Plain language law

New Zealand law explained for everyone

Local Government Act 2002

Preliminary provisions

6: Meaning of council-controlled organisation and council organisation

You could also call this:

"What it means for a company to be controlled by a local council"

Illustration for Local Government Act 2002

When you hear the term council-controlled organisation, it means a company or group that a local council controls. A local council controls a company if it owns most of the company's shares or can choose most of its directors. You can find more information about what a council-controlled organisation is in the Local Government (Water Services) Act 2025.

A council organisation is a company or group that a local council has a lot of control over. This can be because the council owns most of the company's shares or can choose most of its directors. It can also be because the council has a lot of influence over the company's decisions.

There are some types of organisations that are not considered council-controlled organisations, such as companies that supply electricity or companies that manage ports. You can find more information about these types of organisations in the Energy Companies Act 1992 and the Port Companies Act 1988.

If you want to know more about what a company is, you can look at the Companies Act 1993.

This text is automatically generated. It might be out of date or be missing some parts. Find out more about how we do this.

This page was last updated on

View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM171482.

Topics:
Government and voting > Local councilsBusiness > Industry rules
Previous

5A: Temporary definition of public notice as result of outbreak of COVID-19, or

"This old rule about telling people things during COVID-19 is no longer used"

Next

7: Exempted organisations, or

"Some organisations can be excused from following certain rules"

Part 1Preliminary provisions

6Meaning of council-controlled organisation and council organisation

  1. In this Act, unless the context otherwise requires, council-controlled organisation means a council organisation that is—

  2. a company—
    1. in which equity securities carrying 50% or more of the voting rights at a meeting of the shareholders of the company are—
      1. held by 1 or more local authorities; or
        1. controlled, directly or indirectly, by 1 or more local authorities; or
        2. in which 1 or more local authorities have the right, directly or indirectly, to appoint 50% or more of the directors of the company; or
        3. an entity in respect of which 1 or more local authorities have, whether or not jointly with other local authorities or persons,—
          1. control, directly or indirectly, of 50% or more of the votes at any meeting of the members or controlling body of the entity; or
            1. the right, directly or indirectly, to appoint 50% or more of the trustees, directors, or managers (however described) of the entity.

            2. In addition, council-controlled organisation includes a water organisation within the meaning of section 4 of the Local Government (Water Services) Act 2025 if—

            3. the organisation is owned by 1 or more local authorities; or
              1. the organisation is owned by 1 or more local authorities (and those local authorities hold 50% or more of the shares and voting rights in the organisation) and the trustees of 1 or more consumer trusts.

                1. In this Act, unless the context otherwise requires,—

                  council-controlled trading organisation—

                  1. means a council-controlled organisation that operates a trading undertaking for the purpose of making a profit; but
                    1. excludes a water organisation within the meaning of section 4 of the Local Government (Water Services) Act 2025

                      council organisation means—

                      1. a company—
                        1. in which equity securities carrying voting rights at a meeting of the shareholders of the company are—
                          1. held by 1 or more local authorities; or
                            1. controlled, directly or indirectly, by 1 or more local authorities; or
                            2. in which 1 or more local authorities have the right, directly or indirectly, to appoint 1 or more of the directors (however described) of the company; or
                            3. an entity in respect of which 1 or more local authorities have, whether or not jointly with other local authorities or persons,—
                              1. control, directly or indirectly, of 1 or more of the votes at any meeting of the members or controlling body of the entity; or
                                1. the right, directly or indirectly, to appoint 1 or more of the trustees, directors, or managers (however described) of the entity.

                              2. For the purposes of subsection (1), entity means any partnership, trust, arrangement for the sharing of profits, union of interest, co-operation, joint venture, or other similar arrangement; but does not include a company, or a committee or joint committee of a local authority.

