(1) In this Act, unless the context otherwise requires,—

(2) Where,—

• (a) In relation to a company or an overseas company, any document is required to be delivered or any thing is required to be done to a District Registrar or an Assistant Registrar in whose office the records relating to the company or overseas company are kept within a period specified by this Act; and

• (b) The last day of that period falls on the day of the anniversary of the province in which that office is situated,—

the document may be delivered or that thing may be done to that District Registrar or Assistant Registrar on the next working day.

(3) In this Act, a company is related to another company if—

• (a) The other company is its holding company or subsidiary; or

• (b) More than half of the issued shares of the company, other than shares that carry no right to participate beyond a specified amount in a distribution of either profits or capital, is held by the other company and companies related to that other company (whether directly or indirectly, but other than in a fiduciary capacity); 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 them is held by members of the other (whether directly or indirectly, but other than in a fiduciary capacity); or

• (d) The businesses of the companies have been so carried on that the separate business of each company, or a substantial part of it, is not readily identifiable; or

• (e) There is another company to which both companies are related;—

and related company has a corresponding meaning.

(4) For the purposes of subsection (3) of this section, a company within the meaning of section 2 of the Companies Act 1955 is related to another company if, were it a company within the meaning of subsection (1) of this section, it would be related to that other company.

(5) A reference in this Act to an address means,—

• (a) In relation to an individual, the full address of the place where that person usually lives:

• (b) In relation to a body corporate, its registered office or, if it does not have a registered office, its principal place of business.

(1) Where, pursuant to this Act, public notice must be given of any matter affecting a company, that notice must be given by publishing notice of the matter—

• (a) In at least 1 issue of the Gazette; and

• (b) In at least 1 issue of a newspaper circulating in the area in which is situated—

  • (i) The company's place of business; or

  • (ii) If the company has more than 1 place of business, the company's principal place of business; or

  • (iii) If the company has no place of business or neither its place of business nor its principal place of business is known, the company's registered office.

(2) Where, pursuant to this Act, public notice must be given of any matter affecting an overseas company, that notice must be given by publishing notice of the matter—

• (a) In at least 1 issue of the Gazette; and

• (b) In at least 1 issue of a newspaper circulating in the area in which is situated—

  • (i) The place of business in New Zealand of the overseas company; or

  • (ii) If the overseas company has more than 1 place of business in New Zealand, the principal place of business in New Zealand of the overseas company.

(1) For the purposes of this Act, a company satisfies the solvency test if—

• (a) The company is able to pay its debts as they become due in the normal course of business; and

• (b) The value of the company's assets is greater than the value of its liabilities, including contingent liabilities.

(2) Without limiting sections 52 and 55(3) of this Act, in determining for the purposes of this Act (other than sections 221 and 222 which relate to amalgamations) whether the value of a company's assets is greater than the value of its liabilities, including contingent liabilities, the directors—

• (a) Must have regard to—

  • (i) The most recent financial statements of the company that comply with section 10 of the Financial Reporting Act 1993; and

  • (ii) All other circumstances that the directors know or ought to know affect, or may affect, the value of the company's assets and the value of the company's liabilities, including its contingent liabilities:

• (b) May rely on valuations of assets or estimates of liabilities that are reasonable in the circumstances.

(3) Without limiting sections 221 and 222 of this Act, in determining for the purposes of those sections whether the value of the amalgamated company's assets will be greater than the value of its liabilities, including contingent liabilities, the directors of each amalgamating company—

• (a) Must have regard to—

  • (i) Financial statements that comply with section 10 of the Financial Reporting Act 1993 and that are prepared as if the amalgamation had become effective; and

  • (ii) All other circumstances that the directors know or ought to know would affect, or may affect, the value of the amalgamated company's assets and the value of its liabilities, including contingent liabilities:

• (b) May rely on valuations of assets or estimates of liabilities that are reasonable in the circumstances.

(4) In determining, for the purposes of this section, the value of a contingent liability, account may be taken of—

• (a) The likelihood of the contingency occurring; and

• (b) Any claim the company is entitled to make and can reasonably expect to be met to reduce or extinguish the contingent liability.

(1) For the purposes of this Act, a company is a subsidiary of another company if, but only if,—

• (a) That other company—

  • (i) Controls the composition of the board of the company; or

  • (ii) Is in a position to exercise, or control the exercise of, more than one-half the maximum number of votes that can be exercised at a meeting of the company; or

  • (iii) Holds more than one-half of the issued shares of the company, other than shares that carry no right to participate beyond a specified amount in a distribution of either profits or capital; or

  • (iv) Is entitled to receive more than one-half of every dividend paid on shares issued by the company, other than shares that carry no right to participate beyond a specified amount in a distribution of either profits or capital; or

• (b) The company is a subsidiary of a company that is that other company's subsidiary.

(2) For the purposes of this Act, a company is another company's holding company, if, but only if, that other company is its subsidiary.

(3) In this section and sections 7 and 8 of this Act, the expression company includes a body corporate.

For the purposes of this Act, a company within the meaning of section 2 of the Companies Act 1955 is a subsidiary of another company if, were it a company within the meaning of section 2 of this Act, it would be a subsidiary of that other company.

For the purposes of section 5 of this Act, without limiting the circumstances in which the composition of a company's board is to be taken to be controlled by another company, the composition of the board is to be taken to be so controlled if the other company, by exercising a power exercisable (whether with or without the consent or concurrence of any other person) by it, can appoint or remove all the directors of the company, or such number of directors as together hold a majority of the voting rights at meetings of the board of the company, and for this purpose, the other company is to be taken as having power to make such an appointment if—

• (a) A person cannot be appointed as a director of the company without the exercise by the other company of such a power in the person's favour; or

• (b) A person's appointment as a director of the company follows necessarily from the person being a director or other officer of the other company.

