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Companies Act 1993

Amalgamations

222: Short form amalgamation

You could also call this:

“Simplified process for combining wholly-owned or commonly-owned companies”

You can combine a company with one or more other companies that it owns completely without following all the usual rules. To do this, the boards of all the companies involved need to agree. They must decide that the shares of the other companies will be cancelled, and the main company’s rules (if it has any) will stay the same. The board must also be sure that the new combined company will be able to pay its bills. They need to name who will be in charge of the new company.

If you have two or more companies that are all owned by the same person, you can also combine them in a similar way. The boards of all these companies need to agree. They must decide to cancel the shares of all but one company, and use that company’s rules (if it has any) for the new combined company. Again, they need to be sure the new company can pay its bills and name who will be in charge.

Before combining companies this way, you must tell anyone who has lent money to your company at least 20 working days before it happens.

When the boards agree to combine companies like this, it’s treated the same as if they had followed all the usual steps for combining companies.

The directors who agree to combine companies must sign a paper saying they believe the new company will be able to pay its bills, and explain why they think this.

If a director doesn’t sign this paper when they should, they’re breaking the law and could be punished as set out in section 373(1).

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM321146.

Topics:
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“How companies get approval to join together”

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Part 13 Amalgamations

222Short form amalgamation

  1. A company and 1 or more other companies that is or that are directly or indirectly wholly owned by it may amalgamate and continue as 1 company (being the company first referred to) without complying with section 220 and section 221 if—

  2. the amalgamation is approved by a resolution of the board of each amalgamating company; and
    1. each resolution provides that—
      1. the shares of each amalgamating company, other than the amalgamated company, will be cancelled without payment or other consideration; and
        1. the constitution of the amalgamated company, if it has one, will be the same as the constitution of the company first referred to, if it has one; and
          1. the board is satisfied on reasonable grounds that the amalgamated company will, immediately after the amalgamation becomes effective, satisfy the solvency test; and
            1. the person or persons named in the resolution will be the director or directors of the amalgamated company.

            2. Two or more companies, each of which is directly or indirectly wholly owned by the same person, may amalgamate and continue as 1 company without complying with section 220 or section 221 if—

            3. the amalgamation is approved by a resolution of the board of each amalgamating company; and
              1. each resolution provides that—
                1. the shares of all but 1 of the amalgamating companies will be cancelled without payment or other consideration; and
                  1. the constitution of the amalgamated company, if it has one, will be the same as the constitution of the amalgamating company whose shares are not cancelled, if it has one; and
                    1. the board is satisfied on reasonable grounds that the amalgamated company will, immediately after the amalgamation becomes effective, satisfy the solvency test; and
                      1. the person or persons named in the resolution will be the director or directors of the amalgamated company.

                      2. The board of each amalgamating company must, not less than 20 working days before the amalgamation is proposed to take effect, give written notice of the proposed amalgamation to every secured creditor of the company.

                      3. The resolutions approving an amalgamation under this section, taken together, shall be deemed to constitute an amalgamation proposal that has been approved.

                      4. The directors who vote in favour of a resolution required by subsection (1) or subsection (2), as the case may be, must sign a certificate stating that, in their opinion, the condition set out in subsection (1)(b)(iii) or subsection (2)(b)(iii) is satisfied, and the grounds for that opinion.

                      5. A director who fails to comply with subsection (5) commits an offence and is liable on conviction to the penalty set out in section 373(1).

                      Notes
                      • Section 222(1)(b)(iii): amended, on , by section 16(1) of the Companies Act 1993 Amendment Act 1997 (1997 No 27).
                      • Section 222(1)(b)(iv): inserted, on , by section 16(1) of the Companies Act 1993 Amendment Act 1997 (1997 No 27).
                      • Section 222(2): amended, on , by section 8 of the Companies Amendment Act 1998 (1998 No 31).
                      • Section 222(2)(b)(iii): amended, on , by section 16(2) of the Companies Act 1993 Amendment Act 1997 (1997 No 27).
                      • Section 222(2)(b)(iv): inserted, on , by section 16(2) of the Companies Act 1993 Amendment Act 1997 (1997 No 27).
                      • Section 222(5): amended, on , by section 16(3) of the Companies Act 1993 Amendment Act 1997 (1997 No 27).