Shareholder Agreements Nz

The regulation and management of New Zealand businesses is governed primarily by the Companies Act 1993. Some of the requirements of the Companies Act are mandatory (for example. B the obligations of directors to act in good faith in the interest of the company and not to act recklessly). Certain provisions of the Companies Act may be adapted to the circumstances. Amendments and additions to the provisions of the Law on Shares are made through the adoption of a Constitution by the shareholders. The Constitution is registered with the Companies Office and is an authentic deed. A provision often contained in a Constitution is the requirement that a shareholder who wishes to sell shares must first offer them to existing shareholders. Otherwise, a shareholder is free to pass on his shares to whoever he transfers. The role of a shareholders` agreement is to define the obligations of each shareholder and to protect their respective rights. A shareholders` agreement reduces the risk of misunderstandings between shareholders and ensures that shareholders deal with important issues early in the relationship, such as an exit strategy and corporate financing. This agreement deals with issues relating to the management of the company and the relations between shareholders (e.g.B.

The right to appoint directors, matters requiring the agreement of directors appointed by investors, the provision of financial information, confidentiality rules, etc.). Think about the need for a shareholders` agreement – in some cases, a shareholders` agreement is not necessary, as the essential requirements of the company can be included in the articles of association (for example.B. Preferential rights and tag along and drag-along rights). The good news is that it`s not too late to enter into a shareholders` agreement, even if your business is already in business. As you can see in Susan/Nancy`s situation, a shareholders` agreement can be invaluable to any company, regardless of its size or industry. It doesn`t have to be complex and can be tailored to your company`s specific situation. It`s like those who establish a “pre-nup” relationship, it can pay off to set rules in advance. If your business has more than one shareholder, you should generally have a shareholders` agreement. In addition to a statute, shareholders could sign a shareholder agreement. The shareholders` agreement is a private document which, unlike the Constitution, is not available to the public. The shareholders` agreement may therefore cover issues that the shareholders do not wish to publish or that are thus better covered. It can deal with issues before the establishment of the enterprise, while the Constitution governs the enterprise only after its creation.

In the absence of a shareholders` agreement, as long as the directors and the company comply with the Law on Shares and the Constitution, the shareholders do not necessarily have a say in the decisions of the director and in how the company is managed. A shareholders` agreement generally deals with the following: this agreement does not contain any mechanism to impose the settlement of a dispute between shareholders, for example. B by requiring that the company be sold and dissolved in the event of a major dispute between shareholders. . . .

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