In determining whether a company is a subsidiary of another company,—

• (a) Shares held or a power exercisable by that other company in a fiduciary capacity are not to be treated as held or exercisable by it:

• (b) Subject to paragraphs (c) and (d) of this section, shares held or a power exercisable—

  • (i) By a person as a nominee for that other company, except where that other company is concerned only in a fiduciary capacity; or

  • (ii) By, or by a nominee for, a subsidiary of that other company, not being a subsidiary which is concerned only in a fiduciary capacity,—

  are to be treated as held or exercisable by that other company:

• (c) Shares held or a power exercisable by a person under the provisions of debentures of the company or of a trust deed for securing an issue of debentures shall be disregarded:

• (d) Shares held or a power exercisable by, or by a nominee for, that other company or its subsidiary (not being held or exercisable in the manner described in paragraph (c) of this section) are not to be treated as held or exercisable by that other company if—

  • (i) The ordinary business of that other company or its subsidiary, as the case may be, includes the lending of money; and

  • (ii) The shares are held or the power is exercisable by way of security only for the purposes of a transaction entered into in the ordinary course of that business.

This Act binds the Crown.

A company must have—

• (a) A name; and

• (b) One or more shares; and

• (c) One or more shareholders, having limited or unlimited liability for the obligations of the company; and

• (d) One or more directors.

Any person may, either alone or together with another person, apply for registration of a company under this Act.

(1) An application for registration of a company under this Act must be sent or delivered to the Registrar, and must be—

• (a) In the prescribed form; and

• (b) Signed by each applicant; and

• (c) Accompanied by a document in the prescribed form signed by every person named as a director, containing his or her consent to be a director and a certificate that he or she is not disqualified from being appointed or holding office as a director of a company; and

• (d) Accompanied by—

  • (i) A document in the prescribed form signed by every person named as a shareholder, or by an agent of that person authorised in writing, containing his or her consent to being a shareholder and to taking the class and number of shares specified in the document; and

  • (ii) If the document has been signed by an agent, the instrument authorising the agent to sign it; and

• (e) Accompanied by a notice reserving a name for the proposed company; and

• (f) If the proposed company is to have a constitution, accompanied by a document certified by at least one applicant as the company's constitution.

(2) Without limiting subsection (1) of this section, the application must state—

• (a) The full name and address of each applicant; and

• (b) The full name and residential address of every director of the proposed company; and

• (c) The full name and residential address of every shareholder of the proposed company, and the number of shares to be issued to every shareholder; and

• (d) The registered office of the proposed company; and

• (e) The address for service of the proposed company.

As soon as the Registrar receives a properly completed application for registration of a company, the Registrar must—

• (a) Register the application; and

• (b) Issue a certificate of incorporation.

A certificate of incorporation of a company issued under section 13 of this Act is conclusive evidence that—

• (a) All the requirements of this Act as to registration have been complied with; and

• (b) On and from the date of incorporation stated in the certificate, the company is incorporated under this Act.

A company is a legal entity in its own right separate from its shareholders and continues in existence until it is removed from the New Zealand register.

(1) Subject to this Act, any other enactment, and the general law, a company has, both within and outside New Zealand,—

• (a) Full capacity to carry on or undertake any business or activity, do any act, or enter into any transaction; and

• (b) For the purposes of paragraph (a) of this subsection, full rights, powers, and privileges.

(2) The constitution of a company may contain a provision relating to the capacity, rights, powers, or privileges of the company only if the provision restricts the capacity of the company or those rights, powers, and privileges.

(1) No act of a company and no transfer of property to or by a company is invalid merely because the company did not have the capacity, the right, or the power to do the act or to transfer or take a transfer of the property.

(2) Subsection (1) of this section does not limit—

• (a) Section 164 of this Act (which relates to injunctions to restrain conduct by a company that would contravene its constitution); or

• (b) Section 165 of this Act (which relates to derivative actions by directors and shareholders); or

• (c) Section 169 of this Act (which relates to actions by shareholders of a company against the directors); or

• (d) Section 170 of this Act (which relates to actions by shareholders to require the directors of a company to take action under the constitution or this Act).

(3) The fact that an act is not, or would not be, in the best interests of a company does not affect the capacity of the company to do the act.

(1) A company or a guarantor of an obligation of a company may not assert against a person dealing with the company or with a person who has acquired property, rights, or interests from the company that—

• (a) This Act or the constitution of the company has not been complied with:

• (b) A person named as a director of the company in the most recent notice received by the Registrar under section 159 of this Act—

  • (i) Is not a director of a company; or

  • (ii) Has not been duly appointed; or

  • (iii) Does not have authority to exercise a power which a director of a company carrying on business of the kind carried on by the company customarily has authority to exercise:

• (c) A person held out by the company as a director, employee, or agent of the company—

  • (i) Has not been duly appointed; or

  • (ii) Does not have authority to exercise a power which a director, employee, or agent of a company carrying on business of the kind carried on by the company customarily has authority to exercise:

• (d) A person held out by the company as a director, employee, or agent of the company with authority to exercise a power which a director, employee, or agent of a company carrying on business of the kind carried on by the company does not customarily have authority to exercise, does not have authority to exercise that power:

• (e) A document issued on behalf of a company by a director, employee, or agent of the company with actual or usual authority to issue the document is not valid or not genuine—

unless the person has, or ought to have, by virtue of his or her position with or relationship to the company, knowledge of the matters referred to in any of paragraphs (a), (b), (c), (d), or (e), as the case may be, of this subsection.

(2) Subsection (1) of this section applies even though a person of the kind referred to in paragraphs (b) to (e) of that subsection acts fraudulently or forges a document that appears to have been signed on behalf of the company, unless the person dealing with the company or with a person who has acquired property, rights, or interests from the company has actual knowledge of the fraud or forgery.

A person is not affected by, or deemed to have notice or knowledge of the contents of, the constitution of, or any other document relating to, a company merely because—

• (a) The constitution or document is registered on the New Zealand register; or

• (b) It is available for inspection at an office of the company.

The Registrar must not register a company under a name or register a change of the name of a company unless the name has been reserved.

The registered name of a company must end with the word “Limited” or the words “Tapui (Limited)” if the liability of the shareholders of the company is limited.

(1) An application for reservation of the name of a company must be sent or delivered to the Registrar, and must be in the prescribed form.

