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Companies Act 1993

Voluntary administration - Effect of appointment of administrator

239AB: Effect on transfer of shares

You could also call this:

“Share transfers and shareholder changes are restricted during company administration”

When a company is in administration, you can’t transfer shares or change the rights or responsibilities of shareholders. This helps protect the company and its creditors during this difficult time.

However, there are two exceptions to this rule. First, if the administrator thinks it’s best for the people the company owes money to, they can allow shares to be transferred. Second, a court can step in and make special orders.

The court can order a share transfer if the administrator has been asked to allow it but said no or didn’t answer quickly enough. The court can also change the rights and responsibilities of shareholders if needed.

These rules help make sure that everything stays fair and organised while the company is being looked after by the administrator.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM321523.

Topics:
Business > Industry rules
Business > Fair trading
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Part 15A Voluntary administration
Effect of appointment of administrator

239ABEffect on transfer of shares

  1. A share in a company in administration must not be transferred and the rights or liabilities of a shareholder of the company must not be altered.

  2. However, the administrator may consent to the transfer of a share in a company in administration if the administrator is satisfied that the transfer is in the best interests of the company's creditors.

  3. Also, despite subsection (1), the court may make an order—

  4. for the transfer of a share in a company in administration, but only after the administrator has been asked to consent to the transfer and has refused or failed to respond in a reasonable time; or
    1. altering the rights and liabilities of a shareholder in a company in administration.

      Compare
      • Corporations Act 2001 s 437F (Aust)
      Notes
      • Section 239AB: inserted, on , by section 6 of the Companies Amendment Act 2006 (2006 No 56).