Companies Act 1993

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

113: Purchase of shares by third party

You could also call this:

“Rules for when someone else buys your shares in a company”

If you and a company agree that someone else will buy your shares, the rules in sections 112 to 112C still apply. These rules will be changed a bit to fit this situation. When these rules talk about the board or the company, they now mean the person buying your shares.

If you’re selling your shares this way, the company promises to protect you if something goes wrong. If the person who agreed to buy your shares doesn’t pay the right price, the company will pay you back for any money you lose. The right price is either the one you agreed on or the one an independent expert decides if there’s a disagreement.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM320499.

Topics:
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112C: Timing of transfer of shares, or

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

113Purchase of shares by third party

  1. Sections 112 to 112C apply to the purchase of shares by a person with whom the company has entered into an arrangement for purchase in accordance with section 111(2)(b) subject to such modifications as may be necessary, and, in particular, as if references in that section to the board and the company were references to that person.

  2. Every holder of shares that are to be purchased in accordance with the arrangement is indemnified by the company in respect of loss suffered by reason of the failure by the person who has agreed to purchase the shares to purchase them at the price nominated or fixed by arbitration, as the case may be.

Notes
  • Section 113(1): amended, on , by section 8 of the Companies (Minority Buy-out Rights) Amendment Act 2008 (2008 No 69).