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Companies

This publication guides practitioners through establishing, running, and dissolving a company.

1 Matter Plan

Overview

The commentary covers topics like shareholders' voting rights, the appointment of directors, and the sale of company assets. It also provides specific guidance on drag-along and tag-along clauses, financing, and shareholder funding arrangements, along with an overview of insolvency.

The Reference materials folder includes guidance on electronic signing and remote witnessing, and the Getting the matter underway folder contains essential compliance and client engagement documents. The comprehensive Retainer Instructions ensure that all necessary information is gathered from the client at the outset of the matter.

The Business structures and the comparative table guide provides a comparison of the pros and cons of different business structures..

Precedents in this publication include:

  • Letters for clients and shareholders;
  • Shareholder agreements – concise and extensive forms;
  • Agreements for share sales, transfers and options;
  • Library of minutes and resolutions;
  • Library of precedents for small businesses.
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1 Matter Plan Included

  • Item icon ALERTS - Nil
  • Item icon Full Commentary - Companies
  • Folder icon Reference materials
    • Item icon AI Prompts
    • Item icon Electronic Signing and Witnessing
    • Item icon Business Structures and the Comparative Table
    • Item icon Further information
      Other trusted and useful resources

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  • Item icon Overview
    A company is a construct of the law, an artificial person that never dies except by the hand of its shareholders, or government intervention. Under s 15 of the Companies Act 1993, a company is a distinct legal entity with rights and obligations entirely separate from its shareholders, ...

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  • Folder icon A. Getting the matter underway
    • Item icon File cover sheet - Companies
    • Item icon To do list - Companies
    • Item icon First steps
    • Item icon Client details and verifying identity
    • Item icon Retainer instructions - Companies - Incorporation
    • Item icon Retainer instructions - Companies - Dispute
    • Item icon Conflict of interest check
    • Item icon Initial letter to client with terms of engagement and retainer agreement - Companies
    • Item icon Client Care and Terms of Engagement
    • Item icon Scope of work - Incorporation
    • Item icon Scope of work - Share sale
    • Item icon Initial letter to company which has received a statutory demand
    • Item icon Enclosure - The effects of winding up
    • Item icon Time and costs estimates
    • Folder icon If required - Updating costs disclosure
      • Item icon Letter to client updating costs estimate
    • Folder icon General deeds, agreements, execution clauses and statutory declaration
      • Item icon Deeds and Agreements
      • Folder icon Deeds
        • Item icon Deed for general use
        • Item icon Deed of guarantee
        • Item icon Deed of release
        • Item icon Confidentiality deed
        • Item icon General deed of indemnity
        • Item icon Deed of assignment of agreement
        • Item icon Deed of gift
      • Folder icon Agreements
        • Item icon Agreement for general use
        • Item icon Heads of agreement
        • Item icon Non-disclosure agreement - Formal
        • Item icon Non-disclosure agreement - Informal
      • Folder icon Library of clauses for deeds and agreements
        • Item icon Amendment clause
        • Item icon Confidentiality clause for defined information - All parties
        • Item icon Confidentiality clause for defined information - One party
        • Item icon Confidentiality clause for terms of agreement - All parties
        • Item icon Confidentiality clause for terms of agreement - One party
        • Item icon Costs clause
        • Item icon Counterparts clause
        • Item icon Dispute resolution clause
        • Item icon Events beyond control clause
        • Item icon Governing law and jurisdiction clause
        • Item icon Interpretation clause
        • Item icon No assignment clause
        • Item icon Notices clause
        • Item icon Severance clause
        • Item icon Waiver clause
        • Item icon Whole agreement clause
      • Folder icon Execution clauses
        • Item icon Execution clauses - Agreements
        • Item icon Execution clauses - Deeds
      • Folder icon Statutory declaration
        • Item icon Statutory declaration
        • Item icon Standard annexure note for documents
  • Folder icon B. Setting up a company
    • Item icon Types of companies
      Three types of companies can be registered:

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    • Item icon Three ways to set up a company
      A person wanting to start a company has 3 options:

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    • Item icon Company name
      The first step is choosing and Reserving a name for a new company with the New Zealand Companies Office. Part 4 of the Companies Act 1993 regulates company names.

