Plain language law

New Zealand law explained for everyone

Companies Act 1993

Shareholders and their rights and obligations - Powers of shareholders

106: Powers exercised by special resolution

You could also call this:

“Shareholders use special votes for big company decisions”

When you, as shareholders, want to make important decisions about your company, you need to use a special kind of vote called a special resolution. You must use this special resolution when you want to do any of these big things:

  1. Create, change, or get rid of your company’s constitution (which is like a rulebook for your company).
  2. Approve a really big business deal.
  3. Join your company with another company (this is called amalgamation).
  4. Close down your company (this is called putting it into liquidation).

If you use a special resolution to make a decision about the first three things (constitution, big deal, or joining companies), you can only undo that decision by using another special resolution.

However, if you use a special resolution to close down your company, you can’t change your mind or undo that decision at all.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM320483.

Topics:
Business > Industry rules
Business > Fair trading
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105: Exercise of powers by ordinary resolution, or

“How shareholders make decisions by ordinary resolution”

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107: Unanimous assent to certain types of action, or

“Company actions allowed when all decision-makers agree”

Part 7 Shareholders and their rights and obligations
Powers of shareholders

106Powers exercised by special resolution

  1. Notwithstanding the constitution of a company, when shareholders exercise a power to—

  2. adopt a constitution or, if it has one, alter or revoke the company's constitution:
    1. approve a major transaction:
      1. approve an amalgamation of the company under section 221:
        1. put the company into liquidation,—
            1. the power must be exercised by special resolution.

          1. A special resolution pursuant to paragraph (a) or paragraph (b) or paragraph (c) of subsection (1) can be rescinded only by a special resolution.

          2. A special resolution pursuant to paragraph (d) of subsection (1) cannot be rescinded in any circumstances.