Plain language law

New Zealand law explained for everyone

Companies Act 1993

Shares and debentures - Assistance by a company in the purchase of its own shares

81: Enforceability of transactions

You could also call this:

“How transactions can still be valid even if company rules aren't followed”

If a company doesn’t follow the rules in sections 76, 78, 79, or 80, it doesn’t mean the transaction is invalid. The deal can still go ahead.

However, this doesn’t mean that directors or other people are off the hook. If they’ve broken their duties or acted as a constructive trustee, they can still be held responsible. The same goes for any other type of wrongdoing.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM320435.

Topics:
Business > Industry rules
Business > Fair trading
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80: Financial assistance not exceeding 5% of shareholders' funds, or

“Company can give small financial help for share purchases if conditions met”

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“A company cannot own shares in a company that owns it”

Part 6 Shares and debentures
Assistance by a company in the purchase of its own shares

81Enforceability of transactions

  1. Failure to comply with section 76 or section 78 or section 79 or section 80 does not affect the validity of a transaction.

  2. This section does not affect a liability of a director or any other person for breach of a duty, or as a constructive trustee, or otherwise.