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A company constitution is an essential document for your company to have. However, as times change, you may wish to alter elements of your constitution. There are several essential steps that you must take to ensure that you formally change your company constitution. This article will outline:

  • what a company constitution is;
  • whether having a constitution is a legal requirement;
  • how to create a company constitution; and
  • the steps for amending your company’s constitution, both internally and with the Companies Office. 

What is a Company Constitution?

A company constitution sets out the rights, responsibilities and duties of all of the members of your company. It establishes the roles of the board, directors and shareholders, and sets out the governance of your company. A few matters you would usually include in a company constitution are:

Therefore, company constitutions are beneficial because they contain all the rules governing the company and the individuals involved in a straightforward document. These are specific to your company and the way that you wish to run it. 

The Companies Act 1993 governs New Zealand companies that do not have a constitution. Thus, this Act will set out obligations for the company, board, directors and shareholders. However, it can be unsuitable and inaccessible for companies if they are not familiar with it. Therefore, having a self-written company constitution ensures that the document contains any specialised provisions that your company needs.

How Do I Create a Company Constitution?

While it may sound complicated, it is easier than you may think to create a company constitution. They are readily available online, either for free or from a third-party provider. You can take a template and then add or change parts to better suit your company structure. Additionally, with some legal advice, you can write your own constitution.

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Do I Legally Need to Have a Company Constitution?

A company constitution is not a legal requirement, but most private companies adopt company constitutions, given their usefulness and the generality of the Companies Act. You are also able to incorporate a company without a constitution, and easily add a constitution afterwards.

How Can I Amend My Company’s Constitution?

Your company constitution will outline what procedure needs to be followed in order to alter the constitution. Commonly, this is at an annual general meeting (AGM) or an extraordinary general meeting (EGM) of the company’s shareholders. First, a formal vote will need to be held on the proposed change, and a certain percentage of favourable votes – typically 75% of the shareholders – will have to be achieved before the change is passed. Then, a formal special resolution can be passed to amend the original constitution.

Additionally, if you wish to change your company constitution formally, you must notify the Companies Office within ten working days of passing a resolution to adopt, amend, or revoke your company constitution. The Companies Office is the government agency that administers business registers in New Zealand. 

To notify the Companies Office, you must:

  • provide the date of the passed resolution;
  • provide a copy of the updated constitution; and 
  • remove your old constitution on the Companies Office website. 

While this may seem complicated, it is quite a simple process to update your company’s constitution on the Companies Office website. When you register your company with the Companies Office website, you will have created an online profile connected to a RealMe account for your company. This profile is where you file your annual company returns and updates. Furthermore, this provides you control over all of the details and documents held by the Companies Office for your company. Therefore, by logging into your Companies Office online services account, you can change your company constitution to the newly amended one. 

If you were not the person who set up your Companies Office profile, you would need the login details and confirmed authority to act for the company to update your profile. 

Key Takeaways

A company constitution is an essential document for your company to have. It will outline essential aspects of your business, especially relating to the rights and responsibilities of directors and shareholders. 

If you need help understanding your company’s constitution, our experienced corporate lawyers can assist as part of our LegalVision membership. You will have unlimited access to lawyers to answer your questions and draft and review your documents for a low monthly fee. Call us today on 0800 005 570 or visit our membership page.

Frequently Asked Questions

Do I need to have a company constitution before I incorporate a company?

No, you can incorporate your company without creating a constitution. However, it means that your company will be governed by the Companies Act 1993, which may not suit all aspects of your business. 

Do I need a lawyer to write my company constitution?

It is a good idea to seek legal advice if you are writing a company constitution from scratch. However, there are also templates online of company constitutions that you are able to edit to better suit your needs. 

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