How To Change A Company Constitution In NZ

If your company’s grown (new shareholders, new products, new risk, new funding), your original setup documents might not fit the way you operate anymore.

That’s where updating your company constitution can help. A constitution isn’t something you look at every day, but it can quietly control major business decisions - like how shares are issued, how directors make decisions, and what approvals you need before taking big steps.

In this guide, we’ll walk you through what a company constitution does in New Zealand, when it makes sense to change it, and the practical steps for making changes properly under the Companies Act 1993.

(And don’t stress - once you know the process, it’s usually very manageable. The key is getting the details right so you don’t create confusion or disputes down the track.)

What Is A Company Constitution (And Why Does It Matter)?

A company constitution is a set of rules that can govern your company’s internal management. In New Zealand, a company can operate:

• Without a constitution (relying mainly on the default rules in the Companies Act 1993), or
• With a constitution (which can modify or replace some default rules, as long as it’s allowed by law).

Practically, your constitution can cover things like:

• how directors are appointed and removed
• how shareholder decisions are made (meetings, voting thresholds, written resolutions)
• rules around share issues, share transfers, and share classes
• dividend policies and distributions
• director decision-making and delegation
• indemnities and insurance for directors (within legal limits)

If you already have one, it’s worth treating your Company Constitution as part of your “legal foundations” - not just an admin document. When it’s well drafted, it helps you run the business smoothly and reduces friction when something changes (a new investor comes in, a co-founder exits, or you want to raise capital).

If your company doesn’t have a constitution yet, that’s also common - and you can still Adopt A Constitution later when you’re ready.

When Should You Consider Changing A Company Constitution?

Most business owners don’t wake up thinking, “Today’s the day to change our constitution.” Usually, it comes up because something else is happening in the business.

Here are some common situations where changing your constitution can be a smart move.

You’re Bringing In Investors Or New Shareholders

If you’re issuing shares, creating new share classes, or promising certain rights to investors, your constitution may need to reflect those rights (or at least not contradict them). For example, you might need clearer rules on:

• pre-emptive rights (who gets first access to new shares)
• different voting rights for different share classes
• dividend entitlements
• special approval thresholds for major decisions

In many cases, the constitution needs to work alongside a Shareholders Agreement. It’s important that they’re aligned: the constitution governs how the company must act and binds the company and shareholders under the Companies Act, while a shareholders agreement is a private contract (usually between shareholders, and sometimes the company). If they pull in different directions, you can end up with uncertainty (or disputes) right when you need clarity most - and you may need to amend one or both documents so they match.

You’ve Outgrown The “Default” Companies Act Settings

If your company started small, the default Companies Act rules might have been fine. But as you grow, you may want rules that match how you actually operate - for example:

• allowing shareholder decisions to be made by written resolution more easily
• setting out when director meetings can be held remotely
• tightening or loosening approval thresholds for certain decisions

You Want Better Control Over Shares And Ownership Changes

Share transfers are a classic “it’s fine until it isn’t” area. If there’s no clear process, someone can try to transfer shares in a way you didn’t expect - or you might not be able to stop an unwanted third party becoming a shareholder.

Changing the constitution can help you set out clear rules around:

• board approval requirements for transfers
• right of first refusal processes
• valuation mechanisms
• leaver provisions (what happens if a founder leaves)

You’re Trying To Reduce Governance Risk

Sometimes the goal is less about “business growth” and more about “business protection”. A review can highlight governance gaps - like unclear director powers, missing meeting rules, or outdated provisions that create risk.

If you’re not sure where your risks are, a Legal Health Check can be a good way to identify what needs updating across your core documents (not just your constitution).

Changing A Company Constitution In NZ: Step-By-Step

In New Zealand, changing a constitution generally needs to follow the Companies Act 1993 and your current constitution’s own rules (if it sets out a specific process).

Here’s a simple walk-through of how changes are often made in practice.

Step 1: Review The Existing Constitution (And Any Related Documents)

Start by pulling together:

• the current constitution (including any past amendments)
• any shareholders agreement or investment agreement
• recent Companies Office filings (to confirm the company details and share structure)

Your first job is to confirm two things:

• What does the constitution currently say about amendments? Some constitutions include extra procedural requirements.
• What problem are you trying to solve? It’s much easier (and cheaper) to draft a targeted amendment when you’re clear on the desired outcome.

This is also the stage where it’s worth getting legal help - not because the process is impossible, but because drafting the wrong clause (or missing a knock-on effect) can create major issues later.

Step 2: Work Out Whether You Need An Amendment Or A Full Replacement

Depending on how old or “template-like” your constitution is, you may either:

• amend specific clauses (common when you’re updating a few sections), or
• replace the constitution entirely (common if it’s outdated, inconsistent, or no longer fit for purpose).

For many small businesses, replacing the constitution can be cleaner than layering multiple amendments over time - but it depends on what you already have in place.

Step 3: Prepare The Proposed Changes

Your proposed changes should be drafted clearly and consistently. This might involve:

• a marked-up version showing the amendments, and/or
• a clean version of the amended (or replacement) constitution

If you’re changing related arrangements at the same time (for example, investor rights or transfer restrictions), you might also update the underlying contracts (like your shareholders agreement) using a Deed Of Variation. The key point is that your company records should clearly show what changed, when it changed, and who approved it.

Step 4: Get The Right Company Approvals (Usually A Special Resolution)

Under the Companies Act 1993, adopting, altering, or revoking a constitution generally requires a special resolution of shareholders.

