Plain language law

New Zealand law explained for everyone

Companies Act 1993

Enforcement - Personal actions by shareholders

174: Prejudiced shareholders

You could also call this:

“Seeking court help for unfair treatment as a shareholder”

If you are a shareholder, former shareholder, or someone else with rights in a company, you can ask the court for help if you think the company is treating you unfairly. This might be because of how the company is run, or things the company has done or might do. You can do this if you feel you’re being treated unfairly in your role as a shareholder or in any other way you’re involved with the company.

If the court agrees that it’s fair to do so, they can make different kinds of orders to help. These orders might include making the company or someone else buy your shares, or pay you money to make up for what happened. The court could also tell the company how to run things in the future, change the company’s rules, or put someone in charge to look after the company’s money. They might even fix the company’s records, close the company down, or undo things the company or its leaders have done that broke the rules.

It’s important to know that the court can only make these orders against the company or another person if they’re part of the court case when you ask for help.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM320835.

Topics:
Business > Industry rules
Business > Fair trading
Crime and justice > Courts and legal help
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173: Representative actions, or

“How shareholders can group together to take legal action against a company or director”

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175: Certain conduct deemed prejudicial, or

“Actions that can be unfair to shareholders”

Part 9 Enforcement
Personal actions by shareholders

174Prejudiced shareholders

  1. A shareholder or former shareholder of a company, or any other entitled person, who considers that the affairs of a company have been, or are being, or are likely to be, conducted in a manner that is, or any act or acts of the company have been, or are, or are likely to be, oppressive, unfairly discriminatory, or unfairly prejudicial to him or her in that capacity or in any other capacity, may apply to the court for an order under this section.

  2. If, on an application under this section, the court considers that it is just and equitable to do so, it may make such order as it thinks fit including, without limiting the generality of this subsection, an order—

  3. requiring the company or any other person to acquire the shareholder's shares; or
    1. requiring the company or any other person to pay compensation to a person; or
      1. regulating the future conduct of the company's affairs; or
        1. altering or adding to the company's constitution; or
          1. appointing a receiver of the company; or
            1. directing the rectification of the records of the company; or
              1. putting the company into liquidation; or
                1. setting aside action taken by the company or the board in breach of this Act or the constitution of the company.

                  1. No order may be made against the company or any other person under subsection (2) unless the company or that person is a party to the proceedings in which the application is made.