Companies Act 1993 Flashcards by Christopher Hays

Under _____________ of the Companies Act 1993, sections 201 and 202 apply to the following:-

(a) every large company; and
(b) every company that is a public entity; and
(c) every large overseas company; and
(d) every other company with 10 or more shareholders unless the company has opted out of compliance with the provision in accordance with section 207I; and
(e) every other company with fewer than 10 shareholders if the company has opted into compliance with the provision in accordance with section 207K.

section 200

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Under section 200 of the ________________, sections 201 and 202 apply to the following:-

Companies Act 1993

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Under section 200 of the Companies Act 1993, sections _____________ apply to the following:-

201 and 202

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Under section 200 of the Companies Act 1993, sections 201 and 202 apply to the following:-

(a) _________________; and
(b) every company that is a public entity; and
(c) every large overseas company; and
(d) every other company with 10 or more shareholders unless the company has opted out of compliance with the provision in accordance with section 207I; and
(e) every other company with fewer than 10 shareholders if the company has opted into compliance with the provision in accordance with section 207K.

every large company

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Under section 200 of the Companies Act 1993, sections 201 and 202 apply to the following:-

(a) every large company; and
(b) _________________________; and
(c) every large overseas company; and
(d) every other company with 10 or more shareholders unless the company has opted out of compliance with the provision in accordance with section 207I; and
(e) every other company with fewer than 10 shareholders if the company has opted into compliance with the provision in accordance with section 207K.

every company that is a public entity

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Under section 200 of the Companies Act 1993, sections 201 and 202 apply to the following:-

(a) every large company; and
(b) every company that is a public entity; and
(c) every large overseas company; and
(d) _______________________________ unless the company has opted out of compliance with the provision in accordance with section 207I; and
(e) every other company with fewer than 10 shareholders if the company has opted into compliance with the provision in accordance with section 207K.

every other company with 10 or more shareholders

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Under section 200 of the Companies Act 1993, sections 201 and 202 apply to the following:-

unless the company has opted out of compliance

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Under section 200 of the Companies Act 1993, sections 201 and 202 apply to the following:-

(a) every large company; and
(b) every company that is a public entity; and
(c) every large overseas company; and
(d) every other company with 10 or more shareholders ________________________________ in accordance with section 207I; and
(e) every other company with fewer than 10 shareholders if the company has opted into compliance with the provision in accordance with section 207K.

unless the company has opted out of compliance with the provision

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Under section 200 of the Companies Act 1993, sections 201 and 202 apply to the following:-

(a) every large company; and
(b) every company that is a public entity; and
(c) every large overseas company; and
(d) every other company with 10 or more shareholders unless the company has opted out of compliance with the provision ______________________; and
(e) every other company with fewer than 10 shareholders if the company has opted into compliance with the provision in accordance with section 207K.

in accordance with section 207I

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Under section 200 of the Companies Act 1993, sections 201 and 202 apply to the following:-

(a) every large company; and
(b) every company that is a public entity; and
(c) every large overseas company; and
(d) every other company with 10 or more shareholders unless the company has opted out of compliance with the provision in accordance with section 207I; and
(e) ___________________________________ if the company has opted into compliance with the provision in accordance with section 207K.

every other company with fewer than 10 shareholders

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Under section 200 of the Companies Act 1993, sections 201 and 202 apply to the following:-

(a) every large company; and
(b) every company that is a public entity; and
(c) every large overseas company; and
(d) every other company with 10 or more shareholders unless the company has opted out of compliance with the provision in accordance with section 207I; and
(e) every other company with fewer than 10 shareholders ______________________________ in accordance with section 207K.

if the company has opted into compliance with the provision

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Under section 200 of the Companies Act 1993, sections 201 and 202 apply to the following:-

(a) every large company; and
(b) every company that is a public entity; and
(c) every large overseas company; and
(d) every other company with 10 or more shareholders unless the company has opted out of compliance with the provision in accordance with section 207I; and
(e) every other company with fewer than 10 shareholders if the company has opted _________ compliance with the provision in accordance with section 207K.

into

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Under section 200 of the Companies Act 1993, sections 201 and 202 apply to the following:-

in accordance with section 207K

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Under _______________________, every company or overseas company to which this section applies (A) must ensure that, within 5 months after the balance date of A, financial statements that comply with generally accepted accounting practice are—

(a) completed in relation to A and that balance date; and
(b) dated and signed on behalf of A by 2 directors of A, or, if A has only 1 director, by that director.

section 201 of the Companies Act 1993

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Under section 201 of the Companies Act 1993, every company or overseas company to which this section applies (A) must ensure that, ____________ after the balance date of A, financial statements that comply with generally accepted accounting practice are—

(a) completed in relation to A and that balance date; and
(b) dated and signed on behalf of A by 2 directors of A, or, if A has only 1 director, by that director.

within 5 months

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Under section 201 of the Companies Act 1993, every company or overseas company to which this section applies (A) must ensure that, within 5 months after the balance date of A, financial statements that comply with _______________________ are—

(a) completed in relation to A and that balance date; and
(b) dated and signed on behalf of A by 2 directors of A, or, if A has only 1 director, by that director.

generally accepted accounting practice

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(a) completed in relation to A and that balance date; and
(b) dated and ________ on behalf of A by 2 directors of A, or, if A has only 1 director, by that director.

signed

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(a) completed in relation to A and that balance date; and
(b) dated and signed on behalf of A ___________ of A, or, if A has only 1 director, by that director.

by 2 directors

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Under section _____________________, a company must have 1 or more directors.

section 150 of the Companies Act 1993

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Under section 150 of the Companies Act 1993, a company _______________________.

must have 1 or more directors

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Under ________________________,
A company must have—
(a) a name; and
(b) 1 or more shares; and
(c) 1 or more shareholders, having limited or unlimited liability for the obligations of the company; and
(d) 1 or more directors, of whom at least 1 must—
(i) live in New Zealand; or
(ii) live in an enforcement country and be a director of a body corporate that is incorporated in that enforcement country under a law that is equivalent to this Act.

section 10 of the Companies Act 1993

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Under section 10 of the Companies Act 1993,
A company must have—
(a) a _______; and
(b) 1 or more shares; and
(c) 1 or more shareholders, having limited or unlimited liability for the obligations of the company; and
(d) 1 or more directors, of whom at least 1 must—
(i) live in New Zealand; or
(ii) live in an enforcement country and be a director of a body corporate that is incorporated in that enforcement country under a law that is equivalent to this Act.

Name

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Under section 10 of the Companies Act 1993,
A company must have—
(a) a name; and
(b) ________________; and
(c) 1 or more shareholders, having limited or unlimited liability for the obligations of the company; and
(d) 1 or more directors, of whom at least 1 must—
(i) live in New Zealand; or
(ii) live in an enforcement country and be a director of a body corporate that is incorporated in that enforcement country under a law that is equivalent to this Act.

1 or more shares

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Under section 10 of the Companies Act 1993,
A company must have—
(a) a name; and
(b) 1 or more shares; and
(c) 1 or more shareholders, having limited or unlimited liability for the obligations of the company; and
(d) _______________, of whom at least 1 must—
(i) live in New Zealand; or
(ii) live in an enforcement country and be a director of a body corporate that is incorporated in that enforcement country under a law that is equivalent to this Act.

1 or more directors

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Under section 10 of the Companies Act 1993,
A company must have—
(a) a name; and
(b) 1 or more shares; and
(c) 1 or more shareholders, having limited or unlimited liability for the obligations of the company; and
(d) 1 or more directors, of whom _____________—
(i) live in New Zealand; or
(ii) live in an enforcement country and be a director of a body corporate that is incorporated in that enforcement country under a law that is equivalent to this Act.

at least 1 must

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Under section 10 of the Companies Act 1993,
A company must have—
(a) a name; and
(b) 1 or more shares; and
(c) 1 or more shareholders, having limited or unlimited liability for the obligations of the company; and
(d) 1 or more directors, of whom at least 1 must—
(i) _________________; or
(ii) live in an enforcement country and be a director of a body corporate that is incorporated in that enforcement country under a law that is equivalent to this Act.

live in New Zealand

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Under section 10 of the Companies Act 1993,
A company must have—
(a) a name; and
(b) 1 or more shares; and
(c) 1 or more shareholders, having limited or unlimited liability for the obligations of the company; and
(d) 1 or more directors, of whom at least 1 must—
(i) live in New Zealand; or
(ii) _______________________ and be a director of a body corporate that is incorporated in that enforcement country under a law that is equivalent to this Act.

live in an enforcement country

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Under section 10 of the Companies Act 1993,
A company must have—
(a) a name; and
(b) 1 or more shares; and
(c) 1 or more shareholders, having limited or unlimited liability for the obligations of the company; and
(d) 1 or more directors, of whom at least 1 must—
(i) live in New Zealand; or
(ii) live in an enforcement country _____________ be a director of a body corporate that is incorporated in that enforcement country under a law that is equivalent to this Act.

and

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Under section 10 of the Companies Act 1993,
A company must have—
(a) a name; and
(b) 1 or more shares; and
(c) 1 or more shareholders, having limited or unlimited liability for the obligations of the company; and
(d) 1 or more directors, of whom at least 1 must—
(i) live in New Zealand; or
(ii) live in an enforcement country and ____________________________________ under a law that is equivalent to this Act.

be a director of a body corporate that is incorporated in that enforcement country

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Enforcement countries are determined by the regulations. Currently, the only listed enforcement country is __________. Directors who are resident in an enforcement country must also be a director of a registered company (excluding a branch of an overseas company) in that country. Details of the company will need to be provided to the Companies Office. This will include the company’s registered name, number or identifier (if any) along with its address for service and registered office address.
https://www.heskethhenry.co.nz/Articles/x_post/new-director-and-disclosure-requirements-for-new-zealand-companies-00187.html

Australia

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Under what regulation was Australia made an enforcement country under the Companies Act 1993?

Companies Act 1993 Amendment Regulations (No 2) 2014

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Registering your company with the Companies Office
Before you start an application to incorporate a New Zealand company with the Companies Office, you must create an _____________ and reserve a company name. It costs $10 (plus GST) to reserve a company name and $105 (plus GST) to apply to incorporate a company.

Online account

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Registering your company with the Companies Office
Before you start an application to incorporate a New Zealand company with the Companies Office, you must create an online account and _______________. It costs $10 (plus GST) to reserve a company name and $105 (plus GST) to apply to incorporate a company.

reserve a company name

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Registering your company with the Companies Office
Before you start an application to incorporate a New Zealand company with the Companies Office, you must create an online account and reserve a company name. It costs ________________________and $105 (plus GST) to apply to incorporate a company.

$10 (plus GST) to reserve a company name

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Registering your company with the Companies Office
Before you start an application to incorporate a New Zealand company with the Companies Office, you must create an online account and reserve a company name. It costs $10 (plus GST) to reserve a company name and ________________________________.

$105 (plus GST) to apply to incorporate a company

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What is an UHC for the purposes of registration with the Companies Office?

Ultimate Holding Company

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What is an ultimate holding company (UHC) for the purposes of the Companies Act 1993?

a body corporate that—

(a) is a holding company of the company; and
(b) is itself not a subsidiary of any body corporate.

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What must you do when registering a company with the Companies Office if your company is controlled by a UHC?

