Do we need a shareholders' agreement?

General information from Lawmateanz

A shareholders' agreement isn't legally required in New Zealand, but it's strongly recommended when a company has more than one owner.

Without one, the company's constitution (if it has one) and the Companies Act 1993 govern how decisions are made and what happens if shareholders disagree. These default rules often don't fit small businesses well.

A shareholders' agreement can cover who makes which decisions, how shares are valued and sold, what happens if someone wants to leave, dies or becomes unwell, how disputes are resolved, and whether shareholders can compete with the business.

It's much easier to agree these things at the start than in the middle of a dispute. A commercial lawyer can draft one to suit your business.

Written by Lawmateanz, not by a lawyer. General information only, not legal advice about your situation. For advice about your own matter, talk to a lawyer.

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