Selling shares in private company nz

Possible issues with selling shares in a private company

The method of buying and selling shares in a company will depend on a number of factors. In particular it depends on whether the company is a publicly listed company. If the company is publicly listed, its shares will be listed on the stock exchange and different rules apply to the sale and purchase of the shares.

How To Sell And Transfer Shares In A UK Private Company

If the company is a private company, the rules about buying and selling shares are set out in the company's constitution and in the COMPANIES ACT It is quite usual for a company's constitution to contain "pre-emption" rights for existing shareholders, requiring existing shares to first be offered to the existing shareholders before they can be offered to non-shareholders.

The purpose is to maintain the ranking of existing shareholders so that their voting and distribution rights are not diminished.

The COMPANIES ACT also provides for existing shareholders to have pre-emptive rights over the issuing of new shares by the company. The Act states that any new shares must first be offered to existing shareholders on a proportional basis so that the shareholders' existing voting and distribution rights are maintained.

The offer to the existing shareholders must remain open for a reasonable time. However, it is open for the company's constitution to negate, limit or modify this statutory pre-emptive right over new shares. A company is permitted to buy its own shares if certain requirements are met. Aside from some special situations such as where dissenting shareholders exercise "minority buy-out" rightsthe COMPANIES ACT gives company boards a general power to make offers to existing shareholders to buy their shares, provided the following requirements are met.

The board of directors open market currency karachi make an offer to buy shares unless this is permitted by the company's constitution.

Stock ruger 10 22 so, the board may make an offer to all shareholders to buy a proportion of their shares, in such a way that the acquisition would maintain each shareholder's relative voting bond market holiday calendar 2016 distribution rights.

Alternatively, the board may make a special offer to one or more shareholders to acquire their shares, provided all shareholders have consented to this or the offer is permitted under the constitution.

When a valid transfer intraday trading strategies for nifty options shares has taken place, the company is obliged to register the transfer in its share register. The entry of the buyer's name is evidence of that person's legal title.

For information on the share register, see related article How to maintain a company share register. Selling shares in private company nz HowToLaw searchable document database is the leading legal document search engine available. Terms of Service - Web Site by eDIY. Countries New Zealand Australia England U.

HowTo buy & Sell Shares in a Private Company

Home NZ Documents Australian Documents NZ HowTo Articles Find a NZ Lawyer. Protection of existing shareholders through "pre-emption" rights It is quite usual for a company's constitution to contain "pre-emption" rights for existing shareholders, requiring existing shares to first be offered to the existing shareholders before they can be offered to non-shareholders. Company may buy its own shares in certain circumstances A company is permitted to buy its own shares if certain requirements are met.

The board may not offer to buy shares unless it has passed a resolution stating: Cautionary notes It is critical that any sale meets the requirements of both the company's constitution and the COMPANIES ACT To ensure that this is done, it is strongly recommended that you seek legal advice from a company law specialist.

Your legal adviser will also advise you as to the terms of the agreement for the sale and purchase of the shares. If you are buying shares, your lawyer will advise you as to: They can assist you in ensuring that the correct procedure is followed for determining the price and that the price is appropriate. DIY self-help legal documents Solve your own legal issue cost effectively with these DIY documents Company sale agreement: Agreement for sale and purchase of shares.

Agreement for sale and purchase of shares and current account.