Board Resolution For Issue Of Shares Template for New Zealand
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What is a Board Resolution For Issue Of Shares?
The Board Resolution For Issue of Shares is a critical corporate governance document used when a New Zealand company decides to issue new shares. It is required under the Companies Act 1993 to formally document the board's decision-making process and authorization for share issuance. The resolution is typically used during capital raising, employee share schemes, strategic investments, or corporate restructuring. It must demonstrate compliance with both statutory requirements and the company's constitution, including consideration of pre-emptive rights and fair and reasonable assessment to the company and its shareholders. The document serves as evidence of proper corporate governance and can be required by various stakeholders including regulators, auditors, and potential investors. It forms part of the company's official records and may need to be filed with the Companies Office or presented to other regulatory bodies.
About the Board Resolution For Issue Of Shares
When your New Zealand company needs to issue new shares, you must obtain formal board authorization through a Board Resolution For Issue Of Shares. This document is not just a formality—it's a legal requirement under the Companies Act 1993 that demonstrates proper corporate governance and protects both the company and its shareholders. The resolution formally records your board's decision-making process and ensures compliance with New Zealand company law requirements.
When do you need this document?
You'll need this resolution whenever your company plans to issue new shares for any purpose. This includes raising capital to fund business expansion or new projects, implementing employee share schemes or stock option programs, bringing in strategic investors or partners, conducting corporate restructuring activities, or converting debt to equity arrangements. The resolution is also required when issuing shares as consideration for acquisitions or when existing shareholders want to increase their shareholding. Without this formal board authorization, any share issue would be invalid under New Zealand law.
Key legal considerations
Your resolution must address several critical legal requirements to be valid and enforceable. First, you must consider and document any pre-emptive rights that existing shareholders may have under your company's constitution or shareholders' agreement. The board must also conduct a fair and reasonable assessment of whether the share issue benefits the company and its shareholders overall. You need to specify the exact number of shares being issued, their class and type, the issue price or method for determining price, and the payment terms. If directors have any personal interest in the share issue, this must be disclosed and properly managed according to the conflicts of interest provisions in the Companies Act. The resolution should also confirm that the issue complies with any restrictions in your company's constitution and that proper authority exists under your board delegation framework.
Legal requirements in New Zealand
Under the Companies Act 1993, your board must have explicit power to issue shares, which is typically granted through the company's constitution or by special resolution of shareholders. The resolution must demonstrate that directors have considered their duties under sections 131-138 of the Act, particularly the duty to act in good faith and in the best interests of the company. If your share issue constitutes a regulated offer under the Financial Markets Conduct Act 2013, additional disclosure and compliance requirements may apply. For overseas investors, you must consider whether the Overseas Investment Act 2005 requires consent from the Overseas Investment Office. The resolution should be recorded in your company's minute book and may need to be filed with the Companies Office depending on your company's constitution and the nature of the share issue.
GOVERNING LAW
Applicable law
This Board Resolution For Issue Of Shares is drafted to comply with New Zealand law. Key legislation includes:
Financial Markets Conduct Act 2013: Regulates financial product offerings, including share issues, particularly if the shares are offered to the public or constitute a regulated offer
Overseas Investment Act 2005: Relevant if shares are being issued to overseas investors, as certain thresholds may trigger the need for Overseas Investment Office consent
Income Tax Act 2007: Contains provisions relating to the tax treatment of share issues, including potential implications for available subscribed capital
Financial Markets Authority Act 2011: Establishes the regulatory framework and the Financial Markets Authority's powers in overseeing share issuances and other corporate activities
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