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    • Item icon Reserving a name for a new company – New Zealand Companies Office
    • Item icon Governance
      A company’s constitution sets out the rights and responsibilities of a company and its board, directors, and shareholders. The Companies Act 1993 does not require a company to have a constitution.

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    • Item icon Company constitution
    • Item icon Registered office
      A company must have a registered office and an address for service: s 12 of the Companies Act 1993. These can be different addresses. A company must always have a registered office in New Zealand: s 186.

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    • Item icon Officers
      A company’s officers must be listed in a company’s application for registration, including their full address, date, and place of birth. A company requires a minimum of one director.

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    • Item icon Required director and shareholder consents
      Each director of a company must give written consent to their appointment in a Consent and Certificate of Director form. Each shareholder must give written consent to take up their shareholding in a Consent of Shareholder to Proposed Company form.

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    • Item icon Directors
      Companies have their own legal personality but can act only through their directors. A director must be a natural person. That is, they must be an individual, not a company or other entity.

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    • Item icon Consent and certificate of director
    • Item icon Consent and certificate of director or directors of proposed company
    • Item icon Share structure
      Part 6 of the Companies Act 1993 regulates the issuing of shares, classes of shares, share rights, and redemption. Companies can issue various types or classes of shares with different rights attached. The different shares and their associated rights are set out in the company’s constitution. ...

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    • Item icon Shareholders
      The following rules apply to shareholders:

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    • Item icon Shareholders agreement - Concise
    • Item icon Shareholders agreement - Extensive
    • Item icon Consent of shareholder of proposed company
    • Item icon Subscription and securityholders agreement
    • Item icon AI Prompt for Letter to client with advice on shareholders agreement
    • Item icon Letter to client with draft shareholders agreement
    • Item icon Letter to client with company documents and requesting appointment
    • Item icon Company registration
      When a company being registered will be controlled by another company, information about the ultimate holding company must be included in the registration application: s 94A of the Companies Act 1993. The meaning of holding company effectively turns on the control of the subject company: ...

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    • Item icon Incorporating a company – New Zealand Companies Office
    • Item icon Register for GST – Inland Revenue
    • Item icon New Zealand business or organisation IRD number application – Inland Revenue
    • Item icon Adding, amending or removing a company constitution – New Zealand Companies Office
    • Item icon Letter to client advising that company has been incorporated
    • Item icon Company records
      A company’s records must be kept at its registered office. Some records need to be kept for seven years: s 189 of the Companies Act 1993. Company records include:

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    • Item icon Register of shareholders
    • Item icon Share certificate
  • Folder icon C. Running a company
    • Item icon Meetings
      Company meetings include:

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    • Item icon Directors’ meetings
      Directors’ meetings only involve the company’s directors. The Companies Act 1993 does not include specific provisions for the conduct of directors’ meetings. A company’s constitution may prescribe a process for directors’ meetings.

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    • Item icon Shareholders meetings
      Shareholder meetings involve all the shareholders. Directors may be required to attend a general meeting.

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    • Item icon Letter to shareholders enclosing notice of meeting
    • Item icon Notice of meeting and proxy voting form
    • Item icon Minutes of meetings
      A company must keep its minute books at its registered office or principal place of business. Minute books provide a record of:

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    • Folder icon Library of minutes
      • Item icon Minutes of company meeting
      • Item icon Minutes of directors meeting
      • Item icon Minutes of company meeting - approving transfer of shares
    • Item icon Resolutions
      Resolutions are decisions made by the company’s board or its shareholders at meetings. Resolutions are proposed and voted on at meetings. The outcomes are recorded in the minutes.

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    • Folder icon Library of resolutions
      • Item icon Company resolution
      • Item icon Company resolution - approving transfer of shares
      • Item icon Company resolution in lieu of meeting
    • Item icon Authority and execution
      Authority to bind the company Section 180 of the Companies Act 1993 sets out who can enter a contract or any other enforceable obligation on behalf of a company. This includes an agent duly authorised to make contracts under the company’s constitution.

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    • Item icon Director guarantee
    • Item icon Powers of attorney
      A company may appoint an attorney pursuant to s 181 of the Companies Act 1993. Any act of an attorney binds the company.