(2) The Registrar must not reserve a name—

• (a) The use of which would contravene an enactment; or

• (b) That is identical or almost identical to the name of another company or another company under the Companies Act 1955; or

• (c) That is identical or almost identical to a name that the Registrar has already reserved under this Act or the Companies Act 1955 and that is still available for registration; or

• (d) That, in the opinion of the Registrar, is offensive.

(3) The Registrar must advise the applicant by notice in writing—

• (a) Whether or not the Registrar has reserved the name; and

• (b) If the name has been reserved, that, unless the reservation is sooner revoked by the Registrar, the name is available for registration of a company with that name or on a change of name for 20 working days after the date stated in the notice.

(1) An application to change the name of a company must—

• (a) Be in the prescribed form; and

• (b) Be accompanied by a notice reserving the name; and

• (c) Subject to the constitution of the company, be made by a director of the company with the approval of its board.

(2) Subject to its constitution, an application to change the name of a company is not an amendment of the constitution of the company for the purposes of this Act.

(3) As soon as the Registrar receives a properly completed application, the Registrar must—

• (a) Enter the new name of the company on the New Zealand register; and

• (b) Issue a certificate of incorporation for the company recording the change of name of the company.

(4) A change of name of a company—

• (a) Takes effect from the date of the certificate issued under subsection (3) of this section; and

• (b) Does not affect rights or obligations of the company, or legal proceedings by or against the company, and legal proceedings that might have been continued or commenced against the company under its former name may be continued or commenced against it under its new name.

(1) If the Registrar believes on reasonable grounds that the name under which a company is registered should not have been reserved, the Registrar may serve written notice on the company to change its name by a date specified in the notice, being a date not less than 20 working days after the date on which the notice is served.

(2) If the company does not change its name within the period specified in the notice, the Registrar may enter on the New Zealand register a new name for the company selected by the Registrar, being a name under which the company may be registered under this Part of this Act.

(3) If the Registrar registers a new name under subsection (2) of this section, the Registrar must issue a certificate of incorporation for the company recording the new name of the company, and section 23(4) of this Act applies in relation to the registration of the new name as if the name of the company had been changed under that section.

(1) A company must ensure that its name is clearly stated in—

• (a) Every written communication sent by, or on behalf of, the company; and

• (b) Every document issued or signed by, or on behalf of, the company that evidences or creates a legal obligation of the company.

(2) Where—

• (a) A document that evidences or creates a legal obligation of a company is issued or signed by or on behalf of the company; and

• (b) The name of the company is incorrectly stated in the document,—

every person who issued or signed the document is liable to the same extent as the company if the company fails to discharge the obligation unless—

• (c) The person who issued or signed the document proves that the person in whose favour the obligation was incurred was aware at the time the document was issued or signed that the obligation was incurred by the company; or

• (d) The Court is satisfied that it would not be just and equitable for the person who issued or signed the document to be so liable.

(3) For the purposes of subsections (1) and (2) of this section and of section 180 of this Act (which relates to the manner in which a company may enter into contracts and other obligations), a company may use a generally recognised abbreviation of a word or words in its name if it is not misleading to do so.

(4) If, within the period of 12 months immediately preceding the giving by a company of any public notice, the name of the company was changed, the company must ensure that the notice states—

• (a) That the name of the company was changed in that period; and

• (b) The former name or names of the company.

(5) If a company fails to comply with subsection (1) or subsection (4) of this section,—

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

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

A company may but does not have to have a constitution.

If a company has a constitution, the company, the board, each director, and each shareholder of the company have the rights, powers, duties, and obligations set out in this Act except to the extent that they are negated or modified, in accordance with this Act, by the constitution of the company.

If a company does not have a constitution, the company, the board, each director, and each shareholder of the company have the rights, powers, duties, and obligations set out in this Act.

The constitution of a company, if it has one, is,—

• (a) In the case of a company registered under Part 2 of this Act, a document certified by the applicant for registration of the company as the company's constitution; or

• (b) In the case of an existing company that is reregistered pursuant to the Companies Reregistration Act 1993, a document certified by the applicant for reregistration as the company's constitution; or

• (c) A document that is adopted by the company as its constitution under section 32 of this Act; or

• (d) A document described in section 33 of this Act; or

• (e) A document described in paragraph (a) or paragraph (b) or paragraph (c) or paragraph (d) of this section as altered by the company under section 32 of this Act or varied by the Court under section 34 of this Act.

Subject to section 16(2) of this Act, the constitution of a company may contain—

• (a) Matters contemplated by this Act for inclusion in the constitution of a company:

• (b) Such other matters as the company wishes to include in its constitution.

(1) The constitution of a company has no effect to the extent that it contravenes, or is inconsistent with, this Act.

(2) Subject to this Act, the constitution of a company is binding as between—

• (a) The company and each shareholder; and

• (b) Each shareholder—

in accordance with its terms.

(1) The shareholders of a company that does not have a constitution may, by special resolution, adopt a constitution for the company.

(2) Without limiting section 117 of this Act (which relates to an alteration of shareholders' rights) and section 174 of this Act (which relates to the right of a shareholder to apply to the Court for relief in cases of prejudice), but subject to section 57 of this Act (which relates to the reduction of shareholders' liability), the shareholders of a company may, by special resolution, alter or revoke the constitution of the company.

(3) Within 10 working days of the adoption of a constitution by a company, or the alteration or revocation of the constitution of a company, as the case may be, the board must ensure that a notice in the prescribed form of the adoption of the constitution or of the alteration or revocation of the constitution is delivered to the Registrar for registration.

(4) If the board of a company fails to comply with subsection (3) of this section, every director of the company commits an offence and is liable, on conviction, to the penalty set out in section 374(2) of this Act.

(1) A company may, from time to time, deliver to the Registrar a single document that incorporates the provisions of a document referred to in paragraph (a) or paragraph (b) or paragraph (c) or paragraph (d) or paragraph (e) of section 29 of this Act, together with all amendments to it.

(2) The Registrar may, if the Registrar considers that by reason of the number of amendments to a company's constitution it would be desirable for the constitution to be contained in a single document, by notice in writing, require a company to deliver to the Registrar a single document that incorporates the provisions of a document referred to in paragraph (a) or paragraph (b) or paragraph (c) or paragraph (d) of section 29 of this Act, together with all amendments to it.