State what type of company or entity the UHC is. You must also state its name, country of registration, registration number or code, if any, and registered office address.

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What does a company constitution do?

Sets out the rights, powers and duties of your company, its board, directors and shareholders.

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When you incorporate as a limited company you can:
• do so without a ______________
• buy one from a third party and upload it as part of your application, or
• prepare and upload a copy of your own ________________.

constitution

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When you incorporate as a limited company you can:
• ______________________
• buy one from a third party and upload it as part of your application, or
• prepare and upload a copy of your own constitution.

• do so without a constitution

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When you incorporate as a limited company you can:
• do so without a constitution
• buy one from a third party and _________________ or
• prepare and upload a copy of your own constitution.

upload it as part of your application

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When you incorporate as a limited company you can:
• do so without a constitution
• buy one from a third party and upload it as part of your application, or
• ___________________________________.

prepare and upload a copy of your own constitution

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Under __________________, a company satisfies the solvency test if—

(a) the company is able to pay its debts as they become due in the normal course of business; and
(b) the value of the company’s assets is greater than the value of its liabilities, including contingent liabilities.

section 4 of the Companies Act 1993

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Under section 4 of the Companies Act 1993, a ______________________ if—

company satisfies the solvency test

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Under section 4 of the Companies Act 1993, a company satisfies the solvency test if—

(a) the ________________________ in the normal course of business; and
(b) the value of the company’s assets is greater than the value of its liabilities, including contingent liabilities.

company is able to pay its debts as they become due

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Under section 4 of the Companies Act 1993, a company satisfies the solvency test if—

(a) the company is able to pay its debts as they become due __________________; and
(b) the value of the company’s assets is greater than the value of its liabilities, including contingent liabilities.

in the normal course of business

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Under section 4 of the Companies Act 1993, a company satisfies the solvency test if—

(a) the company is able to pay its debts as they become due in the normal course of business; and
(b) the ____________________________________, including contingent liabilities.

value of the company’s assets is greater than the value of its liabilities

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Under section 4 of the Companies Act 1993, a company satisfies the solvency test if—

(a) the company is able to pay its debts as they become due in the normal course of business; and
(b) the value of the company’s assets is greater than the value of its liabilities, __________________.

including contingent liabilities

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Give an example of an occasion where the solvency test needs to be met.

Makes a distribution by way of a dividend.

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The solvency test plays an important role in the management of companies. The solvency test is set out in s 4(1) of the Companies Act 1993 (the Act). The Act ________ require the solvency test to be met each day a company trades. However, the Act does require the solvency test to be met immediately after a company implements certain types of transaction. In most cases, a company that is prudently managed will meet the test without difficulty. However, if a company is marginally solvent, directors need to take particular care to satisfy themselves, when the transaction is authorised, that the company will meet the solvency test immediately after the transaction is implemented. Directors also need to continue to monitor the company’s solvency during the interim period between authorisation and implementation of the transaction.

by The FindLaw Team

does not

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The solvency test plays an important role in the management of companies. The solvency test is set out in s 4(1) of the Companies Act 1993 (the Act). The Act does not require the solvency test to be met each day a company trades. However, the Act _____ require the solvency test to be met immediately after a company implements certain types of transaction. In most cases, a company that is prudently managed will meet the test without difficulty. However, if a company is marginally solvent, directors need to take particular care to satisfy themselves, when the transaction is authorised, that the company will meet the solvency test immediately after the transaction is implemented. Directors also need to continue to monitor the company’s solvency during the interim period between authorisation and implementation of the transaction.
by The FindLaw Team

does

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Directors may be personally liable to the company under ________ of the Act if they fail to exercise the care, diligence and skill of a reasonable director, when determining whether the solvency test will be met. Failure to comply with the solvency certificate requirements of the Act may also constitute a breach of directors’ duties under s 134 of the Act not to contravene the Act. Entry into a transaction where the solvency test is not met may breach directors’ duties under ss 135 and 137 of the Act not to permit reckless trading, and not to incur certain obligations.

section 137

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Directors may be personally liable to the company under s 137 of the Act if they _____________________________, when determining whether the solvency test will be met. Failure to comply with the solvency certificate requirements of the Act may also constitute a breach of directors’ duties under s 134 of the Act not to contravene the Act. Entry into a transaction where the solvency test is not met may breach directors’ duties under ss 135 and 137 of the Act not to permit reckless trading, and not to incur certain obligations.

by The FindLaw Team

fail to exercise the care, diligence and skill of a reasonable director

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Directors may be personally liable to the company under s 137 of the Act if they fail to exercise the care, diligence and skill of a reasonable director, when determining whether the solvency test will be met. Failure to comply with the solvency certificate requirements of the Act may also constitute a breach of directors’ duties under ____________ of the Act not to contravene the Act. Entry into a transaction where the solvency test is not met may breach directors’ duties under ss 135 and 137 of the Act not to permit reckless trading, and not to incur certain obligations.

Section 134

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Directors may be personally liable to the company under s 137 of the Act if they fail to exercise the care, diligence and skill of a reasonable director, when determining whether the solvency test will be met. Failure to comply with the solvency certificate requirements of the Act may also constitute a breach of directors’ duties under s 134 of the Act _____________. Entry into a transaction where the solvency test is not met may breach directors’ duties under ss 135 and 137 of the Act not to permit reckless trading, and not to incur certain obligations.

by The FindLaw Team

not to contravene the Act

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Directors may be personally liable to the company under s 137 of the Act if they fail to exercise the care, diligence and skill of a reasonable director, when determining whether the solvency test will be met. Failure to comply with the solvency certificate requirements of the Act may also constitute a breach of directors’ duties under s 134 of the Act not to contravene the Act. Entry into a transaction where the solvency test is not met may breach directors’ duties under _____________of the Act not to permit reckless trading, and not to incur certain obligations.

Sections 135 and 137

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Directors may be personally liable to the company under s 137 of the Act if they fail to exercise the care, diligence and skill of a reasonable director, when determining whether the solvency test will be met. Failure to comply with the solvency certificate requirements of the Act may also constitute a breach of directors’ duties under s 134 of the Act not to contravene the Act. Entry into a transaction where the solvency test is not met may breach directors’ duties under ss 135 and 137 of the Act _______________, and not to incur certain obligations.

by The FindLaw Team

not to permit reckless trading

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Directors may be personally liable to the company under s 137 of the Act if they fail to exercise the care, diligence and skill of a reasonable director, when determining whether the solvency test will be met. Failure to comply with the solvency certificate requirements of the Act may also constitute a breach of directors’ duties under s 134 of the Act not to contravene the Act. Entry into a transaction where the solvency test is not met may breach directors’ duties under ss 135 and 137 of the Act not to permit reckless trading, and not to incur certain obligations.

not to incur certain obligations (director’s duty of care)

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The solvency test _____________ from paying dividends when the company cannot afford them, giving shareholders a false impression of the company’s financial situation.

protects shareholders

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The solvency test protects shareholders from paying dividends when _______________, giving shareholders a false impression of the company’s financial situation.

the company cannot afford them

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The solvency test protects shareholders from paying dividends when the company cannot afford them, giving shareholders _______________ of the company’s financial situation.

a false impression

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The solvency test protects shareholders from paying dividends when the company cannot afford them, giving shareholders a false impression _________________________.

of the company’s financial situation

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The solvency test protects shareholders from paying dividends when the company cannot afford them, giving shareholders ____________________.

a false impression of the company’s financial situation

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Under section 202 of the companies Act 1993, every company or overseas company to which this section applies (A) that has, on the balance date of A, _________________ must ensure that, within 5 months after that balance date, group financial statements that comply with generally accepted accounting practice.

1 or more subsidiaries

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Under section 202 of the companies Act 1993, every company or overseas company to which this section applies (A) that has, on the balance date of A, 1 or more subsidiaries must ensure that, ____________ after that balance date, group financial statements that comply with generally accepted accounting practice.

within 5 months

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Under section 202 of the companies Act 1993, every company or overseas company to which this section applies (A) that has, on the balance date of A, 1 or more subsidiaries must ensure that, within 5 months after that balance date, ________________ that comply with generally accepted accounting practice.

group financial statements

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Under section 202 of the companies Act 1993, every company or overseas company to which this section applies (A) that has, on the balance date of A, 1 or more subsidiaries must ensure that, within 5 months after that balance date, group financial statements that comply with ______________________.

generally accepted accounting practice

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____________________________ in the companies act 1993 has the same meaning as in section 8 of the Financial Reporting Act 2013.

Generally accepted accounting practice

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Generally accepted accounting practice in the ______________ has the same meaning as in section 8 of the Financial Reporting Act 2013.

Companies Act 1993

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Generally accepted accounting practice in the companies act 1993 has the same meaning as in ________________________.

section 8 of the Financial Reporting Act 2013

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Under section 8 of the Financial Reporting Act 2013, financial statements, group financial statements, a report, or other information complies with generally accepted accounting practice only if the report, statements, or information comply with—

(a) applicable financial reporting standards; and
(b) in relation to matters for which no provision is made in applicable financial reporting standards, an authoritative notice.

section 8 of the Financial Reporting Act 2013

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Under ____________________, financial statements, group financial statements, a report, or other information complies with generally accepted accounting practice only if the report, statements, or information comply with—

(a) applicable financial reporting standards; and
(b) in relation to matters for which no provision is made in applicable financial reporting standards, an authoritative notice.

section 8 of the Financial Reporting Act 2013

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Under section 8 of the financial reporting act 2013, financial statements, group financial statements, a report, or other information complies with ____________________ only if the report, statements, or information comply with—

(a) applicable financial reporting standards; and
(b) in relation to matters for which no provision is made in applicable financial reporting standards, an authoritative notice.

generally accepted accounting practice

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Under section 8 of the financial reporting act 2013, financial statements, group financial statements, a report, or other information complies with generally accepted accounting practice _________ the report, statements, or information comply with—

(a) applicable financial reporting standards; and
(b) in relation to matters for which no provision is made in applicable financial reporting standards, an authoritative notice.

only if

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Under section 8 of the financial reporting act 2013, financial statements, group financial statements, a report, or other information complies with generally accepted accounting practice only if the report, statements, or information comply with—

(a) __________________; and
(b) in relation to matters for which no provision is made in applicable financial reporting standards, an authoritative notice.

applicable financial reporting standards

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Under section 8 of the financial reporting act 2013, financial statements, group financial statements, a report, or other information complies with generally accepted accounting practice only if the report, statements, or information _________—

(a) applicable financial reporting standards; and
(b) in relation to matters for which no provision is made in applicable financial reporting standards, an authoritative notice.

comply with

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Under section 8 of the financial reporting act 2013, financial statements, group financial statements, a report, or other information complies with generally accepted accounting practice only if the report, statements, or information comply with—

(a) applicable financial reporting standards; and
(b) in relation to matters for which no provision is made in applicable financial reporting standards, _________________.

an authoritative notice

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A large company under section 198 of the Companies Act 1998 means a company that is large under __________ of the Financial Reporting Act 2013.

section 45

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A large company under _____________ means a company that is large under section 45 of the Financial Reporting Act 2013.

section 198 of the Companies Act 1993

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A large company under section 198 of the Companies Act 1993 means a company that is large under section 45 of the _____________________.

Financial Reporting Act 2013

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Section _____ requires that every company or overseas company to which section _____ applies must ensure that financial statements or group financial statements, prepared under sections 201, 202 or 204 are audited by a qualified auditor.

