Who’s this Transfer of Company Shares and Approvals Bundle for?
Any privately owned New Zealand company (or its legal or accounting advisors) documenting the transfer of shares by one or more of its shareholders.
This bundle assumes the selling shareholders and buyer:
- have already signed an Agreement for Sale and Purchase of Shares or Agreement for Sale and Purchase of Shares (Minority Shareholding) agreeing to the terms of the share transfer(s) (such as price, timing, and seller warranties); or
- they are not using an Agreement for Sale and Purchase because the share transfer is between related parties and allowed under the company’s constitution or shareholders’ agreement (so low risk). In this scenario, we recommend the company consult its accountant (or lawyer) about the timing and purchase price of the shares before signing the share transfer documents.
Why do I need this Transfer of Company Shares and Approvals bundle?
In New Zealand, the transfer of company shares is subject to specific legal requirements. To be valid, a share transfer must be in writing and signed. The board of directors must approve the transfer and enter the buyer’s name on the company’s share register.
It is common for a company’s constitution or shareholders’ agreement to restrict a shareholder’s ability to transfer their shares. Often, there are certain limited ‘permitted’ types of share transfers, such as between related parties. If a proposed share transfer(s) doesn’t fit into this ‘permitted’ category, typically, the shares must be offered to the other existing shareholders for purchase before a shareholder can sell the shares to someone who is not an existing shareholder. This is known as ‘pre-emptive rights’. If the shareholders are all happy for the shares to be sold to the non-shareholder, to avoid following what is often a lengthy and detailed pre-emptive rights process, the shareholders can agree to waive their pre-emptive rights. This waiver needs to be in writing and carefully worded.
It is important to check the company’s constitution and shareholders’ agreement (if one exists) for these restrictions.
What’s included in this Transfer of Company Shares and Approvals Bundle?
- Up to 4 separate share transfers (ie, 4 different shareholders transferring their shares to another shareholder)
- Directors’ resolution approving the share transfer(s) (this assumes the directors can pass resolutions in writing rather than at a board meeting, which is the default position under the Companies Act 1993)
- Optional Shareholder Consent and Waiver of Pre-emptive Rights
How long will it take me to create my documents?
5-10 minutes - less than it takes to make 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?
- The company’s New Zealand Business Number – this can be found by searching here.
- The names of each shareholder in the company who is selling their shares, the number and type of shares (ordinary or preference)
- The name and contact details of the buyer
- Whether the shares being sold are subject to restrictions known as ‘pre-emptive rights’, and if so, have the other shareholders agreed to waive these rights? If they have, the names of all shareholders in the company.
- The names of all directors of the company
What if I need help?
Share transfers are important legal documents, and if anything is not clear, or you have any questions, feel free to reach out to us at hello@onyourterms.co.nz and we can either help over email or jump on a call.
Your document will be downloadable in MS Word, so you can make changes if you like (and add branding). Also, our legal partner, Luminate Legal, can provide legal advice for a fixed price if you’d like it.
Alternatively, you can ask your own lawyer to review the documents you have created. As you’ve done a large chunk of the work yourself, this should be at a much lower cost than if your lawyer prepared the documents from the beginning.
What do I do once my Transfer of Company Shares and Approvals documents are created?
The documents are ready to be signed as soon as you have downloaded them. Once signed and the transaction is complete, you will need to update the company’s Share Register (if the company doesn’t have one (this is a legal requirement) – you can get one here) with the shareholding change and notify the Registrar of Companies (via the Companies Office) of the new shareholding details.
Other helpful information:
- Read our blog: How to transfer shares in a New Zealand company
- If there is an existing shareholders’ agreement and the buyer is purchasing only some of the shares in the company (rather than all the shares), for the buyer to become bound by the existing shareholders’ agreement see our Deed of Accession to Shareholders’ Agreement
- You may also find these bundles or documents useful for your business: Company Constitution, Constitution (for wholly owned subsidiary), Term Sheet for Shareholders' Agreement, Director Indemnity Bundle, Term Sheet for Sale and Purchase of Shares (minority shareholding), Company Registers, Shareholders’ Agreement
- Check out our FAQs
If you’re unsure whether this 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.