(3) Within 20 working days of receipt by a company of a notice under subsection (2) of this section, the board must ensure that the document required by that subsection is received by the Registrar for registration.

(4) The board must ensure that a document delivered to the Registrar under this section is accompanied by a certificate signed by a person authorised by the board that the document complies with subsection (1) or subsection (2), as the case may be, of this section.

(5) As soon as the Registrar receives a document certified in accordance with subsection (4) of this section, the Registrar must register the document.

(6) If the board of a company fails to comply with subsection (3) or subsection (4) of this section, every director of the company commits an offence and is liable on conviction to the penalty set out in section 374(2) of this Act.

(1) The Court may, on the application of a director or shareholder of a company, if it is satisfied that it is not practicable to alter the constitution of the company using the procedure set out in this Act or in the constitution itself, make an order altering the constitution of a company on such terms and conditions that it thinks fit.

(2) The applicant for the order must ensure that a copy of an order made under subsection (1) of this section, together with a copy of the constitution as altered, is delivered to the Registrar for registration within 10 working days.

(3) A person who fails to comply with subsection (2) of this section commits an offence and is liable on conviction to the penalty set out in section 373(2) of this Act.

A share in a company is personal property.

(1) Subject to subsection (2) of this section, a share in a company confers on the holder—

• (a) The right to one vote on a poll at a meeting of the company on any resolution, including any resolution to—

  • (i) Appoint or remove a director or auditor:

  • (ii) Adopt a constitution:

  • (iii) Alter the company's constitution, if it has one:

  • (iv) Approve a major transaction:

  • (v) Approve an amalgamation of the company under section 221 of this Act:

  • (vi) Put the company into liquidation:

• (b) The right to an equal share in dividends authorised by the board:

• (c) The right to an equal share in the distribution of the surplus assets of the company.

(2) Subject to section 53 of this Act, the rights specified in subsection (1) of this section may be negated, altered, or added to by the constitution of the company or in accordance with the terms on which the share is issued under section 41(b) or section 42 or section 44 or section 107(2), as the case may be, of this Act.

(1) Subject to the constitution of the company, different classes of shares may be issued in a company.

(2) Without limiting subsection (1) of this section, shares in a company may—

• (a) Be redeemable within the meaning of section 68 of this Act; or

• (b) Confer preferential rights to distributions of capital or income; or

• (c) Confer special, limited, or conditional voting rights; or

• (d) Not confer voting rights.

(1) A share must not have a nominal or par value.

(2) Nothing in subsection (1) of this section prevents the issue by a company of a redeemable share.

(1) Subject to any limitation or restriction on the transfer of shares in the constitution, a share in a company is transferable.

(2) A share is transferred by entry in the share register in accordance with section 84 of this Act.

(3) The personal representative of a deceased shareholder may transfer a share even though the personal representative is not a shareholder at the time of transfer.

A contract or deed under which a company is or may be required to issue shares, whether on the exercise of an option or on the conversion of securities or otherwise, is an illegal contract for the purposes of the Illegal Contracts Act 1970 unless—

• (a) the board is entitled to issue the shares; and

• (b) either—

  • (i) the board has complied with section 47 or section 49; or

  • (ii) all entitled persons agree or concur with the issue of the shares under section 107(2); or

  • (iii) the contract or deed expressly provides that the contract or deed is subject to—

    • (A) the board complying with section 47 or section 49; or

    • (B) all entitled persons agreeing to or concurring with the issue of the shares under section 107(2).

A company must,—

• (a) Forthwith after the registration of the company, issue to any person or persons named in the application for registration as a shareholder or shareholders, the number of shares specified in the application as being the number of shares to be issued to that person or those persons:

• (b) In the case of an amalgamated company, forthwith after the amalgamation is effective, issue to any person entitled to a share or shares under the amalgamation proposal, the share or shares to which that person is entitled.

Subject to this Act and the constitution of the company, the board of a company may issue shares at any time, to any person, and in any number it thinks fit.

(1) The board of a company must deliver to the Registrar for registration, within 10 working days of the issue of shares under section 41(b) or section 42 or section 107(2) of this Act, a notice in the prescribed form of the issue of the shares by the company.

(2) If the board of a company fails to comply with subsection (1) of this section, every director of the company commits an offence and is liable on conviction to the penalty set out in section 374(2) of this Act.

(1) Notwithstanding section 42 of this Act, if shares cannot be issued by reason of any limitation or restriction in the company's constitution, the board may issue shares if the board obtains the approval for the issue in the same manner as approval is required for an alteration to the constitution that would permit such an issue.

(2) Subject to the terms of the approval, the shares may be issued at any time, to any person, and in any number the Board thinks fit.

(3) Within 10 working days of approval being given under subsection (1) of this section, the board must ensure that notice of that approval in the prescribed form is delivered to the Registrar for registration.

(4) Nothing in this section affects the need to obtain the approval of an interest group in accordance with section 117 of this Act (which relates to the alteration of shareholders' rights) if the issue of shares affects the rights of that interest group.

(5) A failure to comply with this section does not affect the validity of an issue of shares.

(6) If the board of a company fails to comply with subsection (3) of this section, every director of the company commits an offence and is liable on conviction to the penalty set out in section 374(2) of this Act.

(1) Shares issued or proposed to be issued by a company that rank or would rank as to voting or distribution rights, or both, equally with or prior to shares already issued by the company must be offered for acquisition to the holders of the shares already issued in a manner and on terms that would, if accepted, maintain the existing voting or distribution rights, or both, of those holders.

(2) An offer under subsection (1) of this section must remain open for acceptance for a reasonable time.

(3) The constitution of a company may negate, limit, or modify the requirements of this section.

The consideration for which a share is issued may take any form and may be cash, promissory notes, contracts for future services, real or personal property, or other securities of the company.

A shareholder is not liable to pay or provide any consideration in respect of an issue of shares under section 41(a) unless—

• (a) The constitution of the company specifies the consideration to be paid or provided for those shares; or

• (b) The shareholder is liable to pay or provide consideration for those shares pursuant to either a pre-incorporation contract (within the meaning of section 182) or a contract entered into after the registration of the company.

