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New Zealand law explained for everyone

Companies Act 1993

Shareholders and their rights and obligations - Minority buy-out rights

112C: Timing of transfer of shares

You could also call this:

“When a company buys your shares and how it affects your shareholder rights”

When the board of a company agrees to buy your shares, a few things happen right away. On the day they tell you they agree to buy your shares, the company becomes the legal owner of those shares. This means you no longer have any rights related to those shares.

Even though the company now owns the shares, there’s a special rule for some parts of the law. When dealing with section 112 and section 112A, you’re still considered the shareholder. This means you’re treated as if you still owned the shares, even though the company has already taken ownership.

This special rule applies even though the company has become the legal owner of the shares. It’s a way to make sure you’re still protected in certain situations, even after you’ve sold your shares to the company.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1624957.

Topics:
Business > Fair trading
Business > Industry rules
Money and consumer rights > Consumer protection
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Part 7 Shareholders and their rights and obligations
Minority buy-out rights

112CTiming of transfer of shares

  1. On the day on which a board gives notice under section 111(2)(e) that the board agrees to the purchase of shares by the company,—

  2. the legal title to those shares passes to the company; and
    1. the rights of the shareholder in relation to those shares end.

      1. However, for the purposes of sections 112 and 112A, shareholder and holder of the shares means the person who held the legal title to the shares immediately before the board gave notice under section 111(2)(e) that the board agrees to the purchase of those shares by the company.

      2. Subsection (2) applies despite subsection (1).

      Notes
      • Section 112C: inserted, on , by section 7 of the Companies (Minority Buy-out Rights) Amendment Act 2008 (2008 No 69).