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Companies Act 1993

Liquidations - Creditors' claims

310G: Transactions under netting agreement and effect on certain sections

You could also call this:

“How netting agreements affect certain rules for company transactions”

The law says that sections 310A to 310O don’t stop sections 56, 292, 297, or 298 from working when it comes to transactions that are part of a netting agreement. A netting agreement is a special kind of contract that companies sometimes use.

However, section 292(4A) doesn’t apply to transactions that are part of a netting agreement. This means that some rules about transactions don’t work the same way when there’s a netting agreement involved.

When looking at sections 292 and 297, the word “transaction” doesn’t include a netting agreement that a company has entered into. But there’s one exception: if the netting agreement makes the amount the company owes or is owed smaller than it was before, then that part of the agreement is still considered a transaction.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM322379.

Topics:
Business > Industry rules
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310F: Application of set-off under section 310 to transactions subject to netting agreements, or

“Rules for settling accounts with a company in liquidation when you have a netting agreement”

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310H: Rights under netting agreement not affected by commencement of liquidation, or

“Netting agreements remain valid when a company is liquidated”

Part 16 Liquidations
Creditors' claims

310GTransactions under netting agreement and effect on certain sections

  1. Nothing in sections 310A to 310O prevents the operation of section 56 or section 292 or section 297 or section 298 in respect of a transaction that is subject to a netting agreement.

  2. However, nothing in section 292(4A) applies to a transaction that is subject to a netting agreement.

  3. For the purposes of sections 292 and 297, the term transaction, in relation to a company, does not include a netting agreement entered into by the company, except to the extent that the effect of entering into the netting agreement is to reduce any amount that was owing by or to the company at the time the company entered into the agreement.

Notes
  • Section 310G: inserted, on , by section 15 of the Companies Amendment Act 1999 (1999 No 19).
  • Section 310G(2): amended, on , by section 6 of the Companies Amendment Act (No 2) 2010 (2010 No 53).