(1) Before the board of a company issues shares under section 42 or section 44 of this Act, the board must—

• (a) Decide the consideration for which the shares will be issued and the terms on which they will be issued; and

• (b) If the shares are to be issued other than for cash, determine the reasonable present cash value of the consideration for the issue; and

• (c) Resolve that, in its opinion, the consideration for and terms of the issue are fair and reasonable to the company and to all existing shareholders; and

• (d) If the shares are to be issued other than for cash, resolve that, in its opinion, the present cash value of the consideration to be provided for the issue of the shares is not less than the amount to be credited for the issue of the shares.

(2) The directors who vote in favour of a resolution required by subsection (1) of this section must sign a certificate—

• (a) Stating the consideration for, and the terms of, the issue; and

• (b) Describing the consideration in sufficient detail to identify it; and

• (c) Where a present cash value has been determined in accordance with subsection (1)(b) of this section, stating that value and the basis for assessing it; and

• (d) Stating that, in their opinion, the consideration for and terms of issue are fair and reasonable to the company and to all existing shareholders; and

• (e) If the shares are to be issued other than for cash stating that, in their opinion, the present cash value of the consideration to be provided for the issue of the shares is not less than the amount to be credited for the issue of the shares.

(3) Before shares that have already been issued are credited as fully or partly paid up other than for cash, the board must—

• (a) Determine the reasonable present cash value of the consideration; and

• (b) Resolve that, in its opinion, the present cash value of the consideration is—

  • (i) Fair and reasonable to the company and to all existing shareholders; and

  • (ii) Not less than the amount to be credited in respect of the shares.

(4) The directors who vote in favour of a resolution under subsection (3) of this section must sign a certificate—

• (a) Describing the consideration in sufficient detail to identify it; and

• (b) Stating—

  • (i) The present cash value of the consideration and the basis for assessing it; and

  • (ii) That the present cash value of the consideration is fair and reasonable to the company and to all existing shareholders; and

  • (iii) That the present cash value of the consideration is not less than the amount to be credited in respect of the shares.

(5) The Board must deliver a copy of a certificate that complies with subsection (2) or subsection (4) of this section to the Registrar for registration within 10 working days after it is given.

(6) For the purposes of this section, shares that are or are to be credited as paid up, whether wholly or partly, as part of an arrangement that involves the transfer of property or the provision of services and an exchange of cash or cheques or other negotiable instruments, whether simultaneously or not, must be treated as paid up other than in cash to the value of the property or services.

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

(8) Nothing in this section applies to the issue of shares in a company on—

• (a) The conversion of any convertible securities; or

• (b) The exercise of any option to acquire shares in the company.

(9) If the board of a company fails to comply with subsection (5) of this section, every director of the company commits an offence and is liable, on conviction, to the penalty set out in section 374(2) of this Act.

Section 47 of this Act does not apply to—

• (a) The issue of shares that are fully paid up from the reserves of the company to all shareholders of the same class in proportion to the number of shares held by each shareholder:

• (b) The consolidation and division of the shares or any class of shares in the company in proportion to those shares or the shares in that class:

• (c) The subdivision of the shares or any class of shares in the company in proportion to those shares or the shares in that class.

(1) Before the board of a company issues any securities that are convertible into shares in the company or any options to acquire shares in the company, the board must—

• (a) Decide the consideration for which the convertible securities or options, and, in either case, the shares will be issued and the terms on which they will be issued; and

• (b) If the shares are to be issued other than for cash, determine the reasonable present cash value of the consideration for the issue; and

• (c) Resolve that, in its opinion, the consideration for and terms of the issue of the convertible securities or options, and, in either case, the shares are fair and reasonable to the company and to all existing shareholders; and

• (d) If the shares are to be issued other than for cash, resolve that, in its opinion, the present cash value of the consideration to be provided is not less than the amount to be credited for the issue of the shares.

(2) The directors who vote in favour of a resolution required by subsection (1) of this section must sign a certificate—

• (a) Stating the consideration for, and the terms of, the issue of the convertible securities or options, and, in either case, the shares; and

• (b) Describing the consideration in sufficient detail to identify it; and

• (c) Where a present cash value has been determined in accordance with subsection (1)(b) of this section, stating that value and the basis for assessing it; and

• (d) Stating that, in their opinion, the consideration for and terms of issue of the convertible securities or options, and, in either case, the shares are fair and reasonable to the company and to all existing shareholders; and

• (e) If the shares are to be issued other than for cash, stating that, in their opinion, the present cash value of the consideration to be provided is not less than the amount to be credited for the issue of the shares.

(3) The Board must deliver a copy of a certificate that complies with subsection (2) of this section to the Registrar for registration within 10 working days after it is given.

(4) For the purposes of this section, shares that are to be credited as paid up, whether wholly or partly, as part of an arrangement that involves the transfer of property or the provision of services and an exchange of cash or cheques or other negotiable instruments, whether simultaneously or not, must be treated as paid up other than in cash to the value of the property or services.

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

(6) If the Board of a company fails to comply with subsection (3) of this section, every director of the company commits an offence and is liable on conviction to the penalty set out in section 374(2) of this Act.

The issue by a company of a share that—

• (a) Increases a liability of a person to the company; or

• (b) Imposes a new liability on a person to the company—

is void if that person or an agent of that person authorised in writing does not consent in writing to becoming the holder of the share before it is issued.

A share is issued when the name of the holder is entered on the share register.

(1) The board of a company that is satisfied on reasonable grounds that the company will, immediately after the distribution, satisfy the solvency test may, subject to section 53 of this Act and the constitution of the company, authorise a distribution by the company at a time, and of an amount, and to any shareholders it thinks fit.

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

(3) If, after a distribution is authorised and before it is made, the board ceases to be satisfied on reasonable grounds that the company will, immediately after the distribution is made, satisfy the solvency test, any distribution made by the company is deemed not to have been authorised.