207

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Section 207 requires that every company or overseas company to which section 207 applies must ensure that financial statements or group financial statements, prepared under sections ____________ are audited by a qualified auditor.

201, 202 or 204

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audited

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qualified auditor

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Sections ______________ of the Companies Act 1993 deal with the requirements to prepare accounting statements in accordance with generally accepted accounting practice.

201, 202 or 204

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Sections 201, 202 or 204 of the _________________ deal with the requirements to prepare accounting statements in accordance with generally accepted accounting practice.

Companies Act 1993

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From a company’s perspective any transaction that might have the consequence of triggering _________________ usually results in them at least considering the consequences of this in detail.
The basic principle of a right to be bought out is that the company must either find you a buyer for your shares at “fair value,” which is not necessarily the last traded price for a listed company, or buy them back with the company’s funds.
Companies deal with this risk in a number of ways, all designed to ensure that shareholders are deprived practically of the right to elect minority buyout.

http://www.stuff.co.nz/business/blogs/stirring-the-pot/2926392/Minority-buyouts-the-Wall-St-walk

minority buy out entitlements

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From a company’s perspective any transaction that might have the consequence of triggering minority buy out entitlements usually results in them at least considering the consequences of this in detail.
The basic principle of a right to be bought out is that the company must either find you a buyer for your shares at “________,” which is not necessarily the last traded price for a listed company, or buy them back with the company’s funds.
Companies deal with this risk in a number of ways, all designed to ensure that shareholders are deprived practically of the right to elect minority buyout.

http://www.stuff.co.nz/business/blogs/stirring-the-pot/2926392/Minority-buyouts-the-Wall-St-walk

fair value

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From a company’s perspective any transaction that might have the consequence of triggering minority buy out entitlements usually results in them at least considering the consequences of this in detail.
The basic principle of a right to be bought out is that the company must either ___________ for your shares at “fair value,” which is not necessarily the last traded price for a listed company, or buy them back with the company’s funds.
Companies deal with this risk in a number of ways, all designed to ensure that shareholders are deprived practically of the right to elect minority buyout.

http://www.stuff.co.nz/business/blogs/stirring-the-pot/2926392/Minority-buyouts-the-Wall-St-walk

find you a buyer

From a company’s perspective any transaction that might have the consequence of triggering minority buy out entitlements usually results in them at least considering the consequences of this in detail.
The basic principle of a right to be bought out is that the company must either find you a buyer for your shares at “fair value,” which is not necessarily the last traded price for a listed company, or ______________________________.
Companies deal with this risk in a number of ways, all designed to ensure that shareholders are deprived practically of the right to elect minority buyout.

http://www.stuff.co.nz/business/blogs/stirring-the-pot/2926392/Minority-buyouts-the-Wall-St-walk

buy them back with the company’s funds

From a company’s perspective any transaction that might have the consequence of triggering minority buy out entitlements usually results in them at least considering the consequences of this in detail.
The basic principle of a right to be bought out is that the company must either find you a buyer for your shares at “fair value,” which is not necessarily the _____________________, or buy them back with the company’s funds.
Companies deal with this risk in a number of ways, all designed to ensure that shareholders are deprived practically of the right to elect minority buyout.
http://www.stuff.co.nz/business/blogs/stirring-the-pot/2926392/Minority-buyouts-the-Wall-St-walk

last traded price for a listed company

From a company’s perspective any transaction that might have the consequence of triggering minority buy out entitlements usually results in them at least considering the consequences of this in detail.
The basic principle of a right to be bought out is that the company must either find you a buyer for your shares at “fair value,” which is not necessarily the last traded price for a listed company, or buy them back with the company’s funds.
Companies deal with this risk in a number of ways, all designed to ensure that shareholders are deprived practically of the right to _________________.
http://www.stuff.co.nz/business/blogs/stirring-the-pot/2926392/Minority-buyouts-the-Wall-St-walk

elect minority buyout

What happens when a shareholder ______________ with the management of a company or with the strategy or decisions of the other shareholders?

Disaffected shareholders can sell their shares; or vote against management’s intentions using the democratic process governing shareholders’ powers and decisions within in the company’s constitutional arrangements (and/or the Companies Act 1993).

However, particularly in small companies, there may not be a market for the shares, and power blocks of shareholders with different views of the company’s management can exist.

The Court will generally uphold the rights of those power blocks in any deadlock or difference of between shareholders as to the management of the company, because the disaffected shareholder has accepted the commercial risk of the company and its democratic structure when investing, and the Court will merely insert its own view on commercial matters in preference of the other investing shareholders who have done the same thing.

http://www.petermccutcheon.co.nz/commercialcontract/Trust+busting.html

fundamentally disagrees

What happens when a shareholder fundamentally disagrees with the management of a company or with the strategy or decisions of the other shareholders?

________________ can sell their shares; or vote against management’s intentions using the democratic process governing shareholders’ powers and decisions within in the company’s constitutional arrangements (and/or the Companies Act 1993).

However, particularly in small companies, there may not be a market for the shares, and power blocks of shareholders with different views of the company’s management can exist.

http://www.petermccutcheon.co.nz/commercialcontract/Trust+busting.html

Disaffected shareholders

What happens when a shareholder fundamentally disagrees with the management of a company or with the strategy or decisions of the other shareholders?

Disaffected shareholders can ____________; or vote against management’s intentions using the democratic process governing shareholders’ powers and decisions within in the company’s constitutional arrangements (and/or the Companies Act 1993).

However, particularly in small companies, there may not be a market for the shares, and power blocks of shareholders with different views of the company’s management can exist.

http://www.petermccutcheon.co.nz/commercialcontract/Trust+busting.html

sell their shares

What happens when a shareholder fundamentally disagrees with the management of a company or with the strategy or decisions of the other shareholders?

Disaffected shareholders can sell their shares; or ____________________ using the democratic process governing shareholders’ powers and decisions within in the company’s constitutional arrangements (and/or the Companies Act 1993).

However, particularly in small companies, there may not be a market for the shares, and power blocks of shareholders with different views of the company’s management can exist.

http://www.petermccutcheon.co.nz/commercialcontract/Trust+busting.html

vote against management’s intentions

What happens when a shareholder fundamentally disagrees with the management of a company or with the strategy or decisions of the other shareholders?

However, particularly in _______________, there may not be a market for the shares, and power blocks of shareholders with different views of the company’s management can exist.

http://www.petermccutcheon.co.nz/commercialcontract/Trust+busting.html

small companies

What happens when a shareholder fundamentally disagrees with the management of a company or with the strategy or decisions of the other shareholders?

However, particularly in small companies, there may not be _______________, and power blocks of shareholders with different views of the company’s management can exist.

http://www.petermccutcheon.co.nz/commercialcontract/Trust+busting.html

a market for the shares

What happens when a shareholder fundamentally disagrees with the management of a company or with the strategy or decisions of the other shareholders?

However, particularly in small companies, there may not be a market for the shares and __________________________________ can exist.

power blocks of shareholders with different views of the company’s management

What happens when a shareholder fundamentally disagrees with the management of a company or with the strategy or decisions of the other shareholders?

However, particularly in small companies, there may not be a market for the shares, and power blocks of shareholders with different views of the company’s management___________.

http://www.petermccutcheon.co.nz/commercialcontract/Trust+busting.html

can exist

What happens when a shareholder fundamentally disagrees with the management of a company or with the strategy or decisions of the other shareholders?

However, particularly in small companies, there may not be a market for the shares, and power blocks of shareholders with different views of the company’s management can exist.

The Court will generally _______________________ in any deadlock or difference of between shareholders as to the management of the company, because the disaffected shareholder has accepted the commercial risk of the company and its democratic structure when investing, and the Court will merely insert its own view on commercial matters in preference of the other investing shareholders who have done the same thing.

http://www.petermccutcheon.co.nz/commercialcontract/Trust+busting.html

uphold the rights of those power blocks

What happens when a shareholder fundamentally disagrees with the management of a company or with the strategy or decisions of the other shareholders?

However, particularly in small companies, there may not be a market for the shares, and power blocks of shareholders with different views of the company’s management can exist.

The Court will generally uphold the rights of those power blocks in any deadlock or difference of between shareholders as to the management of the company, because ________________________________ and its democratic structure when investing, and the Court will merely insert its own view on commercial matters in preference of the other investing shareholders who have done the same thing.

http://www.petermccutcheon.co.nz/commercialcontract/Trust+busting.html

the disaffected shareholder has accepted the commercial risk of the company

The Court ___________ to stop out and out abuses of management power, however.

A shareholder can take a personal action against a director for any breach of a duty of care owed to the shareholder in certain circumstances (Section 169 of the Companies Act 1993).

A shareholder is entitled to request information from the company (Section 178).

The Court can make an order for the inspection and copying of documents on the application of a shareholder (Section 179).

Most prominently, there are broad “prejudiced shareholders” provisions in Section 174 of the Companies Act 1993 allowing the Court to make a broad range of orders on proof the “affairs of the company have been, … are …, or are likely to be conducted in a manner that is, … [has] been, … or [is] likely to be oppressive, unfairly discriminatory, or unfairly prejudicial to [a shareholder in the capacity of a shareholder]”.

Such orders can include requiring the company or any other person to buy the shareholder’s shares, pay compensation, regulating the ongoing conduct of the company’s affairs, or putting the company in liquidation.

"”Oppressive, unfairly discriminatory, or unfairly prejudicial” operation of a company’s affairs in respect of a shareholder may involve breaches of the company’s constitution or the Companies Act 1993, a want of good faith, a lack of honesty or moral conduct, or unequal treatment, but it may not.

The remedy of Section 174 does not extend to errors of judgement by management, inefficiency, or poor business management without distinct elements of bad faith or self-interest.

Judges also exercise restraint when assessing business strategy when a Section 174 application has been made. The remedy is an alternative to liquidation on the basis of “unjust” grounds, but the Courts will not allow Section 174 to be used to allow an exit from a shareholding on the basis of a mere disagreement over business strategy.

http://www.petermccutcheon.co.nz/commercialcontract/Trust+busting.html

will intervene

The Court will intervene ______________________, however.

A shareholder can take a personal action against a director for any breach of a duty of care owed to the shareholder in certain circumstances (Section 169 of the Companies Act 1993).

A shareholder is entitled to request information from the company (Section 178).

The Court can make an order for the inspection and copying of documents on the application of a shareholder (Section 179).

The remedy of Section 174 does not extend to errors of judgement by management, inefficiency, or poor business management without distinct elements of bad faith or self-interest.

http://www.petermccutcheon.co.nz/commercialcontract/Trust+busting.html

to stop out and out abuses of management power

The Court will intervene to stop out and out abuses of management power, however.

A shareholder can take ___________________ for any breach of a duty of care owed to the shareholder in certain circumstances (Section 169 of the Companies Act 1993).

A shareholder is entitled to request information from the company (Section 178).

The Court can make an order for the inspection and copying of documents on the application of a shareholder (Section 179).

The remedy of Section 174 does not extend to errors of judgement by management, inefficiency, or poor business management without distinct elements of bad faith or self-interest.

http://www.petermccutcheon.co.nz/commercialcontract/Trust+busting.html

a personal action against a director

The Court will intervene to stop out and out abuses of management power, however.

