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Building Societies Act 1965

Conversion to company

113J: Terms and conditions of bonus balloting securities not to be substantially different from terms and conditions of bonus balloting shares

You could also call this:

“Bonus shares must stay similar when a building society becomes a company”

When a building society changes into a company, they might need to change some special shares called bonus balloting shares into something called debt securities. These debt securities need to be very similar to the original shares.

The company doesn’t have to give the people who own these new debt securities the same rights as other company shareholders. This means they don’t get to vote at meetings, receive notices about meetings, choose company directors, or have other rights that shareholders usually have.

If the company wants to make the new debt securities very different from the original shares, they need to tell the shareholder about it first. They must send a notice that explains clearly what will change. The shareholder then needs to agree in writing to this change.

The notice sent to the shareholder must give enough information so they can understand what will happen to their shares. It needs to tell them about their right to have securities similar to their original shares, and explain what the new securities will be like if they agree to the change.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM372334.

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"Rules for protecting certain shareholders when a building society becomes a company"

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Part 7A Conversion to company

113JTerms and conditions of bonus balloting securities not to be substantially different from terms and conditions of bonus balloting shares

  1. Subject to subsection (2), where a scheme for conversion of any society that is to become converted into a company pursuant to this Part provides for the conversion into debt securities of any bonus balloting shares issued by the society, the terms and conditions of those debt securities shall not be substantially different from the terms and conditions of those bonus balloting shares.

  2. Nothing in subsection (1) shall require the issue of any debt securities which confer on the holder of those securities—

  3. any right to vote at any meeting of the company:
    1. any right to receive notice of any meeting of the company:
      1. any right to appoint any director of the company:
        1. any other rights ordinarily only conferred on shareholders of a company.

          1. Subsection (1) shall not apply to any person—

          2. who has received a notice that complies with subsection (4); and
            1. who has consented in writing to the conversion of that person's shares into any debt securities the terms and conditions of which are substantially different from the terms and conditions of that person's bonus balloting shares.

              1. Every notice referred to in subsection (3) shall inform the person to whom it is addressed, in sufficient detail as to enable that person to make an informed assessment as to the nature of the interests into which his or her shares may be converted,—

              2. of that person's entitlement under subsection (1):
                1. of the nature of the interest into which that person's shares may be converted if that person so consents.

                  Notes
                  • Section 113J: inserted, on , by section 26 of the Building Societies Amendment Act 1987 (1987 No 175).
                  • Section 113J(1): amended, on , by section 150 of the Financial Markets (Repeals and Amendments) Act 2013 (2013 No 70).
                  • Section 113J(2): amended, on , by section 150 of the Financial Markets (Repeals and Amendments) Act 2013 (2013 No 70).
                  • Section 113J(2)(a): amended, on , by section 7 of the Building Societies Amendment Act 1993 (1993 No 111).
                  • Section 113J(2)(b): amended, on , by section 7 of the Building Societies Amendment Act 1993 (1993 No 111).
                  • Section 113J(3)(b): amended, on , by section 150 of the Financial Markets (Repeals and Amendments) Act 2013 (2013 No 70).