Company Agreement Template for New Zealand

A Company Agreement is a comprehensive legal document that establishes the governance framework and operational structure for your New Zealand company. This agreement defines the relationships between shareholders, outlines their rights and obligations, and sets clear procedures for company management and decision-making processes.

When do you need this document?

You need a Company Agreement when incorporating a new company with multiple shareholders, as it provides essential protection and clarity from the outset. This document becomes particularly important when bringing on new investors or partners, as it establishes their rights and the procedures for share transfers. If you're operating an existing company without formal shareholder agreements, implementing a Company Agreement helps prevent disputes and ensures compliance with corporate governance standards. The agreement is also crucial when planning business expansion, succession planning, or when shareholders want to formalize their working relationships and protect their investments.

Key legal considerations

Your Company Agreement must address several critical legal elements to ensure enforceability and comprehensive protection. Share capital provisions should clearly define the classes of shares, voting rights, and procedures for issuing new shares or transferring existing ones. The agreement must establish decision-making processes, including matters requiring ordinary versus special resolutions, and define the roles of directors and shareholders. Dispute resolution mechanisms are essential, typically including mediation and arbitration clauses to avoid costly litigation. Exit provisions should cover situations such as death, disability, or voluntary withdrawal of shareholders, including valuation methods and buy-sell procedures. The agreement should also address confidentiality obligations, non-compete clauses where appropriate, and procedures for amending the agreement itself.

Legal requirements in New Zealand

Under the Companies Act 1993, your Company Agreement must complement your company's constitution without contradicting it, as both documents govern your company's operations. The agreement must comply with the Contract and Commercial Law Act 2017 to ensure its enforceability, including proper execution by all parties. If your company involves share offerings or financial products, you must consider the Financial Markets Conduct Act 2013 requirements. The agreement should align with Financial Reporting Act 2013 obligations, particularly regarding information sharing and transparency requirements. All parties must have the legal capacity to enter the agreement, and proper witnessing procedures must be followed. The document should clearly reference New Zealand law as the governing jurisdiction and specify New Zealand courts for any legal proceedings. Additionally, ensure that any foreign shareholders understand their obligations under New Zealand's Overseas Investment Act if applicable to their shareholding level.