A shareholder can take a personal action against a director ____________________ in certain circumstances (Section 169 of the Companies Act 1993).

A shareholder is entitled to request information from the company (Section 178).

The Court can make an order for the inspection and copying of documents on the application of a shareholder (Section 179).

The remedy of Section 174 does not extend to errors of judgement by management, inefficiency, or poor business management without distinct elements of bad faith or self-interest.

http://www.petermccutcheon.co.nz/commercialcontract/Trust+busting.html

any breach of a duty of care owed to the shareholder

The Court will intervene to stop out and out abuses of management power, however.

A shareholder can take a personal action against a director for any breach of a duty of care owed to the shareholder in certain circumstances (____________ of the Companies Act 1993).

A shareholder is entitled to request information from the company (Section 178).

The Court can make an order for the inspection and copying of documents on the application of a shareholder (Section 179).

The remedy of Section 174 does not extend to errors of judgement by management, inefficiency, or poor business management without distinct elements of bad faith or self-interest.

http://www.petermccutcheon.co.nz/commercialcontract/Trust+busting.html

Section 169

The Court will intervene to stop out and out abuses of management power, however.

A shareholder can take a personal action against a director for any breach of a duty of care owed to the shareholder in certain circumstances (Section 169 of the Companies Act 1993).

A shareholder is entitled ___________________ (Section 178).

The Court can make an order for the inspection and copying of documents on the application of a shareholder (Section 179).

The remedy of Section 174 does not extend to errors of judgement by management, inefficiency, or poor business management without distinct elements of bad faith or self-interest.

http://www.petermccutcheon.co.nz/commercialcontract/Trust+busting.html

request information from the company

The Court will intervene to stop out and out abuses of management power, however.

A shareholder can take a personal action against a director for any breach of a duty of care owed to the shareholder in certain circumstances (Section 169 of the Companies Act 1993).

A shareholder is entitled to request information from the company (Section _______.

The Court can make an order for the inspection and copying of documents on the application of a shareholder (Section 179).

The remedy of Section 174 does not extend to errors of judgement by management, inefficiency, or poor business management without distinct elements of bad faith or self-interest.

http://www.petermccutcheon.co.nz/commercialcontract/Trust+busting.html

178

The Court will intervene to stop out and out abuses of management power, however.

A shareholder can take a personal action against a director for any breach of a duty of care owed to the shareholder in certain circumstances (Section 169 of the Companies Act 1993).

A shareholder is entitled to request information from the company (Section 178).

The ___________ can make an order for the inspection and copying of documents on the application of a shareholder (Section 179).

The remedy of Section 174 does not extend to errors of judgement by management, inefficiency, or poor business management without distinct elements of bad faith or self-interest.

http://www.petermccutcheon.co.nz/commercialcontract/Trust+busting.html

Court

The Court will intervene to stop out and out abuses of management power, however.

A shareholder can take a personal action against a director for any breach of a duty of care owed to the shareholder in certain circumstances (Section 169 of the Companies Act 1993).

A shareholder is entitled to request information from the company (Section 178).

The Court can ____________________ on the application of a shareholder (Section 179).

The remedy of Section 174 does not extend to errors of judgement by management, inefficiency, or poor business management without distinct elements of bad faith or self-interest.

http://www.petermccutcheon.co.nz/commercialcontract/Trust+busting.html

make an order for the inspection and copying of documents

The Court will intervene to stop out and out abuses of management power, however.

A shareholder can take a personal action against a director for any breach of a duty of care owed to the shareholder in certain circumstances (Section 169 of the Companies Act 1993).

A shareholder is entitled to request information from the company (Section 178).

The Court can make an order for the inspection and copying of documents on the application of a shareholder (Section______).

The remedy of Section 174 does not extend to errors of judgement by management, inefficiency, or poor business management without distinct elements of bad faith or self-interest.

http://www.petermccutcheon.co.nz/commercialcontract/Trust+busting.html

179

The Court will intervene to stop out and out abuses of management power, however.

A shareholder can take a personal action against a director for any breach of a duty of care owed to the shareholder in certain circumstances (Section 169 of the Companies Act 1993).

A shareholder is entitled to request information from the company (Section 178).

The Court can make an order for the inspection and copying of documents on the application of a shareholder (Section 179).

Most prominently, there are broad “_______________” provisions in Section 174 of the Companies Act 1993 allowing the Court to make a broad range of orders on proof the “affairs of the company have been, … are …, or are likely to be conducted in a manner that is, … [has] been, … or [is] likely to be oppressive, unfairly discriminatory, or unfairly prejudicial to [a shareholder in the capacity of a shareholder]”.

The remedy of Section 174 does not extend to errors of judgement by management, inefficiency, or poor business management without distinct elements of bad faith or self-interest.

http://www.petermccutcheon.co.nz/commercialcontract/Trust+busting.html

prejudiced shareholders

The Court will intervene to stop out and out abuses of management power, however.

A shareholder can take a personal action against a director for any breach of a duty of care owed to the shareholder in certain circumstances (Section 169 of the Companies Act 1993).

A shareholder is entitled to request information from the company (Section 178).

The Court can make an order for the inspection and copying of documents on the application of a shareholder (Section 179).

The remedy of Section 174 does not extend to errors of judgement by management, inefficiency, or poor business management without distinct elements of bad faith or self-interest.

http://www.petermccutcheon.co.nz/commercialcontract/Trust+busting.html

174

The Court will intervene to stop out and out abuses of management power, however.

A shareholder can take a personal action against a director for any breach of a duty of care owed to the shareholder in certain circumstances (Section 169 of the Companies Act 1993).

A shareholder is entitled to request information from the company (Section 178).

The Court can make an order for the inspection and copying of documents on the application of a shareholder (Section 179).

Most prominently, there are broad “prejudiced shareholders” provisions in Section 174 of the Companies Act 1993 allowing the Court to make a broad range of orders on proof the “affairs of the company have been, … are …, or are likely to be conducted in a manner that is, … [has] been, … or [is] likely to be _________________________ to [a shareholder in the capacity of a shareholder]”.

The remedy of Section 174 does not extend to errors of judgement by management, inefficiency, or poor business management without distinct elements of bad faith or self-interest.

http://www.petermccutcheon.co.nz/commercialcontract/Trust+busting.html

oppressive, unfairly discriminatory, or unfairly prejudicial

The Court will intervene to stop out and out abuses of management power, however.

A shareholder can take a personal action against a director for any breach of a duty of care owed to the shareholder in certain circumstances (Section 169 of the Companies Act 1993).

A shareholder is entitled to request information from the company (Section 178).

The Court can make an order for the inspection and copying of documents on the application of a shareholder (Section 179).

The remedy of Section 174 does not extend to errors of judgement by management, inefficiency, or poor business management without distinct elements of bad faith or self-interest.

http://www.petermccutcheon.co.nz/commercialcontract/Trust+busting.html

capacity of a shareholder

The Court will intervene to stop out and out abuses of management power, however.

A shareholder can take a personal action against a director for any breach of a duty of care owed to the shareholder in certain circumstances (Section 169 of the Companies Act 1993).

A shareholder is entitled to request information from the company (Section 178).

The Court can make an order for the inspection and copying of documents on the application of a shareholder (Section 179).

The remedy of Section 174 does not extend to errors of judgement by management, inefficiency, or poor business management without distinct elements of bad faith or self-interest.

http://www.petermccutcheon.co.nz/commercialcontract/Trust+busting.html

requiring the company or any other person to buy the shareholder’s shares

The Court will intervene to stop out and out abuses of management power, however.

A shareholder can take a personal action against a director for any breach of a duty of care owed to the shareholder in certain circumstances (Section 169 of the Companies Act 1993).

A shareholder is entitled to request information from the company (Section 178).

The Court can make an order for the inspection and copying of documents on the application of a shareholder (Section 179).

Such orders can include requiring the company or any other person to buy the shareholder’s shares, _____________, regulating the ongoing conduct of the company’s affairs, or putting the company in liquidation.

The remedy of Section 174 does not extend to errors of judgement by management, inefficiency, or poor business management without distinct elements of bad faith or self-interest.

http://www.petermccutcheon.co.nz/commercialcontract/Trust+busting.html

pay compensation

The Court will intervene to stop out and out abuses of management power, however.

A shareholder can take a personal action against a director for any breach of a duty of care owed to the shareholder in certain circumstances (Section 169 of the Companies Act 1993).

A shareholder is entitled to request information from the company (Section 178).

The Court can make an order for the inspection and copying of documents on the application of a shareholder (Section 179).

Such orders can include requiring the company or any other person to buy the shareholder’s shares, pay compensation, __________________, or putting the company in liquidation.

The remedy of Section 174 does not extend to errors of judgement by management, inefficiency, or poor business management without distinct elements of bad faith or self-interest.

http://www.petermccutcheon.co.nz/commercialcontract/Trust+busting.html

regulating the ongoing conduct of the company’s affairs

The Court will intervene to stop out and out abuses of management power, however.

A shareholder can take a personal action against a director for any breach of a duty of care owed to the shareholder in certain circumstances (Section 169 of the Companies Act 1993).

A shareholder is entitled to request information from the company (Section 178).

The Court can make an order for the inspection and copying of documents on the application of a shareholder (Section 179).

The remedy of Section 174 does not extend to errors of judgement by management, inefficiency, or poor business management without distinct elements of bad faith or self-interest.

http://www.petermccutcheon.co.nz/commercialcontract/Trust+busting.html

putting the company in liquidation

The Court will intervene to stop out and out abuses of management power, however.

A shareholder can take a personal action against a director for any breach of a duty of care owed to the shareholder in certain circumstances (Section 169 of the Companies Act 1993).

A shareholder is entitled to request information from the company (Section 178).

The Court can make an order for the inspection and copying of documents on the application of a shareholder (Section 179).

The remedy of Section 174 _________________, inefficiency, or poor business management without distinct elements of bad faith or self-interest.

http://www.petermccutcheon.co.nz/commercialcontract/Trust+busting.html

does not extend to errors of judgement by management

The Court will intervene to stop out and out abuses of management power, however.

A shareholder can take a personal action against a director for any breach of a duty of care owed to the shareholder in certain circumstances (Section 169 of the Companies Act 1993).

A shareholder is entitled to request information from the company (Section 178).

The Court can make an order for the inspection and copying of documents on the application of a shareholder (Section 179).

The remedy of Section 174 does not extend to errors of judgement by management, __________________ without distinct elements of bad faith or self-interest.

http://www.petermccutcheon.co.nz/commercialcontract/Trust+busting.html

inefficiency, or poor business management

The Court will intervene to stop out and out abuses of management power, however.

A shareholder can take a personal action against a director for any breach of a duty of care owed to the shareholder in certain circumstances (Section 169 of the Companies Act 1993).

A shareholder is entitled to request information from the company (Section 178).

The Court can make an order for the inspection and copying of documents on the application of a shareholder (Section 179).

The remedy of Section 174 does not extend to errors of judgement by management, inefficiency, or poor business management _____________________________.

http://www.petermccutcheon.co.nz/commercialcontract/Trust+busting.html

without distinct elements of bad faith or self-interest

The Court will intervene to stop out and out abuses of management power, however.

A shareholder can take a personal action against a director for any breach of a duty of care owed to the shareholder in certain circumstances (Section 169 of the Companies Act 1993).

