Constitutions for Startup Companies

whipit.co.nz

A small start-up company with just one owner does not need anything but the bare essentials when setting up in business.  With no other shareholders there is no point in having a constitution. The main reasons for having a constitution are:

  1. to create pre-emptive rights on the sale of shares
  2. to allow the company to buy back its own shares
  3. to allow the company to indemnify and insure its directors
  4. to remove or modify the application of section 45 of the Companies Act (which requires new shares to be offered pro rata to existing shareholders first)
  5. to allow directors appointed by a majority corporate shareholder to vote in the interests of the shareholder instead of the company.
  6. to provide for different ways of appointing directors.

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