A “special resolution” usually means approval by 75% of the votes of shareholders entitled to vote and voting on the resolution (unless your constitution requires a higher threshold, or the Act requires something different in your circumstances).

How you pass the special resolution can depend on your company structure:

• Shareholder meeting: you give notice, hold the meeting, and vote.
• Written resolution: common for smaller companies, where shareholders sign a written resolution instead of holding a formal meeting (in which case, you generally need signatures from shareholders holding at least 75% of the voting rights entitled to vote on the resolution).

It’s also common for the board to formally approve putting the resolution to shareholders. While board approvals aren’t always legally required for the amendment itself, documenting the process is good governance and helps avoid later arguments about whether the change was properly made.

Depending on your situation, you might also want to record the board decision using a Directors Resolution.

Step 5: Update Your Company Records And Communicate The Change

Once the resolution is passed, make sure you update and store:

• the signed special resolution (or meeting minutes)
• the updated constitution (clean final copy)
• your company minute book and internal registers

Even if your shareholders are also your directors (which is common in SMEs), it’s still important to keep these records tidy. If you ever sell the business, raise capital, or go through due diligence, these documents will likely be requested.

Do You Need To Notify The Companies Office (And What Else Must You Do)?

Yes - if you adopt, alter, or revoke a constitution, you generally need to deliver a copy to the New Zealand Companies Office (the Registrar) for registration.

As a general rule, when a constitution is adopted, altered, or revoked, it should be lodged with the Companies Office within 10 working days after the resolution is passed (and in any event, promptly - delays can create avoidable issues later).

It’s also good practice to check:

• Whether your share structure or shareholder details need updating (for example, if the change relates to share rights or transfers).
• Whether any other documents need to be aligned (shareholders agreement, option deeds, employee share plans, or funding documents).

Remember: changing the constitution doesn’t automatically “fix” everything else. If your constitution says one thing and your shareholder arrangements say another, you may still have a mess on your hands.

What If You Don’t File Or Record It Properly?

If you don’t follow the proper process for changing a company constitution, you can run into real-world problems such as:

• shareholder disputes about whether the change is valid
• difficulty enforcing the new rules (because approvals weren’t properly obtained)
• delays during investment, lending, or sale negotiations (due diligence teams will flag governance gaps)
• costly legal clean-ups later, often under time pressure

This is one of those areas where doing it “neatly” upfront is almost always cheaper than untangling it later.

Common Mistakes When Changing A Company Constitution (And How To Avoid Them)

Most issues we see with constitution changes aren’t about the idea of updating - they’re about execution. Here are some common traps to look out for.

1. Changing The Constitution Without Checking Your Other Agreements

If you have a shareholders agreement (or any investment terms), your constitution should not contradict it.

For example, your shareholders agreement might require unanimous approval for certain decisions, but your constitution might allow those decisions by ordinary resolution. If there’s a dispute, you could waste time (and money) arguing about which document controls what. In practice, company actions generally need to comply with the constitution, and a shareholders agreement may give contractual rights between the parties (including remedies if someone breaches it). That’s why alignment matters.

2. Using Generic Clauses That Don’t Fit Your Business

Constitutions can look “standard” on the surface, but small wording changes can have big consequences - especially around voting rights, share transfers, and director powers.

Templates often miss the nuance of how your business actually runs. If you’re changing a company constitution because something matters to you (like control, investment readiness, or ownership rules), it’s worth tailoring the drafting properly.

3. Not Thinking Ahead About Growth

It’s easy to draft for the business you have today. But a constitution should also support where you’re going next.

For example, imagine this: your company is doing well and you want to raise funds in 18 months. If your constitution doesn’t allow for different share classes, doesn’t clearly deal with pre-emptive rights, or has awkward approval thresholds, the fundraising process can get slower and more expensive than it needs to be.

4. Getting The Process Wrong (Especially Around Resolutions)

Even a perfectly drafted constitution change can fall over if the approvals weren’t obtained properly.

Make sure you’re clear on:

• who is entitled to vote
• what threshold applies (usually a 75% special resolution, unless your constitution says otherwise)
• whether you’re using a meeting or written resolution
• how you’ll record and store the approvals

5. Forgetting To Lodge And Store The Final Documents

It sounds simple, but it’s very common for businesses to have:

• multiple “final” versions of the constitution in circulation
• no signed copy of the shareholder resolution
• no clear record of when changes were approved

A clean paper trail is part of good governance - and it’s exactly what future buyers, investors, and banks want to see.

Key Takeaways

• Changing a company constitution is often a practical step when your business grows, brings in new shareholders, or needs clearer governance rules.
• In NZ, changes are usually made under the Companies Act 1993 and typically require a special resolution of shareholders (often 75% approval, unless your constitution requires more).
• You should decide early whether you’re making a targeted amendment or replacing the constitution entirely - replacing can be cleaner if the document is outdated or heavily amended.
• Always check your constitution aligns with your other key documents, especially a Shareholders Agreement, to avoid conflicting rules and disputes.
• Keep strong records (signed resolutions, meeting minutes, and clean final versions) and lodge the updated constitution with the Companies Office within the required timeframe.
• If you’re unsure, getting tailored legal help can save you time and prevent expensive clean-ups later - especially when ownership, voting rights, or share issues are involved.

If you’d like help with changing a company constitution (or reviewing whether your current one still fits your business), you can reach us at 0800 002 184 or team@sprintlaw.co.nz for a free, no-obligations chat.