A shareholder is entitled to request information from the company (Section 178).

The Court can make an order for the inspection and copying of documents on the application of a shareholder (Section 179).

The remedy of Section 174 does not extend to errors of judgement by management, inefficiency, or poor business management without distinct elements of bad faith or self-interest.

Judges also _____________ when assessing business strategy when a Section 174 application has been made. The remedy is an alternative to liquidation on the basis of “unjust” grounds, but the Courts will not allow Section 174 to be used to allow an exit from a shareholding on the basis of a mere disagreement over business strategy.

http://www.petermccutcheon.co.nz/commercialcontract/Trust+busting.html

exercise restraint

The Court will intervene to stop out and out abuses of management power, however.

A shareholder can take a personal action against a director for any breach of a duty of care owed to the shareholder in certain circumstances (Section 169 of the Companies Act 1993).

A shareholder is entitled to request information from the company (Section 178).

The Court can make an order for the inspection and copying of documents on the application of a shareholder (Section 179).

The remedy of Section 174 does not extend to errors of judgement by management, inefficiency, or poor business management without distinct elements of bad faith or self-interest.

Judges also exercise restraint when assessing business strategy when a Section 174 application has been made. The remedy is an alternative to liquidation on the basis of “unjust” grounds, but the Courts ______________________________ on the basis of a mere disagreement over business strategy.

http://www.petermccutcheon.co.nz/commercialcontract/Trust+busting.html

will not allow Section 174 to be used to allow an exit from a shareholding

The Court will intervene to stop out and out abuses of management power, however.

A shareholder can take a personal action against a director for any breach of a duty of care owed to the shareholder in certain circumstances (Section 169 of the Companies Act 1993).

A shareholder is entitled to request information from the company (Section 178).

The Court can make an order for the inspection and copying of documents on the application of a shareholder (Section 179).

The remedy of Section 174 does not extend to errors of judgement by management, inefficiency, or poor business management without distinct elements of bad faith or self-interest.

http://www.petermccutcheon.co.nz/commercialcontract/Trust+busting.html

on the basis of a mere disagreement over business strategy

The Court will intervene to stop out and out abuses of management power, however.

A shareholder can take a personal action against a director for any breach of a duty of care owed to the shareholder in certain circumstances (Section 169 of the Companies Act 1993).

A shareholder is entitled to request information from the company (Section 178).

The Court can make an order for the inspection and copying of documents on the application of a shareholder (Section 179).

The remedy of Section 174 does not extend to errors of judgement by management, inefficiency, or poor business management without distinct elements of bad faith or self-interest.

http://www.petermccutcheon.co.nz/commercialcontract/Trust+busting.html

capacity of a shareholder

The Court will intervene to stop out and out abuses of management power, however.

A shareholder can take a personal action against a director for any breach of a duty of care owed to the shareholder in certain circumstances (Section 169 of the Companies Act 1993).

A shareholder is entitled to request information from the company (Section 178).

The Court can make an order for the inspection and copying of documents on the application of a shareholder (Section 179).

Such orders can include _____________________, pay compensation, regulating the ongoing conduct of the company’s affairs, or putting the company in liquidation.

The remedy of Section 174 does not extend to errors of judgement by management, inefficiency, or poor business management without distinct elements of bad faith or self-interest.

http://www.petermccutcheon.co.nz/commercialcontract/Trust+busting.html

requiring the company or any other person to buy the shareholder’s shares

Let us start with why ______________ are a feature of company law at all.
Firstly, if you buy into a company that you thought was running a hotel and the majority of owners decide that they want to sell the hotels and instead move into the production of confectionary, then you should be entitled to have your shares bought back to enable you to find another investment in your sector of choice, hotels.
Any change to a company’s business model that falls within the definition of major transactions requires under the Companies Act a 75% resolution to be passed and any such resolution triggers minority buy out rights.
The second special resolution requirement is any vote on the company’s constitution. Why is that? Because the company’s constitution is its contract with its owners and if the majority wants to rewrite that contract the minority is entitled to say “take me out baby.”
http://www.stuff.co.nz/business/blogs/stirring-the-pot/2926392/Minority-buyouts-the-Wall-St-walk

minority buy out rights

Let us start with why minority buy out rights are a feature of company law at all.
Firstly, if you buy into a company that you thought was running a hotel and the majority of owners decide that they want to sell the hotels and instead move into the production of confectionary, then you should be entitled to have your shares bought back to enable you to find another investment in your sector of choice, hotels.
Any change to a company’s business model that falls within the definition of _______________requires under the Companies Act a 75% resolution to be passed and any such resolution triggers minority buy out rights.
The second special resolution requirement is any vote on the company’s constitution. Why is that? Because the company’s constitution is its contract with its owners and if the majority wants to rewrite that contract the minority is entitled to say “take me out baby.”
http://www.stuff.co.nz/business/blogs/stirring-the-pot/2926392/Minority-buyouts-the-Wall-St-walk

major transactions

Let us start with why minority buy out rights are a feature of company law at all.
Firstly, if you buy into a company that you thought was running a hotel and the majority of owners decide that they want to sell the hotels and instead move into the production of confectionary, then you should be entitled to have your shares bought back to enable you to find another investment in your sector of choice, hotels.
Any change to a company’s business model that falls within the definition of major transactions requires under the Companies Act a 75% resolution to be passed and any such resolution triggers minority buy out rights.
The second special resolution requirement is any vote on the company’s constitution. Why is that? Because the company’s constitution is its contract with its owners and if the majority wants to rewrite that contract the minority is entitled to say “take me out baby.”
http://www.stuff.co.nz/business/blogs/stirring-the-pot/2926392/Minority-buyouts-the-Wall-St-walk

any vote on the company’s constitution

Let us start with why minority buy out rights are a feature of company law at all.
Firstly, if you buy into a company that you thought was running a hotel and the majority of owners decide that they want to sell the hotels and instead move into the production of confectionary, then you should be entitled to have your shares bought back to enable you to find another investment in your sector of choice, hotels.
Any change to a company’s business model that falls within the definition of major transactions requires under the Companies Act a 75% resolution to be passed and any such resolution triggers minority buy out rights.
The second special resolution requirement is any vote on the company’s constitution. Why is that? Because the _______________________ and if the majority wants to rewrite that contract the minority is entitled to say “take me out baby.”
http://www.stuff.co.nz/business/blogs/stirring-the-pot/2926392/Minority-buyouts-the-Wall-St-walk

company’s constitution is its contract with its owners

In the context of listed companies where shares are able to be traded, the issue becomes a little more complex. Before a transaction is announced such companies will have a price. Remember markets are efficient so the presumption of a ________________ is usually the start point for fair value. After the announcement of a major transaction the share price reacts based on both the nature of the transition and the uncertainty as to the voting outcome.
Then finally post the certainty of the vote the share price reacts again. Of course all of these reactions are rational as the market is efficient. Thus if the price falls a shareholder can sell the shares and simply claim damages. But not quite. Buy out rights are a right to be bought out, not a right to damages. If the share price rises then there is no damage, and the minority can sell at a price higher than fair value.
http://www.stuff.co.nz/business/blogs/stirring-the-pot/2926392/Minority-buyouts-the-Wall-St-walk

pre-announcement share price

In the context of listed companies where shares are able to be traded, the issue becomes a little more complex. Before a transaction is announced such companies will have a price. Remember markets are efficient so the presumption of a pre-announcement share price is usually the start point for __________. After the announcement of a major transaction the share price reacts based on both the nature of the transition and the uncertainty as to the voting outcome.
Then finally post the certainty of the vote the share price reacts again. Of course all of these reactions are rational as the market is efficient. Thus if the price falls a shareholder can sell the shares and simply claim damages. But not quite. Buy out rights are a right to be bought out, not a right to damages. If the share price rises then there is no damage, and the minority can sell at a price higher than fair value.
http://www.stuff.co.nz/business/blogs/stirring-the-pot/2926392/Minority-buyouts-the-Wall-St-walk

fair value

In the context of listed companies where shares are able to be traded, the issue becomes a little more complex. Before a transaction is announced such companies will have a price. Remember markets are efficient so the presumption of a pre-announcement share price is usually the start point for fair value. After the announcement of a major transaction the share price reacts based on both the nature of the transition and the uncertainty as to the voting outcome.
Then finally post the certainty of the vote the share price reacts again. Of course all of these reactions are rational as the market is efficient. Thus if the price falls a shareholder can sell the shares and simply claim damages. But not quite. __________________________________. If the share price rises then there is no damage, and the minority can sell at a price higher than fair value.
http://www.stuff.co.nz/business/blogs/stirring-the-pot/2926392/Minority-buyouts-the-Wall-St-walk

Buy out rights are a right to be bought out, not a right to damages

In the context of listed companies where shares are able to be traded, the issue becomes a little more complex. Before a transaction is announced such companies will have a price. Remember markets are efficient so the presumption of a pre-announcement share price is usually the start point for fair value. After the announcement of a major transaction the share price reacts based on both the nature of the transition and the uncertainty as to the voting outcome.
Then finally post the certainty of the vote the share price reacts again. Of course all of these reactions are rational as the market is efficient. Thus if the price falls a shareholder can sell the shares and simply claim damages. But not quite. Buy out rights are a right to be bought out, not a right to damages. If the share price rises then there is ___________, and the minority can sell at a price higher than fair value.
http://www.stuff.co.nz/business/blogs/stirring-the-pot/2926392/Minority-buyouts-the-Wall-St-walk

no damage

In the context of listed companies where shares are able to be traded, the issue becomes a little more complex. Before a transaction is announced such companies will have a price. Remember markets are efficient so the presumption of a pre-announcement share price is usually the start point for fair value. After the announcement of a major transaction the share price reacts based on both the nature of the transition and the uncertainty as to the voting outcome.
Then finally post the certainty of the vote the share price reacts again. Of course all of these reactions are rational as the market is efficient. Thus if the price falls a shareholder can sell the shares and simply claim damages. But not quite. Buy out rights are a right to be bought out, not a right to damages. If the share price rises then there is no damage, and the minority can sell at a price higher than _______.
http://www.stuff.co.nz/business/blogs/stirring-the-pot/2926392/Minority-buyouts-the-Wall-St-walk

fair value

Thus in most jurisdictions minority buy outs of listed companies is _____________, as the share markets in question are highly liquid, and arguably mildly efficient. In NZ this is not the case.
Many of our listed companies have very little trading volume and it is not hard to accumulate a holding that due to its size becomes relatively illiquid. Also it is not uncommon in NZ to see shares trading at below asset backing by a substantial margin even when that asset backing is cash. In such situations is the market price fair value?

http://www.stuff.co.nz/business/blogs/stirring-the-pot/2926392/Minority-buyouts-the-Wall-St-walk

not a major issue

Thus in most jurisdictions minority buy outs of listed companies is not major issue, as the share markets in question are ____________, and arguably mildly efficient. In NZ this is not the case.
Many of our listed companies have very little trading volume and it is not hard to accumulate a holding that due to its size becomes relatively illiquid. Also it is not uncommon in NZ to see shares trading at below asset backing by a substantial margin even when that asset backing is cash. In such situations is the market price fair value?