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    • Item icon General power of attorney
    • Folder icon Library of clauses for power of attorney
      • Item icon Company appointing an attorney to conduct the business of the company
      • Item icon Company appointing an attorney to execute documents
      • Item icon Director appointing a substitute during absence
      • Item icon Discharge of mortgage
      • Item icon Mortgage
      • Item icon Purchase of real property
      • Item icon Sale of real property
    • Item icon Financial records
      Directors are responsible for maintaining the company’s financial records and providing them to the company’s auditors. This applies even when the records are maintained by someone else, such as an accountant. To facilitate accurate financial statements, directors must ensure that a company’s ...

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    • Item icon Getting money out of the company
      A company’s owners can take money out of a company through:

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    • Item icon Changes to company details
      The New Zealand Companies Office must be notified of changes to a company’s details. Some changes can be made online on the Companies Register.

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    • Item icon Keeping company details up to date – New Zealand Companies Office
    • Item icon Resignation as a director
    • Folder icon If required - Library of precedents for small business clients
      • Item icon Agreement for supply of goods and services
      • Item icon Credit application
      • Item icon Dispatch and delivery policy
      • Item icon Example tax invoice
      • Item icon Liability waiver and consent
      • Item icon Privacy policy
      • Item icon Returns and refund policy
      • Item icon Terms of trade
      • Item icon Website terms of use for advertising and booking personal services
      • Item icon Website terms of use for downloadable online products
      • Item icon Website terms of use for physical products
  • Folder icon D. Buying, selling and issuing shares
    • Item icon Buying, selling, and issuing shares
      Shareholders may sell or transfer their shares at any time, subject to a company’s constitution and any shareholders agreement. Shares may also be:

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    • Item icon Agreement for sale of shares - Concise
    • Item icon Agreement for sale of shares - Extensive - Company takeover
    • Item icon Subscription and securityholders agreement
    • Item icon Deed of trust for purchase of shares by trustee
    • Item icon Transfer of shares
    • Item icon Share certificate
    • Item icon Director guarantee
    • Item icon Keeping company details up to date – New Zealand Companies Office
    • Folder icon Library of option precedents
      • Item icon Letter to purchaser's lawyer exercising option
      • Item icon Letter to vendor's lawyer exercising option
      • Item icon Notice of appointment of nominee
      • Item icon Notice of exercise of call option
      • Item icon Notice of exercise of option to purchase
      • Item icon Notice of exercise of put option
      • Item icon Option to purchase shares agreement
      • Item icon Put and call option agreement
  • Folder icon E. Company disputes
    • Item icon Company disputes
      Disputes arise within companies and between companies and other parties. Companies can become involved in litigation when:

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    • Item icon Before commencing proceedings
      Before starting any action in a company dispute, a lawyer needs to fully understand the client’s position and consider paths to resolution.

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    • Item icon Letter to client requesting relevant documents
    • Item icon Letter to director requesting company records
    • Item icon Letter to director requesting inspection of company minutes
    • Item icon Letter to director advising of intention to seek an order to inspect company records
    • Item icon Commencing proceedings
      The appropriate originating process for proceedings in the High Court of New Zealand is set out in the High Court Rules 2016.

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    • Item icon Proceedings involving deregistered companies
      A deregistered company cannot be a party in legal proceedings. Under s 321 of the Companies Act 1993, notice may be given of an objection to removing a company that is a party to legal proceedings from the New Zealand Companies Office’s Companies Register.

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  • Folder icon F. Winding up and deregistration
    • Item icon Winding up
      Insolvent company Insolvent companies may be wound up involuntarily or voluntarily.

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    • Item icon Removal from the Companies Register
      Removal of a company from the Companies Register effectively completes deregistration of the company. The duties of a company’s officers end at the point of removal from the register.

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    • Item icon Removing your company from the register – New Zealand Companies Office
    • Item icon Application for removal from New Zealand register
  • Folder icon G. Finalising the matter
    • Item icon Finalising the matter
      When finalising an incorporation the client should be made aware of their ongoing obligations, such as filing annual returns. Any original documents held on file should be returned to the client or arrangements made to secure them in safe custody.

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    • Item icon Letter to client finalising the matter
    • Item icon Example invoice
    • Item icon Invoice recital - Incorporation
    • Item icon Invoice recital - Share sale
    • Item icon Closing the file
    • Item icon File closing checklist
  • Item icon Comments and suggestions for By Lawyers

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