(4) In applying the solvency test for the purposes of this section and section 56 of this Act,—

• (a) Debts includes fixed preferential returns on shares ranking ahead of those in respect of which a distribution is made (except where that fixed preferential return is expressed in the constitution as being subject to the power of the directors to make distributions), but does not include debts arising by reason of the authorisation; and

• (b) Liabilities includes the amount that would be required, if the company were to be removed from the New Zealand register after the distribution, to repay all fixed preferential amounts payable by the company to shareholders, at that time, or on earlier redemption (except where such fixed preferential amounts are expressed in the constitution as being subject to the power of directors to make distributions); but, subject to paragraph (a) of this subsection, does not include dividends payable in the future.

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

(1) A dividend is a distribution other than a distribution to which section 59 or section 76 of this Act applies.

(2) The board of a company must not authorise a dividend—

• (a) In respect of some but not all the shares in a class; or

• (b) That is of a greater value per share in respect of some shares of a class than it is in respect of other shares of that class—

unless the amount of the dividend in respect of a share of that class is in proportion to the amount paid to the company in satisfaction of the liability of the shareholder under the constitution of the company or under the terms of issue of the share or is required, for a portfolio tax rate entity, as a result of section HL 7 of the Income Tax Act 2004.

(3) Notwithstanding subsection (2) of this section, a shareholder may waive his or her entitlement to receive a dividend by notice in writing to the company signed by or on behalf of the shareholder.

Subject to the constitution of the company, the board of a company may issue shares to any shareholders who have agreed to accept the issue of shares, wholly or partly, in lieu of a proposed dividend or proposed future dividends if—

• (a) The right to receive shares, wholly or partly, in lieu of the proposed dividend or proposed future dividends has been offered to all shareholders of the same class on the same terms; and

• (b) If all shareholders elected to receive the shares in lieu of the proposed dividend, relative voting or distribution rights, or both, would be maintained; and

• (c) The shareholders to whom the right is offered are afforded a reasonable opportunity of accepting it; and

• (d) The shares issued to each shareholder are issued on the same terms and subject to the same rights as the shares issued to all shareholders in that class who agree to receive the shares; and

• (e) The provisions of section 47 of this Act are complied with by the board.

(1) The board of a company may resolve that the company offer shareholders discounts in respect of some or all of the goods sold or services provided by the company.

(2) The board may approve a discount scheme under subsection (1) of this section only if it has previously resolved that the proposed discounts are—

• (a) Fair and reasonable to the company and to all shareholders; and

• (b) To be available to all shareholders or all shareholders of the same class on the same terms.

(3) A discount scheme may not be approved or continued by the board unless it is satisfied on reasonable grounds that the company satisfies the solvency test.

(4) Subject to subsection (5) of this section, a discount accepted by a shareholder under a discount scheme approved under this section is not a distribution for the purposes of this Act.

(5) Where—

• (a) A discount is accepted by a shareholder under a scheme approved or continued by the board; and

• (b) At the time the scheme was approved or the discount was offered, the board ceased to be satisfied on reasonable grounds that the company would satisfy the solvency test,—

the provisions of section 56 of this Act shall apply in relation to the discount with such modifications as may be necessary as if the discount were a distribution that is deemed not to have been authorised.

(1) A distribution made to a shareholder at a time when the company did not, immediately after the distribution, satisfy the solvency test may be recovered by the company from the shareholder unless—

• (a) The shareholder received the distribution in good faith and without knowledge of the company's failure to satisfy the solvency test; and

• (b) The shareholder has altered the shareholder's position in reliance on the validity of the distribution; and

• (c) It would be unfair to require repayment in full or at all.

(2) If, in relation to a distribution made to shareholders,—

• (a) The procedure set out in section 52 or section 70 or section 77 of this Act, as the case may be, has not been followed; or

• (b) Reasonable grounds for believing that the company would satisfy the solvency test in accordance with section 52 or section 70 or section 77 of this Act, as the case may be, did not exist at the time the certificate was signed,—

a director who—

• (c) Failed to take reasonable steps to ensure the procedure was followed; or

• (d) Signed the certificate, as the case may be,—

is personally liable to the company to repay to the company so much of the distribution as is not able to be recovered from shareholders.

(3) If, by virtue of section 52(3) or section 70(3) or section 77(3) of this Act, as the case may be, a distribution is deemed not to have been authorised, a director who—

• (a) Ceased after authorisation but before the making of the distribution to be satisfied on reasonable grounds for believing that the company would satisfy the solvency test immediately after the distribution is made; and

• (b) Failed to take reasonable steps to prevent the distribution being made,—

is personally liable to the company to repay to the company so much of the distribution as is not able to be recovered from shareholders.

(4) If, by virtue of section 55(5) of this Act, a distribution is deemed not to have been authorised, a director who failed to take reasonable steps to prevent the distribution being made is personally liable to the company to repay to the company so much of the distribution as is not able to be recovered from shareholders.

(5) If, in an action brought against a director or shareholder under this section, the Court is satisfied that the company could, by making a distribution of a lesser amount, have satisfied the solvency test, the Court may—

• (a) Permit the shareholder to retain; or

• (b) Relieve the director from liability in respect of—

an amount equal to the value of any distribution that could properly have been made.

(1) If a company proposes to alter its constitution, or to acquire shares issued by it, or redeem shares under section 69 of this Act, as the case may be, in a manner which would cancel or reduce the liability of a shareholder to the company in relation to a share held prior to that alteration, acquisition, or redemption, the proposed cancellation or reduction of liability is to be treated,—

• (a) For the purposes of section 52 of this Act, as if it were a distribution; and

• (b) For the purposes of subsections (2) and (3) of section 53 of this Act, as if it were a dividend.

(2) If a company has altered its constitution, or acquired shares, or redeemed shares under section 69 of this Act, as the case may be, in a manner which cancels or reduces the liability of a shareholder to the company in relation to a share held prior to that alteration, acquisition, or redemption, that cancellation or reduction of liability is to be treated for the purposes of section 56 of this Act as a distribution of the amount by which that liability was reduced.

