Long form amalgamations

Under the Companies Act 1993 the following documents must be filed. 

1. Proposal that sets out the information required by the Act and is not dated or signed (section 220) but is to be approved by resolution of the board of each amalgamating company;
2. Certificate from the directors of each amalgamating company that:
   • the amalgamation will be in the best interests of the particular company and
   • that the amalgamated company will satisfy the solvency test immediately after the amalgamation has become effective, plus the grounds for both (section 221(2));
3. Certificate from the board of each amalgamating company that:
   • the amalgamation has been approved in accordance with the Act, and
   • if the particular company has a constitution, the amalgamation has also been approved in accordance with that constitution (section 223(c));
4. Certificate from the board of the intended amalgamated company (section 223(e)) only if applicable | that is, where both of two amalgamating companies or at least two in a multi-company amalgamation have creditors ;
5. Consents using Form 13 [55 kB PDF] from the directors of the intended amalgamated company (section 223(f)), irrespective of whether they will be the same people as before; and
6. Fee of NZ$306.67.

Can a new company be incorporated as the amalgamated company?

Yes, but only in this long form context.  This does happen on rare occasions and, where it happens, the proposal will provide for this.  The amalgamation documents are otherwise no different, but the presenter will also need to:

1. Reserve a company name, either:
   • Online (NZ$10.22), or 
   • Using a paper form (NZ$25.55).  You must apply using a paper form if the desired name is that of one of the companies due for removal on amalgamation.
     • Learn how to make a name application online or
     • Download form 4 to apply to reserve a company name [55 kB PDF]
        
2. Complete and file:
   • The name approval (if you have already applied online) or the application to reserve a name form (Form 4)
   • Form 1 application to incorporate a new company.  This application must list the names of the directors and shareholders, along with the company addresses
   • Form 13 Directors consent (1 per director) 
     • Download form 1 [116 kB PDF]
     • Download form 4 [55 kB PDF]
     • Download form 13 [55 kB PDF]

In such a case, amalgamation fee (NZ$306.67) covers the incorporation fee.   A constitution can also be lodged, identified by the applicant to Form 1 as being the constitution for the amalgamated company (section 12(1)(f)).

Points to note:

• Cross-shareholdings must be cancelled on amalgamation (section 220(3));  
• Establish what the final shareholding will be - long form amalgamations involve compensation to shareholders of those amalgamating company or companies to be removed on amalgamation.  This can take various forms – money etc – but often translates into shares in the amalgamated company on some formula or in actual numbers, as stated in the proposal.  
• If shares are to be issued according to a formula in the proposal, where possible a schedule should be provided setting out the final position, listing the:
  • shareholders
  • their full names
  • their residential or registered office addresses and
  • their intended holdings.

The Registrar can then enter these changes on registration.  

• If the shareholding cannot be ascertained ahead of registration, the board of the intended amalgamated company will need to give notice of the resulting share issue at a later date under section 41(b) Companies Act 1993.  
• A date when the amalgamation is intended to become effective can be stipulated in the proposal (section 220(2), and also see further information under short form amalgamations).  
• The directors’ resolutions (section 221(1)) to approve the proposal and the shareholders’ special resolutions (section 221(5)) approving the proposal are internal documents for the companies’ own records.  The directors’ resolutions are filed in the short form context when they are equivalent to the proposal, but are not required in the long form context.  
• There are obligations under section 221(3) and (4) to give:
  • 20 clear working days' notice to the shareholders of each amalgamating company, and to secured creditors, and 
  • 20 clear working days' public notice (New Zealand Gazette and local newspaper – section 2(5)).  
    
    Copies of these notices are not filed with the Registrar.

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