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Companies Act 1993

Shares and debentures - Transfer of shares

84: Transfer of shares

You could also call this:

“How to transfer ownership of company shares”

You can transfer shares in a company by having your name added to the share register. This is usually allowed unless the company’s rules say otherwise.

To transfer shares, you need to fill out a form. The person who currently owns the shares (or someone acting for them) must sign this form. You then give this form to the company or to someone who looks after the share register for the company.

If owning the shares means you have to pay money to the company, you also need to sign the transfer form.

When the company gets your form, they should put the new owner’s name on the share register right away. But there are some reasons why they might not do this:

  1. The company’s board might decide not to register the transfer or to delay it. If they do this, they have to explain why within 30 working days of getting your form.

  2. If the board decides not to register the transfer, they must tell both the old and new owners within 5 working days. They have to explain their reasons.

  3. The company can only refuse to register the transfer if the law or the company’s rules allow it for the reasons they’ve given.

The company might also refuse or delay registering the transfer if the person selling the shares hasn’t paid money they owe for those shares.

If the company doesn’t follow these rules about registering transfers, they’re breaking the law. The company and its directors can get in trouble for this.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM320442.

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Part 6 Shares and debentures
Transfer of shares

84Transfer of shares

  1. Subject to the constitution of the company, shares in a company may be transferred by entry of the name of the transferee on the share register.

  2. For the purpose of transferring shares, a form of transfer signed by the present holder of the shares or by his or her personal representative must be delivered to—

  3. the company; or
    1. an agent of the company who maintains the share register under section 87(3).

      1. The form of transfer must be signed by the transferee if registration as holder of the shares imposes a liability to the company on the transferee.

      2. On receipt of a form of transfer in accordance with subsection (2) and, if applicable, subsection (3), the company must forthwith enter or cause to be entered the name of the transferee on the share register as holder of the shares, unless—

      3. the board resolves within 30 working days of receipt of the transfer to refuse or delay the registration of the transfer, and the resolution sets out in full the reasons for doing so; and
        1. notice of the resolution, including those reasons, is sent to the transferor and to the transferee within 5 working days of the resolution being passed by the board; and
          1. the Act or the constitution expressly permits the board to refuse or delay registration for the reasons stated.

            1. Subject to the constitution of a company, the board may refuse or delay the registration of a transfer of shares if the holder of the shares has failed to pay to the company an amount due in respect of those shares, whether by way of consideration for the issue of the shares or in respect of sums payable by the holder of the shares in accordance with the constitution.

            2. If a company fails to comply with subsection (4),—

            3. the company commits an offence and is liable on conviction to the penalty set out in section 373(1); and
              1. every director of the company commits an offence and is liable on conviction to the penalty set out in section 374(1).