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New Zealand law explained for everyone

Companies Act 1993

Shareholders and their rights and obligations - Interest groups

116: Meaning of classes and interest groups

You could also call this:

“Defines how shares are grouped and shareholders are affected by company actions”

In this law, a ‘class’ means a group of shares that have the same rights, privileges, limitations, and conditions. This is important because it helps you understand how different types of shares are grouped together.

An ‘interest group’ is a bunch of shareholders whose rights are affected in the same way by something the company wants to do. To be part of an interest group, these shareholders must have the same rights, be affected in the same way, and usually own shares in the same class.

It’s important to know that there can be more than one interest group for any action or proposal the company makes. Also, even if shareholders own the same type of shares, they might end up in different interest groups. This can happen if the company does something that affects some shareholders but not others, or if a proposal treats some shareholders differently from others in the same class.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM320603.

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Part 7 Shareholders and their rights and obligations
Interest groups

116Meaning of classes and interest groups

  1. In this Act, unless the context otherwise requires,—

    class means a class of shares having attached to them identical rights, privileges, limitations, and conditions

      interest group, in relation to any action or proposal affecting rights attached to shares, means a group of shareholders—

      1. whose affected rights are identical; and
        1. whose rights are affected by the action or proposal in the same way; and
          1. subject to subsection (2)(b), who comprise the holders of 1 or more classes of shares in the company.

          2. For the purposes of this Act and the definition of the term interest group,—

          3. 1 or more interest groups may exist in relation to any action or proposal; and
            1. if—holders of shares in the same class may fall into 2 or more interest groups.
              1. action is taken in relation to some holders of shares in a class and not others; or
                1. a proposal expressly distinguishes between some holders of shares in a class and other holders of shares of that class,—