Plain language law

New Zealand law explained for everyone

Income Tax Act 2007

Definitions and related matters - Measurement of company ownership

YC 2: Voting interests

You could also call this:

“How to calculate your influence in a company's decisions based on your shareholding”

When you own shares or options in a company, you have a voting interest. This means you have a say in how the company is run.

Your voting interest is usually the same as the percentage of decision-making rights you have in the company. For example, if you own 10% of the shares, you typically have a 10% voting interest.

Sometimes, your decision-making rights might be different for various types of decisions. If this happens, your voting interest is the average of these different percentages.

For instance, if you have 20% say in one type of decision and 30% in another, your voting interest would be 25%.

This rule helps to make sure that your voting interest fairly represents your overall influence in the company’s decisions.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1523060.

Topics:
Money and consumer rights > Taxes
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YC 1: Meaning of control, or

“This section about the meaning of 'control' has been removed and no longer applies”

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YC 3: Market value interests, or

“How much of a company you own based on your shares and options”

Part Y Definitions and related matters
Measurement of company ownership

YC 2Voting interests

  1. A person’s voting interest in a company equals the percentage of the total shareholder decision-making rights for the company carried by shares or options held by the person.

  2. Despite subsection (1), if the percentage of shareholder decision-making rights for a company carried by shares or options held by any person differs as between the types of decision-making listed in the definition of shareholder decision-making right, the person’s voting interest in the company equals the average of those differing percentages.

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