured creditor, owner, or lessor
239ABK Meaning of terms used in this subpart
239ABL If secured creditor acts before or during decision period
239ABM If enforcement of charges begins before administration
239ABN Charge over perishable property
239ABO Court may limit powers of secured creditor, etc, in relation to property subject to charge
239ABP Giving notice under security agreement
239ABQ If recovery of property begins before administration
239ABR Recovering perishable property
239ABS Court may limit powers of receiver, etc, in relation to property used by company
239ABT Giving notice under agreement about property
Subpart 11—Interface with liquidation
239ABU When liquidator may be appointed to company in administration
239ABV Court may adjourn application for liquidation
239ABW Court must not appoint interim liquidator if administration in creditors' interests
239ABX Effect of appointment of liquidator
239ABY Former administrator is default liquidator
239ABZ Person in control of company must lodge revised report with Registrar
239ACA Act of administrator in good faith must not be set aside in liquidation
239ACC Who is deed administrator
239ACD Who may be appointed deed administrator
239ACE Deed administrator must consent in writing
239ACF Appointment of deed administrator must not be revoked
239ACG Appointment of 2 or more deed administrators
239ACH When office of deed administrator vacant
239ACI Deed administrator may resign
239ACJ Removal of deed administrator
239ACK Remuneration of deed administrator
239ACL Deed administrator may sell shares in company
Subpart 13—Execution and effect of deed of company arrangement
239ACM When this subpart applies
239ACN Preparation and contents of deed
239ACP Procedure if deed not fully approved at watershed meeting
239ACQ Creditor must not act inconsistently with deed, etc, before execution
239ACR Company's failure to execute deed
239ACT Extent to which deed binds creditors
239ACU Person bound by deed must not take steps to liquidate, etc
239ACV Court may restrain creditors and others from enforcing charge or recovering property
239ACW Effect of deed on company's debts
239ACX Court may rule on validity of deed
Subpart 14—Administrator's duty to file accounts
239ACY Administrator includes deed administrator
239ACZ Administrator must file accounts
Subpart 15—Variation and termination of deed
239ADA Creditors may vary deed
239ADB Court may cancel creditors' variation
239ADE Termination by creditors
239ADF Creditors' meeting to consider proposed variation or termination of deed
Subpart 16—Administrator's liability and indemnity for debts of administration
239ADG Administrator not liable for company's debts except as provided in this subpart and in section 239Y
239ADH Administrator liable for general debts
239ADI Administrator's liability for rent
239ADJ Administrator not liable for rental if non-use notice in force
239ADK Court may exempt administrator from liability for rent
239ADL Administrator's indemnity
239ADM Administrator's right of indemnity has priority over other debts
239ADN Lien to secure indemnity
239ADP Orders to protect creditors during administration
239ADQ Court may rule on validity of administrator's appointment
239ADR Administrator may seek directions
239ADS Court may supervise administrator or deed administrator
239ADT Court may order administrator or deed administrator to remedy default
239ADU Court's power when office of administrator or deed administrator vacant, etc
Subpart 18—Notices about steps taken under this Part
239ADW Administrator must give notice of appointment
239ADX Secured creditor who appoints administrator must give notice to company
239ADY Deed administrator must give notice of execution of deed of company arrangement
239ADZ Deed administrator must give notice of failure to execute deed of company arrangement
239AEA Deed administrator must give notice of termination by creditors of deed of company arrangement
239AEB Company must disclose fact of administration
239AEC Notice of change of name
239AED Effect of contravention of this subpart
239AEE Effect of things done during administration of company
239AEF Interruption of time for doing act
Subpart 20—Set-off and netting agreements
239AEG Mutual credit and set-off
239AEH Application of set-off under netting agreement
239AEI Calculation of netted balance
239AEJ Mutuality required for transactions under bilateral netting agreements
239AEK When mutuality required for transactions under recognised multilateral netting agreements
239AEL Application of set-off under section 239AEG to transactions subject to netting agreements
239AEM Transactions under netting agreement and effect on certain sections
239AEN Rights under netting agreement not affected by commencement of administration
239AEO Effect of declaration of person as recognised clearing house under section 310K
239AEP Transactions under recognised multilateral netting agreement not affected by variation or revocation of declaration under section 310K
Subpart 21—Single administration of related companies in administration
239AEQ Interpretation of terms for purposes of this subpart
239AER Court may order single administration for related companies in administration
239AES Notice that application filed must be given to administrators and creditors
239AET Guidelines for single administration order
