Plain language law

New Zealand law explained for everyone

Companies Act 1993

Shares and debentures

36: Rights and powers attaching to shares

You could also call this:

“What you can do and get as a shareholder”

When you own a share in a company, you get certain rights. You can vote at company meetings on important decisions. These include choosing directors, deciding on company rules, making big changes, joining with other companies, or closing the company down. Each share usually gives you one vote.

You also get to share in the company’s profits. If the company decides to give out money (called dividends), you get an equal part for each share you own. If the company closes and has money left over, you get an equal share of that too.

However, these rights can be changed. The company’s rules (called a constitution) or the terms when you got the share can change these rights. They might take away some rights, change them, or give you new ones. There are special rules in section 53 about how this can happen. The changes might come from section 41(b), section 42, section 44, or section 107(2) of the law.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM320143.

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35: Legal nature of shares, or

“What shares are and how you can own them”

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37: Types of shares, or

“Companies can issue different types of shares with varying rights and features”

Part 6 Shares and debentures

36Rights and powers attaching to shares

  1. Subject to subsection (2), a share in a company confers on the holder—

  2. the right to 1 vote on a poll at a meeting of the company on any resolution, including any resolution to—
    1. appoint or remove a director or auditor:
      1. adopt a constitution:
        1. alter the company's constitution, if it has one:
          1. approve a major transaction:
            1. approve an amalgamation of the company under section 221:
              1. put the company into liquidation:
              2. the right to an equal share in dividends authorised by the board:
                1. the right to an equal share in the distribution of the surplus assets of the company.

                  1. Subject to section 53, the rights specified in subsection (1) may be negated, altered, or added to by the constitution of the company or in accordance with the terms on which the share is issued under section 41(b) or section 42 or section 44 or section 107(2), as the case may be.

                  Notes
                  • Section 36(2): amended, on , by section 3 of the Companies Act 1993 Amendment Act 2001 (2001 No 18).
                  • Section 36(2): amended, on , by section 2 of the Companies Act 1993 Amendment Act 1997 (1997 No 27).
                  • Section 36(2): amended, on , by section 4 of the Companies Act 1993 Amendment Act 1994 (1994 No 6).