How companies amalgamate
Choose a type of amalgamation for your circumstances
Amalgamation is the merging of assets and liabilities of 2 or more companies that become 1 amalgamated company. As part of the process, we remove companies that aren't continuing from the Companies Register.
Choosing a form of amalgamation
There are 2 ways to manage company amalgamations. Which one you choose depends on the relationship of the amalgamating companies.
- A long-form amalgamation happens between companies that are not generally related to each other. This form of amalgamation normally involves agreeing on compensation for shareholders in the companies that will be removed from the register.
- A short-form amalgamation happens within a group of companies.
Part 13 the Companies Act 1993 describes how to manage amalgamations. The information we provide is very general. Seek legal or financial advice if you have any doubts about what to do.
When companies are unrelated they need to amalgamate using a long-form process. The boards of the companies need to:
- prepare a proposal outlining how they plan to manage the amalgamation
- notify and get the approval of their shareholders to the proposed amalgamation
- give public notice of their intention to amalgamate
- notify secured creditors of their intentions.
Sometimes related companies also need to use the long-form process to restructure their shareholdings — the short form process is unsuitable for this situation.
The details of long-form amalgamations are described in Sections 220 and 221 of the Act.
Before applying to amalgamate, each company must complete the related resolutions and certificates.
Companies that can't use the long-form amalgamation process
Rather than using the long-form amalgamation, the High Court can order an amalgamation:
- in more complicated situations, or
- when an amalgamation involves the New Zealand business of a company registered on the Overseas Register.
A code company can't use the long-form procedure. You can find the definition of a code company in Sections 2(1) and 2A of the Takeovers Act 1993.
You must notify the Takeovers Panel under Section 236A of the Companies Act 1993 if an order of the High Court under Part 15 of the Companies Act will affect the voting rights of a code company.
In short-form amalgamations, the companies:
- are within the same group of companies or have common ownership
- don't compensate shareholders of the company or companies that will be removed from the register because the assets and liabilities of the amalgamating companies remain in the same ultimate ownership
- don't give notice to shareholders or publish a public notice of their intention to amalgamate.
The directors of the amalgamating companies complete all the documentation. They need to give notice to secured creditors.
There are 2 types of short-form amalgamations described in the Act.
Before applying to amalgamate, each company must prepare various documents, including the directors' consents, which is the only statutory form in this type of amalgamation.
Starting the amalgamation process
There are many issues to consider before you file your application to amalgamate with us.