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Building Societies Act 1965

Conversion to company

113G: Liability of members of company

You could also call this:

"Members' money at risk stays the same when a building society becomes a company"

If a building society becomes a company, your responsibility as a member remains limited. When you get shares in the new company because of your membership in the society, you won't have to contribute more money to the company if it goes out of business than you originally agreed to contribute to the society. This means that if the society is turned into a company and that company later has financial problems, you won't lose more money than you initially committed to the building society.

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This page was last updated on

View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM372325.

Topics:
Money and consumer rights > Banking and loansHousing and property > Buying and selling homes
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113F: Enforceability of rights and liabilities altered by or arising under scheme for conversion, or

"How changes in rights and duties work when a building society becomes a company"

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113H: Prohibition on issue of terminating or bonus balloting shares in company to which society converts, or

"New company from building society can't give out special or prize-winning shares"

Part 7AConversion to company

113GLiability of members of company

  1. No shares in the capital of a company into which a society has become converted pursuant to this Part that are issued in respect of shares held by a person as a member of the society shall require a contribution from that person to the assets of the company in the event of the company being put into liquidation that exceeds the amount undertaken to be contributed by that person in respect of that person's shares in the capital of the society to the assets of the society in the event of the society being dissolved.

Notes
  • Section 113G: inserted, on , by section 26 of the Building Societies Amendment Act 1987 (1987 No 175).
  • Section 113G: amended, on , by section 4 of the Building Societies Amendment Act 1993 (1993 No 111).