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    Introduction To Company Law Slides

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    A company is a legal entity registered under the Companies Act 1993. The purposes of New Zealand company law are to facilitate economic and social benefits through capital aggregation, risk spreading, and business venturing while defining relationships within companies and encouraging responsible management. Fundamental components of modern companies include separate legal identity, capital contributions, transferable shares, shareholder powers and limited liability, a board of directors, and a constitution. Companies are also classified based on size, purpose, ownership structure, public offerings, stock exchange listings, and whether they are standalone or part of corporate groups. Sources of company law include legislation, common law, and non-binding standards while companies differ from sole traders, partnerships, and other business forms.

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    Introduction To Company Law Slides

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    shanhaolihai
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    A company is a legal entity registered under the Companies Act 1993. The purposes of New Zealand company law are to facilitate economic and social benefits through capital aggregation, risk spreading, and business venturing while defining relationships within companies and encouraging responsible management. Fundamental components of modern companies include separate legal identity, capital contributions, transferable shares, shareholder powers and limited liability, a board of directors, and a constitution. Companies are also classified based on size, purpose, ownership structure, public offerings, stock exchange listings, and whether they are standalone or part of corporate groups. Sources of company law include legislation, common law, and non-binding standards while companies differ from sole traders, partnerships, and other business forms.

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    Company laws

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    Introduction to Company Law slides

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    A company is a legal entity registered under the Companies Act 1993. The purposes of New Zealand company law are to facilitate economic and social benefits through capital aggregation, risk spreading, and business venturing while defining relationships within companies and encouraging responsible management. Fundamental components of modern companies include separate legal identity, capital contributions, transferable shares, shareholder powers and limited liability, a board of directors, and a constitution. Companies are also classified based on size, purpose, ownership structure, public offerings, stock exchange listings, and whether they are standalone or part of corporate groups. Sources of company law include legislation, common law, and non-binding standards while companies differ from sole traders, partnerships, and other business forms.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    82 views5 pages

    Introduction To Company Law Slides

    Uploaded by

    shanhaolihai
    A company is a legal entity registered under the Companies Act 1993. The purposes of New Zealand company law are to facilitate economic and social benefits through capital aggregation, risk spreading, and business venturing while defining relationships within companies and encouraging responsible management. Fundamental components of modern companies include separate legal identity, capital contributions, transferable shares, shareholder powers and limited liability, a board of directors, and a constitution. Companies are also classified based on size, purpose, ownership structure, public offerings, stock exchange listings, and whether they are standalone or part of corporate groups. Sources of company law include legislation, common law, and non-binding standards while companies differ from sole traders, partnerships, and other business forms.

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    Download as docx, pdf, or txt
    of 5

    Introduction to Company Law

    A. WHAT IS A COMPANY?

    It is a company registered (created) under Part II of the


    Companies Act 1993 (CA): CA, s 2.

    B PURPOSES OF NZ COMPANY LAW

    CA, Long Title


    An Act to reform the law relating to companies, and, in particular,—
    (a) to reaffirm the value of the company as a means of achieving
    economic and social benefits through the aggregation of capital
    for productive purposes, the spreading of economic risk, and the
    taking of business risks; and
    (b) to provide basic and adaptable requirements for the incorporation,
    organisation, and operation of companies; and
    (c) to define the relationships between companies and their directors,
    shareholders, and creditors; and
    (d) to encourage efficient and responsible management of companies
    by allowing directors a wide discretion in matters of business
    judgment while at the same time providing protection for
    shareholders and creditors against the abuse of management
    power; and
    (e) to provide straightforward and fair procedures for realising and
    distributing the assets of insolvent companies.

    1
    C FUNDAMENTAL COMPONENTS OF MODERN
    COMPANIES

    1. Separate legal entity and legal personality

    A company, once registered, is a legal entity in its own right:


    CA, s 15.

    2. A capital fund

    Share capital – contributed by shareholders


    Debt capital – contributed by creditors

    3. Shares

    Shareholders are the individuals who may have contributed


    some or all of a company’s capital (share capital) in return
    for specified rights (share(s)). Shares may be transferred (as a
    general rule). Companies may issue further shares (again as a
    general rule).

    4. A body of shareholders

    The collective group of shareholders who, by statute, are


    given the power to make specified decisions.

    Shareholders’ decisions are made by majority vote.

    2
    5. Limited liability of shareholders

    The liability of shareholders to the company and third parties


    is limited (as a default rule). This also means that the
    company’s capital fund is not available to meet shareholders’
    personal debts.

    6. A board of directors

    Directors are individuals appointed by a simple majority of


    shareholders in general meeting and as a collective group
    (board of directors) have a statutory power to manage the
    company’s business and affairs.

    Board decisions are made by majority vote

    7. Constitution

    A document that supplements the rules set out in the CA. The
    CA (as modified by a company’s constitution) sets out the
    rights, powers, duties and obligations of the company,
    individual shareholders, the body of shareholders, individual
    directors and the board of directors.

    3
    D CLASSIFICATIONS OF COMPANIES

    1. Closely and widely held companies

    2. Small to medium enterprises (SMEs):


     Small enterprises have 20 or fewer employees
     97% of all NZ businesses are small enterprises

    3. For profit, not for profit, social enterprise companies

    4. Co-operative companies

    5. Iwi companies

    6. Issuer companies

    A company that offers equity securities (or shares) to the


    public. Such offers are regulated under the Financial Markets
    Conduct Act 2013. The Financial Markets Authority
    administers the FMCA.

    7. Listed companies

    An issuer of equity securities that is also a party to listing


    agreement with NZX, as a result of which members of public
    can buy and sell the issuer’s shares on the markets operated
    by NZX.

    8. Groups of companies

    Parent/holding companies
    Subsidiary companies

    4
    E. SOURCES OF LAW

     Companies Act 1993


     Common law
     Related Legislation: Takeovers Act 1993, Financial
    Markets Conduct Act 2013, High Court Rules.
     Extra-legal (soft) sources: NZX Listing Rules, NZX
    Corporate Governance Code, FMA Corporate
    Governance in New Zealand: Principles and Guidelines.

    F. COMPANIES CONTRASTED WITH OTHER FORMS


    OF BUSINESS STRUCTURE

    Sole Trader
    Partnership
    Limited Partnership
    Incorporated Society
    Trading Trust
    Charitable Trust
    State Owned Enterprise

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