The Companies Act 1993 (NZ) is the primary legislation that regulates the formation, operation, and dissolution of companies in New Zealand. One of the key aspects of the Act is the provisions it includes to address disputes between shareholders. These provisions aim to provide a framework for resolving conflicts and preserving the stability of the company.
Section 131 of the Act outlines the general principle that shareholders are entitled to have their interests fairly and reasonably represented in the management and conduct of the company. This includes the right to participate in the decision-making process and to receive adequate information about the company’s affairs.
If a shareholder believes that their rights are not being respected or that the company is not being managed in their best interests, they can raise a complaint or dispute with the company’s directors or management.
The Act provides a number of options for shareholders to seek resolution of their concerns, including:
- Mediation: The Act encourages the use of mediation as a means of resolving disputes in a cost-effective and timely manner. Mediation is a form of alternative dispute resolution in which a neutral third party helps the parties to reach an agreement.
- Shareholders’ meetings: The Act allows shareholders to call a special meeting to discuss and vote on specific issues, including disputes. Shareholders can also request that the company’s directors put a resolution on the agenda of the next annual general meeting.
- Court proceedings: If a dispute cannot be resolved through other means, shareholders can seek a legal remedy through the courts. This may involve seeking an injunction to stop the company from taking certain actions, or seeking damages if the company has acted improperly.
The Act also includes provisions relating to the removal of directors, which can be an effective means of resolving disputes between shareholders and management. Section 168 of the Act allows shareholders to remove a director by passing a special resolution at a meeting of shareholders. The director must be given the opportunity to be heard before the resolution is passed, and the removal must be justified on the grounds of misconduct, incompetence, or a lack of good faith.
In addition to these provisions, the Act also sets out rules for the management and operation of companies, including the duties and responsibilities of directors, the requirement for financial reporting, and the procedures for making decisions. These rules aim to ensure that the company is run in a transparent and accountable manner and that shareholders are able to exercise their rights effectively.
Overall, the Companies Act 1993 (NZ) provides a comprehensive framework for addressing disputes between shareholders and promoting the smooth operation of companies in New Zealand. By providing a range of options for resolving conflicts, the Act helps to ensure that shareholder interests are protected and that the company is able to function effectively.
Recent Comments