                              3. If a council organisation is not a company, references in this Act, in relation to the council organisation, to—

                              4. equity securities include any form of voting rights in that organisation; and
                                1. the directors and the board include trustees, managers, or office holders (however described in that organisation); and
                                  1. shareholders include any persons with an interest or right in the entity that is comparable to the rights of a shareholder in a company, for example, partners, joint venture partners, members, or other persons holding equity securities in relation to that organisation; and
                                    1. the constitution include any rules or other documents constituting that organisation or governing its activities; and
                                      1. subsidiaries include any entity that would be a council-controlled organisation if the references to local authority or local authorities in subsection (1) read council-controlled organisation or council-controlled organisations.

                                        1. The following entities are not council-controlled organisations:

                                        2. a body corporate that carries on an electricity business (whether or not that business is its principal or only business) or a trust that is constituted for purposes which include owning or controlling, directly or indirectly, all or part of an electricity company that carries on that business; or
                                          1. an energy company within the meaning of the Energy Companies Act 1992; or
                                            1. a port company or subsidiary of a port company within the meaning of the Port Companies Act 1988; or
                                              1. a company in which a port company (within the meaning of the Port Companies Act 1988) holds or controls 50% of the shares; or
                                                  1. New Zealand Local Government Association Incorporated; or
                                                    1. New Zealand Local Government Insurance Corporation Limited and its subsidiaries; or
                                                        1. a company or other organisation (as defined in subsection (2)) of which the New Zealand Local Government Association Incorporated has control directly or indirectly by whatever means; or
                                                          1. an organisation exempted under section 7.

                                                            1. In this section, terms not defined in this Act, but defined in the Companies Act 1993, have the same meaning as in that Act.

                                                            Compare
                                                            Notes
                                                            • Section 6(1AAA): inserted, on , by section 39(1) of the Local Government (Water Services) (Repeals and Amendments) Act 2025 (2025 No 43).
                                                            • Section 6(1AAB): inserted, on , by section 39(1) of the Local Government (Water Services) (Repeals and Amendments) Act 2025 (2025 No 43).
                                                            • Section 6(1) council-controlled organisation: repealed, on , by section 39(2) of the Local Government (Water Services) (Repeals and Amendments) Act 2025 (2025 No 43).
                                                            • Section 6(1) council-controlled trading organisation: replaced, on , by section 39(3) of the Local Government (Water Services) (Repeals and Amendments) Act 2025 (2025 No 43).
                                                            • Section 6(1) council organisation paragraph (a)(ii): amended, on , by section 3(2) of the Local Government Act 2002 Amendment Act 2004 (2004 No 63).
                                                            • Section 6(1) council organisation paragraph (b): amended, on , by section 3(3) of the Local Government Act 2002 Amendment Act 2004 (2004 No 63).
                                                            • Section 6(1) council organisation paragraph (b)(i): amended, on , by section 3(3) of the Local Government Act 2002 Amendment Act 2004 (2004 No 63).
                                                            • Section 6(1) council organisation paragraph (b)(ii): amended, on , by section 3(3) of the Local Government Act 2002 Amendment Act 2004 (2004 No 63).
                                                            • Section 6(2): amended, on , by section 3(4) of the Local Government Act 2002 Amendment Act 2004 (2004 No 63).
                                                            • Section 6(3)(c): replaced, on , by section 5 of the Local Government Act 2002 Amendment Act 2019 (2019 No 54).
                                                            • Section 6(4)(a): substituted, on , by section 166 of the Electricity Industry Act 2010 (2010 No 116).
                                                            • Section 6(4)(ca): inserted, on , by section 3(5) of the Local Government Act 2002 Amendment Act 2004 (2004 No 63).
                                                            • Section 6(4)(d): repealed, on , by section 48(1)(b) of the Local Government (Auckland) Amendment Act 2004 (2004 No 57).
                                                            • Section 6(4)(g): repealed, on , by section 113(2) of the Local Government (Auckland Transitional Provisions) Act 2010 (2010 No 37).