239AEU Court may order that related company in administration be added to existing pool
239AEV Creditors' meetings in single administration of pool companies
239AEW Pool companies may execute single deed of company administration
240A Liquidation of licensed insurers
241 Commencement of liquidation
241AA Restriction on appointment of liquidator by shareholders or board after application filed for court appointment
241A Commencement of liquidation to be recorded
242 Liquidators to act jointly unless otherwise stated
243 Liquidator to summon meeting of creditors
244 Liquidator to summon meeting of creditors in other cases
245 Liquidator may dispense with meetings of creditors
245A Power of court where outcome of voting at meeting of creditors determined by related entity
247 Power to stay or restrain certain proceedings against company
248 Effect of commencement of liquidation
250 Court may terminate liquidation
Provisions relating to prior execution process
251 Restriction on rights of creditors to complete execution, distraint, or attachment
252 Duties of officer in execution process
Duties, rights, and powers of liquidators
253 Principal duty of liquidator
254 Liquidator not required to act in certain cases
255 Other duties of liquidator
256 Duties in relation to accounts
257 Duties in relation to final report and accounts
258 Duty to have regard to views of creditors and shareholders
258A Duty to report suspected offences
258B Registrar may supply report to FMA
259 Documents to state company in liquidation
260A Liquidator may assign right to sue under this Act
261 Power to obtain documents and information
262 Documents in possession of receiver
263 Restriction on enforcement of lien over documents
264 Delivery of document creating charge over property
268 Power of liquidator to enforce liability of shareholders and former shareholders
269 Power to disclaim onerous property
270 Liquidator may be required to elect whether to disclaim onerous property
271 Pooling of assets of related companies
271A Notice that application filed must be given to administrators and creditors
273 Certain conduct prohibited
274 Duty to identify and deliver property
275 Refusal to supply essential services prohibited
276 Remuneration of liquidators
278 Expenses and remuneration payable out of assets of company
279 Liquidator ceases to hold office on completion of liquidation
Qualifications and supervision of liquidators
280 Qualifications of liquidators
281 Validity of acts of liquidators
283 Vacancies in office of liquidator
284 Court supervision of liquidation
285 Meaning of failure to comply
286 Orders to enforce liquidator's duties
Company unable to pay its debts
287 Meaning of inability to pay debts
288 Evidence and other matters
290 Court may set aside statutory demand
291 Additional powers of court on application to set aside statutory demand
292 Insolvent transaction voidable
294 Procedure for setting aside transactions and charges
296 Additional provisions relating to setting aside transactions and charges
297 Transactions at undervalue
298 Transactions for inadequate or excessive consideration with directors and certain other persons
299 Court may set aside certain securities and charges
300 Liability if proper accounting records not kept
301 Power of court to require persons to repay money or return property
302 Application of bankruptcy rules to liquidation of insolvent companies
304 Claims by unsecured creditors
305 Rights and duties of secured creditors
306 Ascertainment of amount of claim
307 Claim not of an ascertained amount
309 Claims relating to debts payable after commencement of liquidation
310A Definitions relating to set-off under netting agreement
310B Application of set-off under netting agreement
310C Calculation of netted balance
310D Mutuality required for transactions under bilateral netting agreements
310E When mutuality required for transactions under recognised multilateral netting agreements
310F Application of set-off under section 310 to transactions subject to netting agreements
310G Transactions under netting agreement and effect on certain sections
310H Rights under netting agreement not affected by commencement of liquidation
310I Set-off under netting agreement not affected by notice under section 294
310J Court may set aside bilateral netting agreement between company and related person
310K Certain persons may be declared to be recognised clearing houses
310L Matters that Bank must or may have regard to when making, varying, or revoking declaration under section 310K
310M Bank may impose conditions in declaration under section 310K
310N Bank to notify recognised clearing house about Bank's intention to revoke or vary declaration under section 310K
310O Transactions under recognised multilateral netting agreement not affected by variation or revocation of declaration under section 310K
313 Claims of other creditors and distribution of surplus assets
314 Meetings of creditors or shareholders
316 Establishment of Liquidation Surplus Account
316A Transitional provision in relation to voidable transactions
316B Transitional provision in relation to Liquidation Surplus Account under section 290 of Companies Act 1955
Part 17
Removal from the New Zealand register
318 Grounds for removal from register
319 Notice of intention to remove where company has ceased to carry on business or application fee not paid
