Board Resolution For Call On Shares Template for New Zealand

A Board Resolution For Call On Shares is a formal corporate document that authorises your company's board of directors to require shareholders to pay outstanding amounts on their partly paid shares. Under New Zealand's Companies Act 1993, this resolution provides the legal mechanism for companies to access unpaid share capital when additional funding is needed for business operations, expansion, or specific projects.

When do you need this document?

You'll need this resolution when your company has issued partly paid shares and requires shareholders to pay the remaining balance. This commonly occurs when companies need working capital for expansion, must meet unexpected financial obligations, or want to strengthen their balance sheet. The resolution is also necessary when your company's constitution requires certain financial thresholds to be met, or when lenders demand additional equity contributions as loan conditions. Construction companies often use calls on shares to fund project costs, while technology startups may implement calls to finance product development or market expansion.

Key legal considerations

Your resolution must comply with both the Companies Act 1993 and your company's constitution, which may contain specific provisions governing calls on shares. The document must clearly specify the amount being called, payment due dates, acceptable payment methods, and consequences for non-payment. You must ensure adequate notice periods are provided to shareholders, typically at least 14 days unless your constitution specifies otherwise. The resolution should include provisions for interest charges on late payments and potential forfeiture procedures for non-compliant shareholders. Consider the impact on shareholder relationships and ensure the call is commercially justified, as unsuccessful calls can damage company credibility and shareholder confidence.

Legal requirements in New Zealand

Under the Companies Act 1993, particularly sections 45 and 52, your board has the authority to make calls on shares provided this power exists in your constitution. You must maintain proper records of the resolution and ensure it's signed by directors present at the meeting where the decision was made. The Financial Markets Conduct Act 2013 may apply if your company is publicly listed, requiring additional disclosure obligations to shareholders and the market. Your resolution must specify whether calls apply to all partly paid shares or specific classes, and ensure equal treatment of shareholders within the same class. The document should reference relevant constitutional provisions and confirm that proper notice will be given to affected shareholders. Consider tax implications under the Tax Administration Act 1994, as calls on shares may have different treatment compared to new share issues.