Minority shareholder feels squeezed out by the majority
- 01.07.2026
We plan to raise investment from about ten friends and family members in exchange for shares in our start-up. We assumed we could just do a handshake deal. Are there laws that regulate offering shares in New Zealand?
Yes, offers of shares are regulated by the Financial Markets Conduct Act 2013, which generally requires a product disclosure statement and a registered offer for public offers. However, there are exclusions that make small raises easier, including offers to people with a close business relationship or to family members, and an exclusion where offers are made to no more than 20 investors and the amount raised in a 12 month period is limited. Even where disclosure is not required, you must not mislead investors, because fair dealing rules and the Fair Trading Act still apply. Use a written subscription agreement, update your share register and file the required notices with the Companies Office. Alternatively, consider a licensed crowdfunding platform for broader raises.
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