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310A: Definitions relating to set-off under netting agreement
or “Explaining key terms for settling debts between companies”
You could also call this:

“How set-off works in netting agreements for creditors' claims”

You need to know about how set-off works under a netting agreement. This is part of the Companies Act 1993 and deals with creditors’ claims.

A netting agreement is a special kind of contract. For it to count, it must be written down. The rules in sections 310A to 310O apply to these agreements unless the agreement specifically says they don’t. It doesn’t matter when the agreement was made - it could be before or after these rules came into effect. The rules cover all the things you have to do under the agreement, no matter what currency you’re using.

These rules still apply even if someone does something they’re not supposed to do under the agreement, like giving away their rights or using them as security when they shouldn’t.

However, there are some things these rules don’t cover. If you’re a shareholder, they don’t apply to money you pay for your shares or money you pay when the company asks you to pay for shares you’ve agreed to buy.

Remember, this is just a simple explanation of the law. If you need to understand all the details, you should look at the actual law or talk to a lawyer.

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Next up: 310C: Calculation of netted balance

or “How to calculate the final amount owed in a netting agreement when a company is liquidated”
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Part 16 Liquidations
Creditors' claims

310BApplication of set-off under netting agreement

  1. Despite anything in section 313, sections 310A to 310O apply—

  2. to a netting agreement—
    1. made in or evidenced by writing; and
      1. in which the application of sections 310A to 310O has not been expressly excluded; and
        1. whether made before or after the commencement of this section; and
        2. to all obligations under a netting agreement (whether those obligations are payable in New Zealand currency or in some other currency).

          1. Sections 310A to 310O apply despite—

          2. any disposal of rights under a transaction that is subject to a netting agreement in contravention of a prohibition in the netting agreement; or
            1. the creation of a charge or other interest in respect of the rights referred to in paragraph (a) in contravention of a prohibition in the netting agreement.

              1. Nothing in sections 310A to 310O applies to an amount paid or payable by a shareholder—

              2. as the consideration, or part of the consideration, for the issue of a share; or
                1. in satisfaction of a call in respect of an outstanding liability of the shareholder made by the board of directors or by the liquidator.

                  Notes
                  • Section 310B: inserted, on , by section 15 of the Companies Amendment Act 1999 (1999 No 19).