Voidable transactions

291A Meaning of related party

(1)

For the purposes of this section, a person is related to a company if the person—

(a)

is a director or senior manager of the company or of a close body corporate of the company; or

(b)

is the spouse of a director or senior manager of the company; or

(c)

is a grandparent, parent, child, grandchild, brother, sister, nephew, niece, uncle, aunt, or first cousin of a director or of a senior manager of the company, whether or not by a step relationship; or

(d)

is the spouse of a person who is related to the company under paragraph (c); or

(e)

is a close body corporate of the company; or

(f)

is a partner of the company or of a director of the company (under the Partnership Law Act 2019); or

(g)

is a close business associate of the company; or

(h)

has an interest, direct or indirect, in 5 percent or more of any class of shares of the company; or

(i)

has an interest, direct or indirect, in 20 percent or more of any class of shares of a close body corporate of the company; or

(j)

is the spouse of a person who is related to the company under any of paragraphs (f) to (i); or

(k)

is a child, parent, brother, or sister (whether or not by a step relationship) of a person who is related to the company under any of paragraphs (f) to (i); or

(l)

is a trustee of a trust under which the company, or a person related to the company (under paragraphs (a) to (k)), is a beneficiary who—

(i)

is presently entitled to a share of the trust estate or of the income of the trust estate; or

(ii)

is, individually or together with other beneficiaries, in a position to control the trustee; or

(m)

is a trustee of a trust if—

(i)

the trust is a family trust within the meaning of section 173M(5) of the Tax Administration Act 1994; and

(ii)

a majority of the individuals who are beneficiaries under the trust are related to the company (under paragraphs (a) to (k)); or

(n)

is a nominee of a person who is related to the company under any of paragraphs (a) to (m).

(2)

In sections 292 and 293, a person is a related party of a company in relation to a transaction or charge if the person is related to the company at the time the transaction is made or the charge given.

(3)

However, in the case of a transaction referred to in section 292(4B)(a), a person is a related party of a company if the person is related to the company at any point during the continuing business relationship.

(4)

For the purposes of determining whether, in this section, a person is a close body corporate of a company (or whether 2 bodies corporate are close), 2 bodies corporate (A and B) are close if—

(a)

B is A’s holding company or subsidiary; or

(b)

more than half of A’s issued shares (other than shares that carry no right to participate beyond a specified amount in a distribution of either profits or capital) are held by B and bodies corporate that are close to B (whether directly or indirectly, but other than in a fiduciary capacity), or vice versa; or

(c)

more than half of the issued shares (other than shares that carry no right to participate beyond a specified amount in a distribution of either profits or capital) of each of A and B are held by members of the other (whether directly or indirectly, but other than in a fiduciary capacity); or

(d)

the businesses of A and B have been so carried on that the separate business of each body corporate, or a substantial part of that business, is not readily identifiable; or

(e)

there is another body corporate to which A and B are both close.

(5)

In this section,—

close business associate, in relation to a company, means a person who has a close professional or business relationship with the company, or with a director or senior manager of the company, that allows the person to—

(a)

assess the solvency of the company; or

(b)

obtain information from the company or any other person involved with the company that will enable the person to assess the solvency of the company

director, in relation to a body corporate that is not a company, has the same meaning as in relation to a company

senior manager has the same meaning as in section 6(1) of the Financial Markets Conduct Act 2013.

Section 291A: inserted, on 16 May 2020, by section 3 of the COVID-19 Response (Further Management Measures) Legislation Act 2020 (2020 No 13).