Shareholder agreements for closely held companies sometimes include put and call options in favour of each of the shareholders. These enable a majority shareholder to buy out a minority shareholder (at a price established by the terms of that option) – and provide the minority shareholder with a means to exit the company.
Issue 54 - February 2026
The articles below address these topics and I trust you find them insightful and helpful.
Overseas Persons Establishing a Business in NZ
There are four primary alternatives in choosing a business structure for overseas persons wishing to carry on business here
Issue 53 - September 2025
The need for a shareholders agreement in this context is often illustrated by the fraught position that accompanies a deadlock between shareholders where no shareholder agreement has been put in place and hence, no dispute resolution mechanisms are prescribed.
Issue 52 - May 2025
President Trump’s trade wars have headlined the news in recent times whilst the geo-political climate remains unsettled and is increasingly unsettling. At home, the reduction in interest rates has helped and activity levels appear to have risen.
Issue 51 - February 2025
Investment is a driving force behind economic growth, but in today’s market, securing funding has become more challenging than ever. Banks have tightened their lending criteria, making traditional loans increasingly unattainable. In response, alternative funding sources—such as angel investment and private lending—are stepping in to fill the gap. But with this shift comes a critical question: how well is this sector regulated?
Issue 50 - November 2024
Market research, evidently, reveals that deal values fell 63% in 2023 in comparison to the preceding 5 years. This represents a reduction in activity in the mergers and acquisitions space broadly, to one third of what it was. Quite extraordinary really. It is reflective of business uncertainty spawned by a tepid geopolitical climate and lingering effects of the COVID caused downward spiral in business performance.
Issue 49 - September 2024
The Trump/Harris showdown last week was pure theatre and no doubt is a prelude for much more debate to follow. It seems to me that Kamala Harris brings a dynamic to the election that was previously missing (youth!); some fascinating watching to come in this space.
Choosing the Right Entity for Investments
Extension of the 39% tax rate to trusts prompts the question, what is the optimal choice of entity for your investments? It also brings very much into the spotlight the benefit of the 28% rate enjoyed by PIEs and tax exemption granted to PIEs for gains on NZ shares and shares listed on the ASX.
Issue 48 - June 2024
Topical events over the last month have been plentiful; the Budget of course has headlined, and so has the state of the economy, the impact of high interest rates on it and the collapse of iconic Smith & Caughey.
Issue 47 - MAY 2024
The trustee tax rate now matches the top 39% personal tax rate. In some cases, this may prompt a decision to wind up the trust, perhaps because the advantage offered by the trust no longer outweighs the increased tax costs and pronounced reporting and compliance steps.
Issue 46 - November 2023
It feels like the end of the year has been overtaken by two fabulous world cups and an election. Some lovely weather has been a Godsend too.
Nonetheless there continues to be plenty of activity, most of it positive – not so if you are exposed to prevailing high interest rates, or having to compete in the supermarket business! As usual, what follows is a snapshot of items that have crossed my desk in the last 2 or 3 months (hence topical). I hope you find them of interest.
Issue 45 - August 2023
Aren’t political wavering fascinating. First, David Parker commissions the high net wealth information gathering request as a platform to support a capital gains tax. Then the Greens Party press for this to be extended to a wealth tax. Chris Hipkins evinces his concern at voter reaction by dismissing both a capital gains tax and a wealth tax. Grant Robertson and James Shaw are left fuming and David Parker asks to be removed as Minister of Revenue. Fascinating.
Issue 44 - March 2023
The recent collapse of Silicon Valley Bank, the 18th largest bank in America, has provided another dent in financial markets, the Bond Market already in freefall as interest rates continue to climb. The Bank’s collapse rather highlights the need for a government guarantee on bank deposits and perhaps that will be one positive to emerge…
Issue 43 - November 2022
Yesterday, the Reserve Bank increased the official cash rate (OCR) by 75 points in what was a record individual rate hike. This pushes the OCR up to 4.25% and is a response to continued high inflation (7.3% in Q2 and 7.2% in Q3)…
Issue 42 - August 2022
I recently attended a presentation given by a leading economist with one of the trading banks. It was a fascinating presentation, hence I thought I might share the thrust of it with you…
Trusts – Guidelines To What You Should and Should Not Do In Designing and Using a Trust
This paper sets out dos and don’ts for New Zealand domestic trusts, particularly family trusts that own the family home and/or the family operated business…
Issue 41 - May 2022
Challenges against decisions of trustees arise in a wide number of areas. I discuss here two alternative bases for challenging a trustee’s decision, namely argument that the decision is ill considered and not in the best interest of the trust and secondly, based on a trustee’s conflict of interest…
Issue 40 - February 2022
Most topical at the moment, it seems, is the effect that the new lending rules in the Credit Contracts and Consumer Finance Act (CCCFA) is having on the housing market…
Issue 39 - November 2021
It is tempting to offer observations on the Auckland centric lockdown. I refrain from doing so in preference for discussing some important events in the corporate, tax and trust areas…
Design of the Interest Limitation Rule
Since my last newsletter, Inland Revenue has helpfully issued a set of questions and answers that are designed to assist understanding of the interest limitation rule for residential investment properties…