Law Of Business Entity

Law Of Business Entity

Law Of Business Entity



Law Of Business Entities



That it is in the best interest of the company to issue 2000 shares to two new shareholders, joining the company. The decision was made during a general meeting held at the end of the year, where the existing shareholders identified the need to have architects in the company. This resolution was made to allow the company to be more competitive on price hence allow growth.

Subject to company law section 42, the board of a company may issue shares at any time, to any person, and in any number, it thinks fit. Therefore, the shareholders found it fit to issue more shares to new shareholders, to make them part of the company.

The terms of the issue of shares are set out on agreement of all the shareholders. The issue occurred when the architects were not able to integrate their business with the company. The terms included:

That the new shares issued is a form of funding through debt to allow integration of architects business into the company. The funding would allow integration of the architects’ business into the company.

Since the new member could only join the company through shareholding or being employees, 1000 shares were issued to each one of them. This ownership of shares allowed joining the company as part of the shareholders and not employees.

That the company will receive cash in exchange for the shares issued to the new shareholders since it was issued as a debt funding to joining the company. The received cash will be used in funding:

The purchase of necessary architectural equipment required by the company, to allow operations of designing and construction of buildings.

The purchase of computer design programs, that will enhance sketching and development of graphics for buildings, by the architects.

That the issued shares will have an issue price of $2.50 per share, and be ranked equally with the existing shares of the company. The increase in price is a reflection of the increased value of the company after one year of operation. During the start of the company, the issue price was $1.00, which increased to $2.50 during the new issue.

Therefore, the finances from the shares will be used to support the company’s activities, including the purchase of types of equipment and instruments for work. Shareholders’ value will be created based on the number of shares one owns.

The issue of the 2000 shares will indicate an increase in the value of shareholdings of the company to 5,500 shares. The number of shareholders will also increase by two to six.

After taking account of all relevant factors, in the opinion of the directors, the consideration for, and the terms of issue of the shares, the issuing is fair and reasonable to the company and to all other existing shareholders.

The shareholders of the company have no right to subscribe for or be issued any other shares unless the directors of the company find an exception to the financial market conducts act 2013, which applies to the company in relation to the issue of shares.

The company, in accordance with the issue of shares to existing shareholders and new investors in the number and the price per share, and the terms and conditions set out below:

Shareholders Price Per Share No of shares The total consideration

Sam Sellers $ 1.00 1000 $ 1000

Sue Sellers $ 1.00 500 $ 500

Jim Jackson $ 1.00 1000 $ 1000

Jill Jackson $ 1.00 1000 $ 1000

Michael Mint $ 2.50 1000 $ 2500

Peter Parsley $ 2.50 1000 $ 2500

Signed By Directors:

Sam Sellers

Jim Jackson

Michael Mint



The company wishes to issue shares on the basis set out below to Bespoke Design and Build Limited.

The company will issue 2000 shares in the company at a price of $2.50, and the new shares will have the same rights as other ordinary shareholders.

The undersigned director of the company certifies that:

This certificate sets out the terms of the issue of the shares issued, including the reason for the new issue, price, payment made, and the number of shares issued.

The reasonable present cash value of the consideration for the issue of the Shares is $9500. The basis for assessment of the fair current cash value is cash flow.

After taking account of all relevant factors, in the opinion of the directors, the consideration for, and the terms of issue of the Shares are fair and reasonable to the company and to all existing shareholders.

Signed by all the shareholders who supported the issue of the shares.

Sam Sellers

Jim Jackson

Michael Mint

Sue Sellers

Jil Jackson

Peter Parsley



Noted that:

Any person who is not disqualified, under the Companies Act 1993, may be appointed as a director of the company by an ordinary resolution of shareholders.

The shareholders of the company wish to appoint Michael Mint, as a director of the company, from the date of signing of this resolution.

Michael Mint has consented to act as a director of the company after joining the company through shareholding.

Resolved that:

The shareholders appoint Michael Mint as director of Bespoke Design and Build company Ltd with effect from the date of this resolution. Michael will commence the position starting from the time of writing this resolution.

Company and the acceptance of the letter of offer by Bespoke Design and Build Company Limited acts as binding on company and approval to enter into transactions and decisions of directors of the company.

Signed for on behalf of shareholders:


Sam SellersSellersJim JacksonJacksonMichael MintMintSue SellersSue

Jil JacksonJill

Peter ParsleyParsleyReference

Companies Act 1993. (2010). Retrieved 4 May 2020, from

Intl Business Pubns USA. (2008). New Zealand Company Laws and Regulations Handbook.

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