http://www.stuff.co.nz/business/blogs/stirring-the-pot/2926392/Minority-buyouts-the-Wall-St-walk

highly liquid

Thus in most jurisdictions minority buy outs of listed companies is not major issue, as the share markets in question are highly liquid, and arguably _____________. In NZ this is not the case.
Many of our listed companies have very little trading volume and it is not hard to accumulate a holding that due to its size becomes relatively illiquid. Also it is not uncommon in NZ to see shares trading at below asset backing by a substantial margin even when that asset backing is cash. In such situations is the market price fair value?

http://www.stuff.co.nz/business/blogs/stirring-the-pot/2926392/Minority-buyouts-the-Wall-St-walk

mildly efficient

Thus in most jurisdictions minority buy outs of listed companies is not major issue, as the share markets in question are highly liquid, and arguably mildly efficient. In NZ this is _____________.
Many of our listed companies have very little trading volume and it is not hard to accumulate a holding that due to its size becomes relatively illiquid. Also it is not uncommon in NZ to see shares trading at below asset backing by a substantial margin even when that asset backing is cash. In such situations is the market price fair value?

http://www.stuff.co.nz/business/blogs/stirring-the-pot/2926392/Minority-buyouts-the-Wall-St-walk

not the case

Thus in most jurisdictions minority buy outs of listed companies is not major issue, as the share markets in question are highly liquid, and arguably mildly efficient. In NZ this is not the case.
Many of our listed companies have _________________ and it is not hard to accumulate a holding that due to its size becomes relatively illiquid. Also it is not uncommon in NZ to see shares trading at below asset backing by a substantial margin even when that asset backing is cash. In such situations is the market price fair value?

http://www.stuff.co.nz/business/blogs/stirring-the-pot/2926392/Minority-buyouts-the-Wall-St-walk

very little trading volume

Thus in most jurisdictions minority buy outs of listed companies is not major issue, as the share markets in question are highly liquid, and arguably mildly efficient. In NZ this is not the case.
Many of our listed companies have very little trading volume and it is ___________________________________. Also it is not uncommon in NZ to see shares trading at below asset backing by a substantial margin even when that asset backing is cash. In such situations is the market price fair value?

not hard to accumulate a holding that due to its size becomes relatively illiquid

Thus in most jurisdictions minority buy outs of listed companies is not major issue, as the share markets in question are highly liquid, and arguably mildly efficient. In NZ this is not the case.
Many of our listed companies have very little trading volume and it is not hard to accumulate a holding that due to its size becomes relatively illiquid. Also it is ________________ to see shares trading at below asset backing by a substantial margin even when that asset backing is cash. In such situations is the market price fair value?

http://www.stuff.co.nz/business/blogs/stirring-the-pot/2926392/Minority-buyouts-the-Wall-St-walk

not uncommon in NZ

Thus in most jurisdictions minority buy outs of listed companies is not major issue, as the share markets in question are highly liquid, and arguably mildly efficient. In NZ this is not the case.
Many of our listed companies have very little trading volume and it is not hard to accumulate a holding that due to its size becomes relatively illiquid. Also it is not uncommon in NZ to see _______________________ by a substantial margin even when that asset backing is cash. In such situations is the market price fair value?

http://www.stuff.co.nz/business/blogs/stirring-the-pot/2926392/Minority-buyouts-the-Wall-St-walk

shares trading at below asset backing

Thus in most jurisdictions minority buy outs of listed companies is not major issue, as the share markets in question are highly liquid, and arguably mildly efficient. In NZ this is not the case.
Many of our listed companies have very little trading volume and it is not hard to accumulate a holding that due to its size becomes relatively illiquid. Also it is not uncommon in NZ to see shares trading at below asset backing by a _____________ even when that asset backing is cash. In such situations is the market price fair value?

http://www.stuff.co.nz/business/blogs/stirring-the-pot/2926392/Minority-buyouts-the-Wall-St-walk

substantial margin

Thus in most jurisdictions minority buy outs of listed companies is not major issue, as the share markets in question are highly liquid, and arguably mildly efficient. In NZ this is not the case.
Many of our listed companies have very little trading volume and it is not hard to accumulate a holding that due to its size becomes relatively illiquid. Also it is not uncommon in NZ to see shares trading at below asset backing by a substantial margin even when that asset backing _____________. In such situations is the market price fair value?

http://www.stuff.co.nz/business/blogs/stirring-the-pot/2926392/Minority-buyouts-the-Wall-St-walk

is cash

Thus in most jurisdictions minority buy outs of listed companies is not major issue, as the share markets in question are highly liquid, and arguably mildly efficient. In NZ this is not the case.
Many of our listed companies have very little trading volume and it is not hard to accumulate a holding that due to its size becomes relatively illiquid. Also it is not uncommon in NZ to see shares trading at below asset backing by a substantial margin even when that asset backing is cash. In such situations is the market price ____________?

http://www.stuff.co.nz/business/blogs/stirring-the-pot/2926392/Minority-buyouts-the-Wall-St-walk

fair value

Because companies identify the risk that fair value might be above ___________, on major transactions in some instances the transactions are contingent not only on the passing of a resolution but on the minorities not exercising minority buyout to more than x% of the share register.
This occurred in the Fletcher Forests resolutions a number of years ago, which were defeated. More on this is a subsequent blog on meeting management and proxy voting scams. It has been evident in other special resolutions as well. This does empower minorities, arguably overly empowering them.
Thus it is better where possible to completely avoid having to even confront the issue. Thus most companies have stratagems in place to completely avoid ever passing a special resolution and thus exposing themselves to the trigger of minority buyout.

http://www.stuff.co.nz/business/blogs/stirring-the-pot/2926392/Minority-buyouts-the-Wall-St-walk

market price

Because companies identify the risk that fair value might be above market price, on major transactions in some instances the transactions are contingent ____________________ but on the minorities not exercising minority buyout to more than x% of the share register.

This occurred in the Fletcher Forests resolutions a number of years ago, which were defeated. More on this is a subsequent blog on meeting management and proxy voting scams. It has been evident in other special resolutions as well. This does empower minorities, arguably overly empowering them.
Thus it is better where possible to completely avoid having to even confront the issue. Thus most companies have stratagems in place to completely avoid ever passing a special resolution and thus exposing themselves to the trigger of minority buyout.

http://www.stuff.co.nz/business/blogs/stirring-the-pot/2926392/Minority-buyouts-the-Wall-St-walk

not only on the passing of a resolution

Because companies identify the risk that fair value might be above market price, on major transactions in some instances the transactions are contingent not only on the passing of a resolution but on the _________________ to more than x% of the share register.
This occurred in the Fletcher Forests resolutions a number of years ago, which were defeated. More on this is a subsequent blog on meeting management and proxy voting scams. It has been evident in other special resolutions as well. This does empower minorities, arguably overly empowering them.
Thus it is better where possible to completely avoid having to even confront the issue. Thus most companies have stratagems in place to completely avoid ever passing a special resolution and thus exposing themselves to the trigger of minority buyout.

http://www.stuff.co.nz/business/blogs/stirring-the-pot/2926392/Minority-buyouts-the-Wall-St-walk

minorities not exercising minority buyout

Because companies identify the risk that fair value might be above market price, on major transactions in some instances the transactions are contingent not only on the passing of a resolution but on the minorities not exercising minority buyout to ___________________.
This occurred in the Fletcher Forests resolutions a number of years ago, which were defeated. More on this is a subsequent blog on meeting management and proxy voting scams. It has been evident in other special resolutions as well. This does empower minorities, arguably overly empowering them.
Thus it is better where possible to completely avoid having to even confront the issue. Thus most companies have stratagems in place to completely avoid ever passing a special resolution and thus exposing themselves to the trigger of minority buyout.

http://www.stuff.co.nz/business/blogs/stirring-the-pot/2926392/Minority-buyouts-the-Wall-St-walk

more than x% of the share register

Because companies identify the risk that fair value might be above market price, on major transactions in some instances the transactions are contingent not only on the passing of a resolution but on the minorities not exercising minority buyout to more than x% of the share register.
This occurred in the Fletcher Forests resolutions a number of years ago, which were defeated. More on this is a subsequent blog on meeting management and proxy voting scams. It has been evident in other special resolutions as well. This does empower minorities, __________________.
Thus it is better where possible to completely avoid having to even confront the issue. Thus most companies have stratagems in place to completely avoid ever passing a special resolution and thus exposing themselves to the trigger of minority buyout.

http://www.stuff.co.nz/business/blogs/stirring-the-pot/2926392/Minority-buyouts-the-Wall-St-walk

arguably overly empowering them

Because companies identify the risk that fair value might be above market price, on major transactions in some instances the transactions are contingent not only on the passing of a resolution but on the minorities not exercising minority buyout to more than x% of the share register.
This occurred in the Fletcher Forests resolutions a number of years ago, which were defeated. More on this is a subsequent blog on meeting management and proxy voting scams. It has been evident in other special resolutions as well. This does empower minorities, arguably overly empowering them.
Thus it is better where possible to completely avoid having to even confront the issue. Thus most companies have stratagems in place ________________________ and thus exposing themselves to the trigger of minority buyout.

http://www.stuff.co.nz/business/blogs/stirring-the-pot/2926392/Minority-buyouts-the-Wall-St-walk

to completely avoid ever passing a special resolution

Because companies identify the risk that fair value might be above market price, on major transactions in some instances the transactions are contingent not only on the passing of a resolution but on the minorities not exercising minority buyout to more than x% of the share register.
This occurred in the Fletcher Forests resolutions a number of years ago, which were defeated. More on this is a subsequent blog on meeting management and proxy voting scams. It has been evident in other special resolutions as well. This does empower minorities, arguably overly empowering them.
Thus it is better where possible to completely avoid having to even confront the issue. Thus most companies have stratagems in place to completely avoid ever passing a special resolution and thus exposing themselves to the ___________________.

http://www.stuff.co.nz/business/blogs/stirring-the-pot/2926392/Minority-buyouts-the-Wall-St-walk

trigger of minority buyout

Thus it is better where possible to completely avoid having to even confront the issue. Thus most companies have stratagems in place to completely avoid ever passing a special resolution and thus exposing themselves to the trigger of minority buyout.
In my submission on the proposed reforms of the minority buy out sections of the Companies Act this was my main focus as the Act as previously constructed was more or less adequate.
Expect for the processes by which fair value was established and where the costs fell, as if the trigger was not fixed the mechanism was not relevant as it would never be used. The mechanism has been fixed but the trigger is still as it has always been and thus is easily circumvented by major shareholders and company management.
The first major issue is this. Most listed companies are simply holding companies and it is subsidiaries that conduct the business of the group. What is more this is how it should be in order that the risk of default is well covered in a multifaceted group.
And of course when a new business is to be bought, or an old one is to be sold, it is the subsidiary that normally does that, not the parent. In rare circumstances it might be the shares in the subsidiary that are sold instead. If it is the subsidiary completing the transaction then it is a major transaction for the subsidiary and the shareholders in the subsidiary vote on it.
This, of course, is the management and board of the parent not the shareholders in the listed parent. The transaction under the Companies Act never comes to shareholders to be approved and no special resolution is required to be passed and no minority buy out rights are triggered. Thus you can buy a hotel and end up with a _________ and you have no remedy other than to sell your shares and take your loss.
http://www.stuff.co.nz/business/blogs/stirring-the-pot/2926392/Minority-buyouts-the-Wall-St-walk

brothel

Bad example, the shares would probably double, as there is money in vice. Under the ____________, however, it would be brought to shareholders but it would only require an ordinary resolution and thus minority buyout rights are not triggered by the listing rules either. The listing rules are constructed on an issuer (company) not an investor protective basis in the main.
If, however, the shares in the subsidiary were to be sold likely it would trigger a special resolution in the parent. This too can be mitigated by advisors advising the board on the fair value of assets to ensure that any such transaction doesn’t satisfy the definition of a major transaction. (Which is the sale of half the assets of the company or the acquisition of an asset that will more than doubly the asset base. Similar ratios are in place for transactions that increase debt.) If they can’t get around it then boards move to an asset sale within the subsidiary.
There has not been a Companies Act resolution on a major transaction for some considerable time, thus there has never been a trigger for minority buy out either.

