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New Zealand law explained for everyone

Companies Act 1993

Shareholders and their rights and obligations - Minority buy-out rights

110: Shareholder may require company to purchase shares

You could also call this:

“You can make the company buy your shares if you disagree with major changes”

If you’re a shareholder in a company, you have the right to ask the company to buy your shares in certain situations. This can happen when the company wants to make big changes that you don’t agree with.

You can ask the company to buy your shares if:

  1. You’re allowed to vote on changing the company’s activities, like adding or removing limits on what the company can do, or on changing the company’s rights, privileges, limitations and conditions. If the company decides to make these changes and you voted against them with all the shares you own, you can ask the company to buy your shares.

  2. You’re allowed to vote on the company buying back its own shares or giving financial help to buy its shares. If the company decides to do this and you voted against it with all the shares you own, you can ask the company to buy your shares.

  3. If the company made these decisions without a meeting, and you didn’t sign the agreement to make these changes, you can also ask the company to buy your shares.

If any of these situations happen, you have the right to make the company buy your shares. The company must follow the rules in section 111 when buying your shares.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM320496.

Topics:
Business > Industry rules
Business > Fair trading
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“How to tell a company you want them to buy your shares”

Part 7 Shareholders and their rights and obligations
Minority buy-out rights

110Shareholder may require company to purchase shares

  1. Where—

  2. a shareholder is entitled to vote on the exercise of 1 or more of the powers set out in—
    1. section 106(1)(a), and the proposed alteration imposes or removes a restriction on the activities of the company; or
      1. section 106(1)(b) or (c); and
      2. the shareholders resolved, pursuant to section 106, to exercise the power; and
        1. the shareholder cast all the votes attached to shares registered in the shareholder's name and having the same beneficial owner against the exercise of the power; or
          1. where the resolution to exercise the power was passed under section 122, the shareholder did not sign the resolution,—
              1. that shareholder is entitled to require the company to purchase those shares in accordance with section 111.