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New Zealand law explained for everyone

Companies Act 1993

Shares and debentures - Treasury stock

67C: Reissue of shares company holds in itself

You could also call this:

“Rules for a company selling its own shares”

When a company wants to transfer a share it owns of itself, it must follow the same rules as if it were issuing a new share. However, there are some exceptions to this rule.

If the company transfers the share using a system that’s approved under the Financial Markets Conduct Act, it doesn’t have to follow all the usual rules for issuing shares.

The company’s own rules (called its constitution) might say something different about transferring these shares. If it does, the company needs to follow those rules.

There are times when a company isn’t allowed to give someone the option to buy a share it owns of itself. This happens when:

  1. Someone tells the company in writing that they want to buy a lot of the company’s shares (called a takeover offer).

  2. If the company’s shares are sold on a stock exchange, and the stock exchange tells everyone that someone wants to buy more than 20% of these shares.

In these situations, the company can’t offer to sell its own shares or promise to transfer them to someone else.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM320405.

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Part 6 Shares and debentures
Treasury stock

67CReissue of shares company holds in itself

  1. Subject to subsection (2), section 47 shall apply to the transfer of a share held by a company in itself as if the transfer were the issue of the share under section 42 or section 44.

  2. Section 47(2) shall not apply to the transfer of a share held by a company in itself if the share is transferred by means of a system that is approved under section 376 of the Financial Markets Conduct Act 2013.

  3. Subject to subsection (1), the transfer of a share by a company in itself shall not be subject to any provisions in this Act or the company's constitution relating to the issue of shares, except to the extent the company's constitution expressly applies those provisions.

  4. A company must not grant an option to acquire a share it holds in itself or enter into any obligations to transfer such a share if—

  5. the company has received notice in writing of a takeover offer made under the Takeovers Code in force under the Takeovers Act 1993; or
    1. in the case of shares that are quoted on a stock exchange, the stock exchange makes a public release that a takeover offer for more than 20% of the quoted shares is to be made.

      Notes
      • Section 67C: inserted, on , by section 3 of the Companies Act 1993 Amendment Act (No 2) 1994 (1994 No 82).
      • Section 67C(2): amended, on , by section 150 of the Financial Markets (Repeals and Amendments) Act 2013 (2013 No 70).
      • Section 67C(4): replaced, on , by section 150 of the Financial Markets (Repeals and Amendments) Act 2013 (2013 No 70).