http://www.stuff.co.nz/business/blogs/stirring-the-pot/2926392/Minority-buyouts-the-Wall-St-walk

listing rules

Bad example, the shares would probably double, as there is money in vice. Under the listing rules, however, it would be brought to __________ but it would only require an ordinary resolution and thus minority buyout rights are not triggered by the listing rules either. The listing rules are constructed on an issuer (company) not an investor protective basis in the main.
If, however, the shares in the subsidiary were to be sold likely it would trigger a special resolution in the parent. This too can be mitigated by advisors advising the board on the fair value of assets to ensure that any such transaction doesn’t satisfy the definition of a major transaction. (Which is the sale of half the assets of the company or the acquisition of an asset that will more than doubly the asset base. Similar ratios are in place for transactions that increase debt.) If they can’t get around it then boards move to an asset sale within the subsidiary.
There has not been a Companies Act resolution on a major transaction for some considerable time, thus there has never been a trigger for minority buy out either.

http://www.stuff.co.nz/business/blogs/stirring-the-pot/2926392/Minority-buyouts-the-Wall-St-walk

shareholders

Bad example, the shares would probably double, as there is money in vice. Under the listing rules, however, it would be brought to shareholders but it would only require an _______________ and thus minority buyout rights are not triggered by the listing rules either. The listing rules are constructed on an issuer (company) not an investor protective basis in the main.
If, however, the shares in the subsidiary were to be sold likely it would trigger a special resolution in the parent. This too can be mitigated by advisors advising the board on the fair value of assets to ensure that any such transaction doesn’t satisfy the definition of a major transaction. (Which is the sale of half the assets of the company or the acquisition of an asset that will more than doubly the asset base. Similar ratios are in place for transactions that increase debt.) If they can’t get around it then boards move to an asset sale within the subsidiary.
There has not been a Companies Act resolution on a major transaction for some considerable time, thus there has never been a trigger for minority buy out either.

http://www.stuff.co.nz/business/blogs/stirring-the-pot/2926392/Minority-buyouts-the-Wall-St-walk

ordinary resolution

Bad example, the shares would probably double, as there is money in vice. Under the listing rules, however, it would be brought to shareholders but it would only require an ordinary resolution and thus ___________________ by the listing rules either. The listing rules are constructed on an issuer (company) not an investor protective basis in the main.
If, however, the shares in the subsidiary were to be sold likely it would trigger a special resolution in the parent. This too can be mitigated by advisors advising the board on the fair value of assets to ensure that any such transaction doesn’t satisfy the definition of a major transaction. (Which is the sale of half the assets of the company or the acquisition of an asset that will more than doubly the asset base. Similar ratios are in place for transactions that increase debt.) If they can’t get around it then boards move to an asset sale within the subsidiary.
There has not been a Companies Act resolution on a major transaction for some considerable time, thus there has never been a trigger for minority buy out either.

http://www.stuff.co.nz/business/blogs/stirring-the-pot/2926392/Minority-buyouts-the-Wall-St-walk

minority buyout rights are not triggered

Bad example, the shares would probably double, as there is money in vice. Under the listing rules, however, it would be brought to shareholders but it would only require an ordinary resolution and thus minority buyout rights are not triggered by the listing rules either. The ____________ are constructed on an issuer (company) not an investor protective basis in the main.
If, however, the shares in the subsidiary were to be sold likely it would trigger a special resolution in the parent. This too can be mitigated by advisors advising the board on the fair value of assets to ensure that any such transaction doesn’t satisfy the definition of a major transaction. (Which is the sale of half the assets of the company or the acquisition of an asset that will more than doubly the asset base. Similar ratios are in place for transactions that increase debt.) If they can’t get around it then boards move to an asset sale within the subsidiary.
There has not been a Companies Act resolution on a major transaction for some considerable time, thus there has never been a trigger for minority buy out either.

http://www.stuff.co.nz/business/blogs/stirring-the-pot/2926392/Minority-buyouts-the-Wall-St-walk

listing rules

Bad example, the shares would probably double, as there is money in vice. Under the listing rules, however, it would be brought to shareholders but it would only require an ordinary resolution and thus minority buyout rights are not triggered by the listing rules either. The listing rules are constructed on ________________________ in the main.
If, however, the shares in the subsidiary were to be sold likely it would trigger a special resolution in the parent. This too can be mitigated by advisors advising the board on the fair value of assets to ensure that any such transaction doesn’t satisfy the definition of a major transaction. (Which is the sale of half the assets of the company or the acquisition of an asset that will more than doubly the asset base. Similar ratios are in place for transactions that increase debt.) If they can’t get around it then boards move to an asset sale within the subsidiary.
There has not been a Companies Act resolution on a major transaction for some considerable time, thus there has never been a trigger for minority buy out either.

http://www.stuff.co.nz/business/blogs/stirring-the-pot/2926392/Minority-buyouts-the-Wall-St-walk

an issuer (company) not an investor protective basis

Bad example, the shares would probably double, as there is money in vice. Under the listing rules, however, it would be brought to shareholders but it would only require an ordinary resolution and thus minority buyout rights are not triggered by the listing rules either. The listing rules are constructed on an issuer (company) not an investor protective basis in the main.
If, however, _______________ likely it would trigger a special resolution in the parent. This too can be mitigated by advisors advising the board on the fair value of assets to ensure that any such transaction doesn’t satisfy the definition of a major transaction. (Which is the sale of half the assets of the company or the acquisition of an asset that will more than doubly the asset base. Similar ratios are in place for transactions that increase debt.) If they can’t get around it then boards move to an asset sale within the subsidiary.
There has not been a Companies Act resolution on a major transaction for some considerable time, thus there has never been a trigger for minority buy out either.

http://www.stuff.co.nz/business/blogs/stirring-the-pot/2926392/Minority-buyouts-the-Wall-St-walk

shares in the subsidiary were to be sold

Bad example, the shares would probably double, as there is money in vice. Under the listing rules, however, it would be brought to shareholders but it would only require an ordinary resolution and thus minority buyout rights are not triggered by the listing rules either. The listing rules are constructed on an issuer (company) not an investor protective basis in the main.
If, however, the shares in the subsidiary were to be sold likely it would trigger a special resolution in the parent. This too can be mitigated by advisors advising the board on the fair value of assets to ensure that any such transaction ________________. (Which is the sale of half the assets of the company or the acquisition of an asset that will more than doubly the asset base. Similar ratios are in place for transactions that increase debt.) If they can’t get around it then boards move to an asset sale within the subsidiary.
There has not been a Companies Act resolution on a major transaction for some considerable time, thus there has never been a trigger for minority buy out either.

http://www.stuff.co.nz/business/blogs/stirring-the-pot/2926392/Minority-buyouts-the-Wall-St-walk

doesn’t satisfy the definition of a major transaction

Bad example, the shares would probably double, as there is money in vice. Under the listing rules, however, it would be brought to shareholders but it would only require an ordinary resolution and thus minority buyout rights are not triggered by the listing rules either. The listing rules are constructed on an issuer (company) not an investor protective basis in the main.
If, however, the shares in the subsidiary were to be sold likely it would trigger a special resolution in the parent. This too can be mitigated by advisors advising the board on the fair value of assets to ensure that any such transaction doesn’t satisfy the definition of a major transaction. (Which is the ______________________ or the acquisition of an asset that will more than doubly the asset base. Similar ratios are in place for transactions that increase debt.) If they can’t get around it then boards move to an asset sale within the subsidiary.
There has not been a Companies Act resolution on a major transaction for some considerable time, thus there has never been a trigger for minority buy out either.

http://www.stuff.co.nz/business/blogs/stirring-the-pot/2926392/Minority-buyouts-the-Wall-St-walk

sale of half the assets of the company

Bad example, the shares would probably double, as there is money in vice. Under the listing rules, however, it would be brought to shareholders but it would only require an ordinary resolution and thus minority buyout rights are not triggered by the listing rules either. The listing rules are constructed on an issuer (company) not an investor protective basis in the main.
If, however, the shares in the subsidiary were to be sold likely it would trigger a special resolution in the parent. This too can be mitigated by advisors advising the board on the fair value of assets to ensure that any such transaction doesn’t satisfy the definition of a major transaction. (Which is the sale of half the assets of the company or the _________________________. Similar ratios are in place for transactions that increase debt.) If they can’t get around it then boards move to an asset sale within the subsidiary.
There has not been a Companies Act resolution on a major transaction for some considerable time, thus there has never been a trigger for minority buy out either.

http://www.stuff.co.nz/business/blogs/stirring-the-pot/2926392/Minority-buyouts-the-Wall-St-walk

acquisition of an asset that will more than doubly the asset base

Bad example, the shares would probably double, as there is money in vice. Under the listing rules, however, it would be brought to shareholders but it would only require an ordinary resolution and thus minority buyout rights are not triggered by the listing rules either. The listing rules are constructed on an issuer (company) not an investor protective basis in the main.
If, however, the shares in the subsidiary were to be sold likely it would trigger a special resolution in the parent. This too can be mitigated by advisors advising the board on the fair value of assets to ensure that any such transaction doesn’t satisfy the definition of a major transaction. (Which is the sale of half the assets of the company or the acquisition of an asset that will more than doubly the asset base. Similar ratios are in place for transactions that ________________.) If they can’t get around it then boards move to an asset sale within the subsidiary.
There has not been a Companies Act resolution on a major transaction for some considerable time, thus there has never been a trigger for minority buy out either.

http://www.stuff.co.nz/business/blogs/stirring-the-pot/2926392/Minority-buyouts-the-Wall-St-walk

increase debt

Bad example, the shares would probably double, as there is money in vice. Under the listing rules, however, it would be brought to shareholders but it would only require an ordinary resolution and thus minority buyout rights are not triggered by the listing rules either. The listing rules are constructed on an issuer (company) not an investor protective basis in the main.
If, however, the shares in the subsidiary were to be sold likely it would trigger a special resolution in the parent. This too can be mitigated by advisors advising the board on the fair value of assets to ensure that any such transaction doesn’t satisfy the definition of a major transaction. (Which is the sale of half the assets of the company or the acquisition of an asset that will more than doubly the asset base. Similar ratios are in place for transactions that increase debt.) If they can’t get around it then boards move to an asset sale within the subsidiary.
There has not been a Companies Act resolution on a major transaction __________________, thus there has never been a trigger for minority buy out either.

http://www.stuff.co.nz/business/blogs/stirring-the-pot/2926392/Minority-buyouts-the-Wall-St-walk

for some considerable time

A company’s constitution sets out the ri_____, po_____ and du______ of the company, board, directors and shareholders.

