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Companies Act 1993

Shares and debentures - Issue of shares

48: Exceptions to section 47

You could also call this:

“When you can issue shares without following the usual rules”

You don’t always need to follow the rules in Section 47 when issuing shares. There are some exceptions to these rules.

You can give out fully paid shares from the company’s reserves to all shareholders who have the same type of shares. You need to give these shares in proportion to how many shares each person already owns.

You can also combine and split up shares, or a specific type of shares, in proportion to how many of those shares exist. This is called consolidation and division.

Lastly, you can divide shares, or a specific type of shares, into smaller parts. This is called subdivision. You need to do this in proportion to the existing shares or the specific type of shares you’re dividing.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM320165.

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Part 6 Shares and debentures
Issue of shares

48Exceptions to section 47

  1. Section 47 does not apply to—

  2. the issue of shares that are fully paid up from the reserves of the company to all shareholders of the same class in proportion to the number of shares held by each shareholder:
    1. the consolidation and division of the shares or any class of shares in the company in proportion to those shares or the shares in that class:
      1. the subdivision of the shares or any class of shares in the company in proportion to those shares or the shares in that class.