(3) If the liability of a shareholder of an amalgamating company to that company in relation to a share held before the amalgamation is—

• (a) Greater than the liability of that shareholder to the amalgamated company in relation to a share or shares into which that share is converted; or

• (b) Cancelled by the cancellation of that share in the amalgamation,—

the reduction of liability effected by the amalgamation is to be treated for the purposes of section 56(1) and (5) of this Act as a distribution by the amalgamated company to that shareholder, whether or not that shareholder becomes a shareholder of the amalgamated company of the amount by which that liability was reduced.

(1) A company may, in accordance with sections 59 to 66, section 107, and sections 110 to 112 of this Act, but not otherwise, acquire its own shares.

(2) Shares acquired by a company otherwise than in accordance with sections 59 to 66 and 110 to 112 of this Act are deemed to be cancelled immediately on acquisition.

(3) Within 10 working days of the purchase or acquisition of the shares, the board of the company must ensure that notice in the prescribed form of the purchase or acquisition is delivered to the Registrar for registration.

(4) If the board of a company fails to comply with subsection (3) of this section, every director of the company commits an offence and is liable on conviction to the penalty set out in section 374(2) of this Act.

(1) Subject to section 52 of this Act, a company may purchase or otherwise acquire shares issued by it if it is expressly permitted to do so by its constitution.

(2) The purchase or acquisition of the shares must be made in accordance with section 60 or section 63 or section 65 of this Act.

(3) Nothing in this section or in sections 60 to 67 of this Act limits or affects—

• (a) An order of the Court that requires a company to purchase or acquire its own shares; or

• (b) Sections 110 and 118 of this Act (which relate to the right of a shareholder to require a company to purchase shares).

(1) The board of a company may make an offer to acquire shares issued by the company if the offer is—

• (a) An offer to all shareholders to acquire a proportion of their shares, that—

  • (i) Would, if accepted, leave unaffected relative voting and distribution rights; and

  • (ii) Affords a reasonable opportunity to accept the offer; or

• (b) An offer to one or more shareholders to acquire shares—

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

  • (ii) That is expressly permitted by the constitution, and is made in accordance with the procedure set out in section 61 of this Act.

(2) Where an offer is made in accordance with subsection (1)(a) of this section,—

• (a) The offer may also permit the company to acquire additional shares from a shareholder to the extent that another shareholder does not accept the offer or accepts the offer only in part; and

• (b) If the number of additional shares exceeds the number of shares that the company is entitled to acquire, the number of additional shares shall be reduced rateably.

(3) The board may make an offer under subsection (1) of this section only if it has previously resolved—

• (a) That the acquisition in question is in the best interests of the company; and

• (b) That the terms of the offer and the consideration offered for the shares are fair and reasonable to the company; and

• (c) That it is not aware of any information that will not be disclosed to shareholders—

  • (i) Which is material to an assessment of the value of the shares; and

  • (ii) As a result of which the terms of the offer and consideration offered for the shares are unfair to shareholders accepting the offer.

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

(5) The directors who vote in favour of a resolution required by subsection (3) of this section must sign a certificate as to the matters set out in that subsection, and may combine it with the certificate required by section 52 of this Act and any certificate required under section 61 of this Act.

(6) The board of a company must not make an offer under subsection (1) of this section if, after the passing of a resolution under subsection (3) of this section and before the making of the offer to acquire the shares,—

• (a) The board ceases to be satisfied that the acquisition in question is in the best interests of the company; or

• (b) The board ceases to be satisfied that the terms of the offer and the consideration offered for the shares are fair and reasonable to the company; or

• (c) The board becomes aware of any information that will not be disclosed to shareholders—

  • (i) Which is material to an assessment of the value of the shares; or

  • (ii) As a result of which the terms of the offer and consideration offered for the shares would be unfair to shareholders accepting the offer.

(7) Every director who fails to comply with subsection (5) of this section commits an offence and is liable on conviction to the penalty set out in section 373(1) of this Act.

(1) The board may make an offer under section 60(1)(b)(ii) of this Act only if it has previously resolved—

• (a) That the acquisition is of benefit to the remaining shareholders; and

• (b) That the terms of the offer and the consideration offered for the shares are fair and reasonable to the remaining shareholders.

(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) of this section must sign a certificate as to the matters set out in that subsection.

(4) A board must not make an offer under section 60(1)(b)(ii) of this Act if, after the passing of a resolution under subsection (1) of this section and before the making of the offer to acquire the shares, the board ceases to be satisfied that—

• (a) The acquisition is of benefit to the remaining shareholders; or

• (b) The terms of the offer and the consideration offered for the shares are fair and reasonable to the remaining shareholders.

(5) Before an offer is made pursuant to a resolution under subsection (1) of this section, the company must send to each shareholder a disclosure document that complies with section 62 of this Act.

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

(7) Nothing in subsections (5) and (6) applies to an offer to a shareholder by a company if—

• (a) the company is a party to a listing agreement with a registered exchange (within the meaning of section 2(1) of the Securities Markets Act 1988); and

• (b) the offer is to acquire fewer of the shares quoted on the registered exchange's market than is the minimum holding of shares in the company determined by that exchange.

(8) A shareholder or the company may apply to the Court for an order restraining the proposed acquisition on the grounds that—

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

• (b) The terms of the offer and the consideration offered for the shares are not fair and reasonable to the company and remaining shareholders.

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

(10) If a company fails to comply with subsection (5) of this section,—

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

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

For the purposes of section 61 of this Act, a disclosure document is a document that sets out—

• (a) The nature and terms of the offer, and if made to specified shareholders, to whom it will be made; and

• (b) The nature and extent of any relevant interest of any director of the company in any shares the subject of the offer; and

• (c) The text of the resolution required by section 61 of this Act, 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 acquisition.

(1) The board of a company may make offers on on one or more stock exchanges to all shareholders to acquire shares only if it has previously resolved—

• (a) To acquire, by means of offers on on one or more stock exchanges to all shareholders, not more than a specified number of shares; and

• (b) That the acquisition is in the best interests of the company and its shareholders; and

• (c) That the terms of the offer and the consideration offered for the shares are fair and reasonable to the company and its shareholders; and

• (d) That it is not aware of any information that will not be disclosed to shareholders—

  • (i) Which is material to an assessment of the value of the shares; and

  • (ii) As a result of which the terms of the offer and consideration offered for the shares are unfair to shareholders accepting the offer.

