Why do I need a Company Constitution?
It looks like boring paperwork (and it kinda is..), but it’s an important document.
In New Zealand, companies don’t have to have a constitution. The Companies Act 1993 includes rules for a company, its directors and shareholders, which act as a “default constitution”. However, there are some things a company cannot do unless they are authorised in a constitution (not a shareholders’ agreement), such as buy-back shares from its shareholders, issue shares without first offering them to the existing shareholders, indemnify its directors or employees, get directors and officers insurance for its directors or employees, or issue redeemable shares. These actions can be very useful for a company.
This Constitution also has optional ‘pre-emptive rights’ provisions, which require shareholders to first offer their shares for sale to the existing shareholders before selling them to anyone else.
This Constitution is designed for a company with more than one shareholder. If your company is wholly owned by another company shareholder, you can purchase our Constitution (wholly owned subsidiary) instead.
What’s in a Company Constitution?
A simple, easy-to-understand constitution prepared by New Zealand lawyers that permits a company to take certain actions or avoid certain procedures that it would not otherwise be legally able to do. It doesn’t repeat large chunks of the Companies Act as many constitutions do. If the company’s shareholders have entered into a shareholders’ agreement, it will override this Constitution if there is any inconsistency.
This Constitution also includes a Shareholders’ Resolution Adopting Constitution – required under the Companies Act 1993 for the shareholders to agree to the adoption of the constitution.
How long will it take to create my Company Constitution?
Under 5 minutes - less time than making a coffee! During the Q&A you can save your progress to come back later, or repeat the Q&A to change an answer or produce a new version of a document.
What information do I need to complete the Q&A?
- company number (if the company has one)
- minimum number of directors
- quorum requirements – how many directors must be present at a board meeting?
What if I need help?
On Your Terms has teamed up with Luminate Legal to offer its customers the option of obtaining legal advice from a lawyer to provide extra assurance and peace of mind. If you would like to ask a lawyer some quick questions about your document (or your responses to the Q&A), or have your document reviewed/edited by a lawyer, click here to view and select Luminate Legal's packages and fixed-fee pricing exclusively for On Your Terms customers.
What do I do once my Company Constitution is created?
The Constitution is ready to go as soon as you have downloaded it. It doesn’t need to be signed. All shareholders must approve and adopt the Constitution for the company by signing the Special Resolution of Shareholder Adopting Constitution (provided with the Constitution). If:
- the company is not yet incorporated (also known as registered), the Constitution must be uploaded to the New Zealand Companies Office at the time the company is incorporated.
- the company already exists, the Constitution must be uploaded to the New Zealand Companies Office within 10 working days after it is adopted by the shareholders.
Other helpful information:
- See our Guide to Director Obligations and Responsibilities in New Zealand and Guide to Incorporating a Company in New Zealand
- Read our helpful blogs including Your Top 10 Questions on Shareholders' Agreements , Why Business Pre-nups (aka Shareholders’ Agreements) are Essential, How to transfer shares in a New Zealand company
- You may also find these bundles or documents useful for your business: Shareholders' Agreement and Constitution Bundle, Director Indemnity Bundle, Constitution (wholly owned subsidiary), Shareholders' Agreement, Company Registers, Resolutions to Approve Issue of New Shares, Transfer of Company Shares and Approvals Bundle.
- Check out our FAQs here
If you’re unsure whether this document/bundle is what you need, reach out to us at hello@onyourterms.co.nz – we’re happy to help!
If you’re not satisfied with your purchase of this product for any reason, let us know why within 10 days of your purchase and we’ll work with you to make sure you’re happy, including giving you a full refund if necessary.
Disclaimer: On Your Terms was created to provide fast, easy and affordable access to legal information and documentation. We are not a law firm and do not provide legal advice. The information and documents we provide are of a general nature, designed for common situations, and may not be suitable for your needs or circumstances. If you need legal advice, we have a network of specialist law firm partners able to help you here.