rights, powers and duties

A company’s constitution sets out the __________ powers and duties of the company, board, directors and shareholders.

rights, powers and duties

A company’s constitution sets out the rights, _______________ of the company, board, directors and shareholders.

rights, powers and duties

A company’s constitution sets out the rights, ________ and duties of the company, board, directors and shareholders.

rights, powers and duties

a) A _____________________

211Contents of annual report

(1) Every annual report for a company must be in writing and be dated and, subject to subsection (3), must—
(a) describe, so far as the board believes is material for the shareholders to have an appreciation of the state of the company’s affairs and will not be harmful to the business of the company or of any of its subsidiaries, any change during the accounting period in— (i) the nature of the business of the company or any of its subsidiaries; or
(ii) the classes of business in which the company has an interest, whether as a shareholder of another company or otherwise

Description of the Companies Affairs

211 Contents of annual report

(1) Every annual report for a company must be in writing and be dated and, subject to subsection (3), must—
(a) describe, so far as the board believes is material for the shareholders to have an appreciation of the state of the company’s affairs and will not be harmful to the business of the company or of any of its subsidiaries, any change during the accounting period in— (i) __________________________; or
(ii) the classes of business in which the company has an interest, whether as a shareholder of another company or otherwise

the nature of the business of the company or any of its subsidiaries;

211 Contents of annual report

(1) Every annual report for a company must be in writing and be dated and, subject to subsection (3), must—
(a) describe, so far as the board believes is material for the shareholders to have an appreciation of the state of the company’s affairs and will not be harmful to the business of the company or of any of its subsidiaries, any change during the accounting period in— (i) the nature of the business of the company or any of its subsidiaries; or
(ii) the __________________________, whether as a shareholder of another company or otherwise

classes of business in which the company has an interest

211 Contents of Annual Report
b) _______________

c) include any ________________ or group _____________ for the accounting period that are required to be prepared under Part 11, Part 7 of the Financial Markets Conduct Act 2013, or any other enactment (if any);

Financial statements

financial statements

211 Contents of Annual Report
a) Financial statements

b) include any financial statements or group financial statements for the accounting period that are required to be prepared__________________, or any other enactment (if any);

Part 11, Part 7 of the Financial Markets Conduct Act 2013

211 Contents of Annual Report
a) Financial statements

b) include any financial statements or group financial statements for the accounting period that are required to be prepared under Part 11, Part 7 of the Financial Markets Conduct Act 2013, or ___________________;

any other enactment (if any);

Section 211
c) ____________
if an _____________ is required under Part 11, Part 7 of the Financial Markets Conduct Act 2013, or any other enactment in relation to the financial statements or group financial statements included in the report, include that ______________; and

Auditor’s Report

a) Auditors Report
if an auditor’s report is required under __________________, or any other enactment in relation to the financial statements or group financial statements included in the report, include that auditor’s report; and

Part 11, Part 7 of the Financial Markets Conduct Act 2013

a) Auditors Report
if an auditor’s report is required under Part 11, Part 7 of the Financial Markets Conduct Act 2013, _______________ in relation to the financial statements or group financial statements included in the report, include that auditor’s report; and

or any other enactment

Section 211
Company’s _____________
state particulars of entries in the ____________ made during the accounting period

interests register

Section 211
Company’s interest register
state particulars of entries in the interests register made during the _______________

accounting period

An ______________ discloses details of transactions or arrangements between the company and its directors.

interests register

Section 211 ___________________
state the number of employees or former employees of the company, not being directors of the company, who, during the accounting period, received remuneration and any other benefits in their capacity as employees, the value of which was or exceeded $100,000 per annum, and must state the number of such employees or former employees in brackets of $10,000; and

Employee Remuneration

Section 211 Employee Remuneration

state the number of _________________ of the company, not being directors of the company, who, during the accounting period, received remuneration and any other benefits in their capacity as employees, the value of which was or exceeded $100,000 per annum, and must state the number of such employees or former employees in brackets of $10,000; and

employees or former employees

Section 211 Employee Remuneration
state the number of employees or former employees of the company, not being directors of the company, who, ___________________, received remuneration and any other benefits in their capacity as employees, the value of which was or exceeded $100,000 per annum, and must state the number of such employees or former employees in brackets of $10,000; and

during the accounting period

Section 211 Employee Remuneration

state the number of employees or former employees of the company, not being directors of the company, who, during the accounting period, ___________________________________, the value of which was or exceeded $100,000 per annum, and must state the number of such employees or former employees in brackets of $10,000; and

received remuneration and any other benefits in their capacity as employees

Section 211 Employee Remuneration

state the number of employees or former employees of the company, not being directors of the company, who, during the accounting period, received remuneration and any other benefits in their capacity as employees, the value of which was or exceeded ________________, and must state the number of such employees or former employees in brackets of $10,000; and

$100,000 per annum

Section 211 Employee Remuneration

state the number of employees or former employees of the company, not being directors of the company, who, during the accounting period, received remuneration and any other benefits in their capacity as employees, the value of which was or exceeded $100,000 per annum, and must state the number of such employees or former employees in ______________; and

brackets of $10,000

Section 21 D__________

State the total amount of d_________ made by the company during the accounting period;

Donations

Section 21 Donations

State the total amount of donations made by the company during the _____________

Accounting period

Section 21 _______________
State the names of the persons holding office as directors of the company as at the end of the accounting period and the names of any persons who ceased to hold office as directors of the company during the accounting period; and

Names of the directors

Section 21 Names of the directors
State the names of the persons _______________________________ and the names of any persons who ceased to hold office as directors of the company during the accounting period; and

holding office as directors of the company as at the end of the accounting period

Section 21 Names of the directors
State the names of the persons holding office as directors of the company as at the end of the accounting period and the _______________________________________; and

ceased to hold office as directors of the company during the accounting period

Companies Act 1993 Section _____ Contents of Annual Report

211

What section of the Companies Act 1993 details what should be included in an annual report?

Section 211

What is contained in section 211 of the Companies Act 1993?

Required contents of the annual report.

Is the amount recorded as payments to the auditors, inclusive of fees paid to that person or firm?

Exclusive. Other fees payable are required to be recorded as a separate item.

Is the amount recorded as payments to the auditors, inclusive of fees paid to that person or firm?
Exclusive. Other fees payable are required to be recorded as a ______________.

Separate item

Section 211 Audit Fees
state the amounts payable by the company to ______________________ of the company as audit fees and, as a separate item, fees payable by the company for other services provided by that person or firm; and

the person or firm holding office as auditor

Section 211 Audit Fees

state the amounts payable by the company to the person or firm holding office as auditor ___________________ and, as a separate item, fees payable by the company for other services provided by that person or firm; and

of the company as audit fees

Section 211 Audit Fees

state the amounts payable by the company to the person or firm holding office as auditor of the company as audit fees and, _______________, fees payable by the company for other services provided by that person or firm; and

as a separate item

Section 211 Audit Fees

state the amounts payable by the company to the person or firm holding office as auditor of the company as audit fees and, as a separate item, ___________ for other services provided by that person or firm; and

fees payable by the company

Section 211 Audit Fees

state the amounts payable by the company to the person or firm holding office as auditor of the company as audit fees and, as a separate item, fees payable by the company _______________________; and

for other services provided by that person or firm

Section 211 _________________

be signed on behalf of the board by 2 directors of the company or, if the company has only 1 director, by that director.

Signed by directors

Section 211 Signed by directors

be signed on _________________ of the company or, if the company has only 1 director, by that director.

on behalf of the board by 2 directors

Section 211 Signed by directors

be signed on behalf of the board by 2 directors of the company or, _______________, by that director.

if the company has only 1 director

Section 211 Signed by directors

be signed on behalf of the board by 2 directors of the company or, if the company has only 1 director, _____________.

by that director

Non- Statutory Sections Purpose
______________________ Highlight’s positive aspects of the year and may indicate some challenges
Graphs and diagrams To make statements easier to understand
Trend Statements Indicate general direction of key details over a five or ten-year period
Photographs Promote certain aspects of the company
Special Articles Used to promote the company’s image

Chairperson’s Report

Non- Statutory Sections Purpose
Chairperson’s Report Highlight’s positive aspects of the year and _______________
Graphs and diagrams To make statements easier to understand
Trend Statements Indicate general direction of key details over a five or ten-year period
Photographs Promote certain aspects of the company
Special Articles Used to promote the company’s image

may indicate some challenges

Non- Statutory Sections Purpose
Chairperson’s Report _______________ and may indicate some challenges
Graphs and diagrams To make statements easier to understand
Trend Statements Indicate general direction of key details over a five or ten-year period
Photographs Promote certain aspects of the company
Special Articles Used to promote the company’s image

Highlight’s positive aspects of the year

Non- Statutory Sections Purpose
Chairperson’s Report Highlight’s positive aspects of the year and may indicate some challenges
_______________ To make statements easier to understand
Trend Statements Indicate general direction of key details over a five or ten-year period
Photographs Promote certain aspects of the company
Special Articles Used to promote the company’s image

Graphs and diagrams

Non- Statutory Sections Purpose
Chairperson’s Report Highlight’s positive aspects of the year and may indicate some challenges
Graphs and diagrams _________________________________
Trend Statements Indicate general direction of key details over a five or ten-year period
Photographs Promote certain aspects of the company
Special Articles Used to promote the company’s image

To make statements easier to understand

Non- Statutory Sections Purpose
Chairperson’s Report Highlight’s positive aspects of the year and may indicate some challenges
Graphs and diagrams To make statements easier to understand
________________________ Indicate general direction of key details over a five or ten-year period
Photographs Promote certain aspects of the company
Special Articles Used to promote the company’s image

Trend Statements

Non- Statutory Sections Purpose
Chairperson’s Report Highlight’s positive aspects of the year and may indicate some challenges
Graphs and diagrams To make statements easier to understand
Trend Statements ____________________ over a five or ten-year period
Photographs Promote certain aspects of the company
Special Articles Used to promote the company’s image

Indicate general direction of key details

Non- Statutory Sections Purpose
Chairperson’s Report Highlight’s positive aspects of the year and may indicate some challenges
Graphs and diagrams To make statements easier to understand
Trend Statements Indicate general direction of key details over a five or ten-year period
___________________ Promote certain aspects of the company
Special Articles Used to promote the company’s image

Photographs

Non- Statutory Sections Purpose
Chairperson’s Report Highlight’s positive aspects of the year and may indicate some challenges
Graphs and diagrams To make statements easier to understand
Trend Statements Indicate general direction of key details over a five or ten-year period
Photographs ____________________________
Special Articles Used to promote the company’s image

Promote certain aspects of the company

Non- Statutory Sections Purpose
Chairperson’s Report Highlight’s positive aspects of the year and may indicate some challenges
Graphs and diagrams To make statements easier to understand
Trend Statements Indicate general direction of key details over a five or ten-year period
Photographs Promote certain aspects of the company
Special Articles ____________________________________

Used to promote the company’s image

The Courts wi___ int_______ to stop out and out abuses of management power.

will intervene

The Courts will __________ to stop out and out abuses of management power.

will intervene

The Courts _____ intervene to stop out and out abuses of management power.

will intervene

The Courts w____ i______e to stop out and out abuses of management power.

will intervene

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Companies Act 1993 Flashcards

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