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Companies Act 1993

Liquidations - Duties, rights, and powers of liquidators

258: Duty to have regard to views of creditors and shareholders

You could also call this:

“Listen to shareholders and creditors when closing a company”

When you’re in charge of closing down a company, you need to listen to what the shareholders and people the company owes money to (creditors) think. You should pay attention to what they say in meetings and in writing.

If the shareholders had a special meeting to decide to close the company, you need to consider what they said. You also need to think about what the creditors said in their meeting about closing the company.

You can call meetings with shareholders or creditors to hear their ideas. Sometimes, you have to call these meetings if enough shareholders or creditors ask you to. For example, if people who own at least 10% of the company’s shares want a meeting, you need to organise one right away. The same goes for creditors who are owed at least 10% of what the company owes in total.

When you do call a meeting, you need to follow the rules in Schedule 1 or Schedule 5 of this law.

Even though you need to listen to what shareholders and creditors say, you still get to make the final decisions when you’re closing down the company. You can use your own judgement to decide what’s best.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM321915.

Topics:

Business > Industry rules

Business > Fair trading

257: Duties in relation to final report and accounts, or

“Liquidator's final duties before removing a company from the register”

258A: Duty to report suspected offences, or

“Liquidators no longer required to report suspected offences”

Part 16 Liquidations
Duties, rights, and powers of liquidators

258Duty to have regard to views of creditors and shareholders

The liquidator must have regard to—
the views of the shareholders by whom any special resolution was passed at a meeting held for the purposes of section 241(2)(a) set out in a resolution passed at that meeting:
the views of creditors set out in any resolution passed at a meeting held for the purposes of section 243:
the views of creditors or shareholders set out in a resolution passed at a meeting called in accordance with subsection (2):
the views of any liquidation committee given in writing to the liquidator.

For the purposes of subsection (1), a liquidator—
must summon meetings of shareholders at such times as may be specified by any resolution of shareholders passed at a meeting held for the purposes of section 241(2)(a):
must summon meetings of creditors at such times as may be specified by any resolution of creditors passed at a meeting held for the purposes of section 243:
must summon a meeting of shareholders forthwith when required to do so by notice in writing given by shareholders holding shares on which has been paid up not less than 10% of the total amount paid up on all shares issued by the company:
must summon a meeting of creditors forthwith when required to do so by notice in writing given by creditors to whom is owed not less than 10% of the total amount owed to all creditors of the company:
may, at his or her discretion, summon a meeting of shareholders or creditors of the company.

A liquidator who calls a meeting of creditors or shareholders must call such a meeting in accordance with Schedule 1 or, if applicable, Schedule 5, as the case may be.
Nothing in this section limits or prevents a liquidator from exercising his or her discretion in carrying out his or her functions and duties under this Act.

Compare

1955 No 63 s 241