320 Notice of intention to remove in other cases
321 Objection to removal from register
322 Duties of Registrar if objection received
324 Property of company removed from register
325 Disclaimer of property by the Crown
326 Liability of directors, shareholders, and others to continue
327 Liquidation of company removed from New Zealand register [Repealed]
328 Registrar may restore company to New Zealand register
329 Court may restore company to New Zealand register
331 Vesting of property in company on restoration to register
332 Meaning of carrying on business
332A Registrar may approve use of different form
333 Name to be reserved before carrying on business
334 Overseas companies to register under this Act
335 Validity of transactions not affected
336 Application for registration
337 Registration of overseas company
338 Use of name by overseas company
339 Alteration of constitution
339A Rectification or correction of name or address of person authorised to accept service
340 Annual return of overseas company
341 Overseas company ceasing to carry on business in New Zealand
342 Liquidation of overseas company
343 Attorneys of overseas companies
343A Overseas company not required to provide information, notice, or document in certain circumstances
Part 19
Transfer of registration
Registration of overseas companies as companies under this Act
344 Overseas companies may be registered as companies under this Act
345 Application for registration
346 Overseas companies must be authorised to register
347 Overseas companies that cannot be registered
Transfer of registration of companies to other jurisdictions
350 Companies may transfer incorporation
351 Application to transfer incorporation
353 Company to give public notice
354 Companies that cannot transfer incorporation
356 Effect of removal from register
357 Registrar and Deputy Registrars of Companies
358 District and Assistant Registrars of Companies
359 Responsible District Registrar
360A Rectification or correction of New Zealand register and overseas register
361 Registrar may direct transfer
363 Inspection and evidence of registers
365 Registrar's powers of inspection
366 Disclosure of information and reports
367 Application of Official Information Act 1982 and Privacy Act 1993
368 Appeals from decisions under section 367
369 Inspector's report admissible in liquidation proceedings
370 Appeals from Registrar's decisions
371 Exercise of powers under section 365 not affected by appeal
371A Sharing of information with Financial Markets Authority
373 Penalty for failure to comply with Act
374 Penalties that may be imposed on directors in cases of failure by board or company to comply with Act
378 Fraudulent use or destruction of property
380 Carrying on business fraudulently
382 Persons prohibited from managing companies
383 Court may disqualify directors
384 Liability for contravening sections 382 and 383
385 Registrar or FMA may prohibit persons from managing companies
385A Appeals from FMA's exercise of power under section 385
386 Liability for contravening section 385
386A Director of failed company must not be director, etc, of phoenix company with same or substantially similar name
386B Definitions for purpose of phoenix company provisions
386C Liability for debts of phoenix company
386D Exception for person named in successor company notice
386E Exception for temporary period while application for exemption is made
386F Exception in relation to non-dormant phoenix company known by pre-liquidation name of failed company for at least 12 months before liquidation
387 Service of documents on companies in legal proceedings
388 Service of other documents on companies
389 Service of documents on overseas companies in legal proceedings
390 Service of other documents on overseas companies
391 Service of documents on shareholders and creditors
392 Additional provisions relating to service
396 Summary Proceedings Act 1957 amended
397 Securities Transfer Act 1991 amended
398 Act subject to application of Cape Town Convention and Aircraft Protocol
Schedule 1
Proceedings at meetings of shareholders
Schedule 2
Sections of this Act that confer powers on directors that cannot be delegated
Schedule 3
Proceedings of the board of a company
Schedule 4
Information to be contained in annual return
Schedule 5
Proceedings at meetings of creditors
Schedule 6
Powers of liquidators
Schedule 8
Proceedings at meetings of liquidation committees
Schedule 9
Liquidation of overseas companies
Companies Amendment Act (No 2) 2006
An Act to reform the law relating to companies, and, in particular,—
(a) to reaffirm the value of the company as a means of achieving economic and social benefits through the aggregation of capital for productive purposes, the spreading of economic risk, and the taking of business risks; and
(b) to provide basic and adaptable requirements for the incorporation, organisation, and operation of companies; and
(c) to define the relationships between companies and their directors, shareholders, and creditors; and
(d) to encourage efficient and responsible management of companies by allowing directors a wide discretion in matters of business judgment while at the same time providing protection for shareholders and creditors against the abuse of management power; and
(e) to provide straightforward and fair procedures for realising and distributing the assets of insolvent companies
