Plain language law

New Zealand law explained for everyone

Companies Act 1993

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

111: Notice requiring purchase

You could also call this:

“How to tell a company you want them to buy your shares”

If you’re a shareholder and you want the company to buy your shares because of something that happened, you can tell the company in writing. You have to do this quickly - within 10 working days of when the decision was made at a meeting, or within 10 working days of when you were told about the decision if it wasn’t made at a meeting.

When the company gets your letter, they have 20 working days to decide what to do. They have a few choices:

They can agree to buy your shares.

They can find someone else to buy your shares.

They can ask a court to help decide what to do.

They can try to change the decision that made you want to sell your shares in the first place.

Whatever they decide, they have to tell you in writing.

Remember, this only applies in certain situations, which are explained in other parts of the law (section 110 or section 118).

This text is automatically generated. It might be out of date or be missing some parts. Find out more about how we do this.

View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM320497.

Topics:
Business > Industry rules
Business > Fair trading
Previous

110: Shareholder may require company to purchase shares, or

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

Next

112: Price for shares to be purchased by company determined, or

“How the company decides the price when buying your shares”

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

111Notice requiring purchase

  1. A shareholder of a company who is entitled to require the company to purchase shares by virtue of section 110 or section 118 may,—

  2. within 10 working days of the passing of the resolution at a meeting of shareholders; or
    1. where the resolution was passed under section 122, before the expiration of 10 working days after the date on which notice of the passing of the resolution is given to the shareholder,—
        1. give a written notice to the company requiring the company to purchase those shares.

      1. Within 20 working days of receiving a notice under subsection (1), the board must—

      2. agree to the purchase of the shares by the company; or
        1. arrange for some other person to agree to purchase the shares; or
          1. apply to the court for an order under section 114 or section 115; or
            1. arrange, before taking the action concerned, for the resolution to be rescinded in accordance with section 106 or decide in the appropriate manner not to take the action concerned, as the case may be; and
              1. give written notice to the shareholder of the board's decision under this subsection.