(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) of this section must sign a certificate as to the matters set out in that subsection and may combine it with the certificate required by section 52 of this Act.

(3A) Offers may be made under subsection (1) of this section by any director or employee of the company who is authorised to do so by the resolution of the board under that subsection.

(4) An offer must not be made under subsection (1) of this section if the number of shares to be acquired together with any shares already acquired would exceed the maximum number of shares the board has resolved to acquire under that subsection.

(5) An offer must not be made under subsection (1) of this section if, after the passing of a resolution under that subsection and before the making of the offer to acquire the shares,—

• (a) The board ceases to be satisfied that the acquisition is in the best interests of the company and its shareholders; or

• (b) The board ceases to be satisfied that the terms of the offer and the consideration offered for the shares are fair and reasonable to the company and its shareholders; or

• (c) The board becomes aware of any information that will not be disclosed to shareholders—

  • (i) Which is material to an assessment of the value of the shares; or

  • (ii) As a result of which the terms of the offer and consideration offered for the shares would be unfair to shareholders accepting the offer.

(6) Before an offer is made pursuant to a resolution under subsection (1) of this section, the company must send to each shareholder a disclosure document that complies with section 64 of this Act.

(7) The offer must be made not less than 10 working days and not more than 12 months after the disclosure document has been sent to each shareholder.

(8) A shareholder or the company may apply to the Court for an order restraining the proposed acquisition on the grounds that—

• (a) It is not in the best interests of the company or the shareholders; or

• (b) The terms of the offer and, if it is disclosed, the consideration offered for the shares are not fair and reasonable to the company or the shareholders.

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

(10) If the board of a company fails to comply with subsection (5) of this section, every director of the company commits an offence and is liable on conviction to the penalty set out in section 374(1) of this Act.

(1) For the purposes of section 63 of this Act, a disclosure document is a document that sets out—

• (a) The maximum number of shares that the board has resolved to acquire under section 63(1) of this Act; and

• (b) The nature and terms of the offer; and

• (c) The nature and extent of any relevant interest of any director of the company in any shares that may be acquired; and

• (d) The text of the resolution required by section 63(1) of this Act, 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 acquisition.

(2) Nothing in subsection (1) of this section requires the disclosure of the consideration the board proposes to offer to acquire the shares.

(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 percent 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) Within 3 months after the shares are acquired, the company must send to each shareholder a notice containing the particulars referred to in subsection (2) of this section.

(2B) Acquisitions may be made under subsection (1) of this section 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) or subsection (2A) of this section,—

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

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

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

(2) Shares are acquired for the purposes of subsection (1) of this section 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 of this Act.

(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 section 52 of this Act.

(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 of this Act.

(3) Until the company has fully performed a contract referred to in subsection (1) of this section, 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.

(1) Shares acquired by a company pursuant to section 59 or section 112 of this Act shall not be deemed to be cancelled under section 66(1) of this Act 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 percent of the shares of that class previously issued by the company, excluding shares previously deemed to be cancelled under section 66(1) of this Act.

(2) Shares acquired by a company pursuant to section 59 or section 112 of this Act 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) of this section 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.

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

(2) Without limiting subsection (1) of this section, while a company holds a share in itself pursuant to section 67A of this Act, 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.

(1) Subject to subsection (2) of this section, section 47 of this Act 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 of this Act.

(2) Section 47(2) of this Act 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) of this section, 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 percent of the company's shares is to be made.

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.

(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 one 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 of this Act.

(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) of this section must sign a certificate as to the matters set out in that subsection and may combine it with the certificate required by section 70 of this Act and any certificate required by section 71 of this Act.

(5) A company must not exercise an option to redeem shares under subsection (1) of this section 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) of this section commits an offence and is liable on conviction to the penalty set out in section 373(1) of this Act.

(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 of this Act.

(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) of this section 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 of this Act, 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) of this section commits an offence and is liable on conviction to the penalty set out in section 373(1) of this Act.

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

(1) A company may exercise an option to redeem shares under section 69(1)(b)(ii) of this Act 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) of this section 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) of this Act if, after the passing of a resolution under subsection (1) of this section 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) of this section, the company must send to each shareholder a disclosure document that complies with section 72 of this Act.

(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) of this section commits an offence and is liable on conviction to the penalty set out in section 373(1) of this Act.

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

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

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

For the purposes of section 71 of this Act, 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 of this Act, 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.

(1) Shares that are redeemed by a company pursuant to section 69 of this Act 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 of this Act.

(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 of this Act; but

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

(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 of this Act; but

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

(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) of this section; and—

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

• (b) The procedure set out in section 78 of this Act is followed; or

• (c) The financial assistance is given in accordance with section 80 of this Act.

(2) A company may give financial assistance under subsection (1) of this section 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) of this section 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 of this Act and any certificate required under section 78 of this Act.

(5) A company must not give financial assistance under subsection (1) of this section if, after the passing of a resolution under subsection (2) of this section 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) of this section commits an offence and is liable on conviction to the penalty set out in section 373(1) of this Act.

(1) A company must not give any financial assistance under section 76 of this Act 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) of this section 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) of this section commits an offence and is liable to the penalty set out in section 373(1) of this Act.

(5) The provisions of section 56 of this Act 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,—

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

(1) Financial assistance may be given under section 76(1)(b) of this Act 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) of this section 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) of this Act if, after the passing of a resolution under subsection (1) of this section 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) of this Act, the company must send to each shareholder a disclosure document that complies with section 79 of this Act.

(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) of this section commits an offence and is liable on conviction to the penalty set out in section 373(1) of this Act.

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

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

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

For the purposes of section 78 of this Act, 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) of this Act, 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.

(1) Financial assistance may be given under section 76(1)(c) of this Act, 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 percent 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) of this section,—

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

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

(1) Failure to comply with section 76 or section 78 or section 79 or section 80 of this Act 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.

(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) of this section, 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) of this section, 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.

(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) of this section,—

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

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

(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) of this Act.

(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) of this section, 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) of this section,—

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

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

(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.

(2) Subject to subsection (1) of this section, 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 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) of this Act; and

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

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

(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.