Can a minor be a shareholder in a company in New Zealand? It’s a question more and more families are asking—especially as business owners look to involve their children or plan for the future.
If you’re managing a family business, preparing for succession, or considering giving shares to your child, it’s crucial to understand the legal rules first. While there’s no specific age limit for owning shares, New Zealand company law has a few twists you should understand before adding a minor to your share register.
In this article, we’ll walk you through everything you need to know: the legal side, the risks, the practical issues, and the smarter ways to structure ownership if your child is under 18. You’ll also get tips on family trusts, tax implications, and what works best for long-term planning.
Let’s make it simple — so you can make the right call.
Can a minor legally be a shareholder in NZ?
Yes, a minor can legally be a shareholder in a New Zealand company. The Companies Act 1993 doesn’t set a minimum age for shareholders. However, because minors (under 18) have limited legal capacity, practical and legal challenges can arise.
What the Companies Act 1993 says
There’s no clause in the Companies Act that explicitly prohibits a minor from holding shares. Legally speaking, a child can own shares — but signing documents, agreeing to shareholder resolutions, or handling disputes might not be so simple.
Age restrictions and legal capacity
Because minors lack full legal capacity, they can’t always enter into binding contracts. That creates complications if the company needs signatures, consents, or legal enforcement.
Because minors lack full legal capacity, they can’t always enter into binding contracts. That creates complications if the company needs signatures, consents, or legal enforcement.
Table – Legal capacity of minors in company matters
| Scenario | Can a minor act independently? | Requires guardian/trustee? |
|---|---|---|
| Signing shareholder resolutions | No | Yes |
| Entering shareholder agreements | No | Yes |
| Receiving dividends | Yes (with tax implications) | Possibly |
| Voting at shareholder meetings | No | Yes |
| Opening a bank account in company name | No | Yes |
Potential issues:
- Difficulty signing shareholder resolutions
- Disputes may require guardian involvement
- Banks and financial institutions may hesitate to recognise underage shareholders
What are the risks of adding a minor as shareholder?
Adding a minor to the share register can be done — but it’s not always smooth sailing. You need to understand the risks upfront.
Contractual limitations
Minors generally can’t be held to legal contracts, which may affect share transfer agreements, company constitutions, or shareholder loans.
Practical issues (signatures, consent, disputes)
Even everyday tasks like approving a dividend or passing a resolution can become tricky. In some cases, guardians may need to act on the minor’s behalf — and that adds complexity.
Bullet points – Administrative challenges:
- Inability to vote without guardians
- Complexity in tax treatment of dividends
- Difficulty managing shareholder current accounts
You might be also interested to read the following: Shareholder current account interest rate
How to structure share ownership for a child
If you want to involve a minor in your company, there are safer ways to do it — starting with using a trust.
Using a trust to hold shares
A common approach is to establish a family trust where the trustee holds shares for the benefit of the child. This avoids the legal restrictions of minor ownership while giving the child future benefit.
IMAGE: Diagram of trust structure with parents/trustee holding shares for minor
Role of guardians or trustees
If shares are issued directly to a minor, you may need guardians to act as signatories. With a trust, the trustee can act independently and in the best interest of the child.
Alternatives to direct shareholding for minors
If you’re not ready to set up a trust, there are other ways to plan for future ownership.
Gifting shares later
One option is to keep full ownership until your child reaches 18, then transfer the shares. This way, you avoid the legal headaches of underage ownership.
Creating a holding company
Another method is to create a holding company that owns the main business. You can then transfer shares in the holding company when your child is legally able to hold them.
Learn more about: Retain earnings NZ
Bonus: Tax and succession planning tips for families
Bringing children into a business isn’t just a legal decision — it’s also a financial one. Think long-term when making the move.
Bright-line rules and minor shareholders
If the company owns property, having a minor on the share register could impact bright-line test calculations. This matters for families with investment companies.
Long-term strategies to reduce tax
Using shareholder salaries, setting up trusts, or carefully timing share transfers can all help manage tax liabilities across generations.
Table – Tax tools for family companies
| Strategy | Benefit |
|---|---|
| Shareholder salary | Income splitting across family members |
| Retain earnings | Delay dividend tax obligations |
| Trust structures | Protects assets and controls distribution |
| Gifting shares at 18 | Avoids early tax complications |
Related read: Shareholder salary
Conclusion
So, can a minor be a shareholder in a company in New Zealand? Technically yes — but with caution. While there’s no legal barrier under the Companies Act, the practicalities can quickly get complicated. Minors can’t sign contracts, vote on resolutions, or manage share transactions without help from a guardian or trustee.
If you’re serious about involving your child in your business, the smarter path often involves using a trust or delaying share transfers until they turn 18. You’ll not only avoid legal hurdles but also gain better control over tax and succession planning.
Still unsure what’s right for your family business? Talk to a professional. At BH Accounting, we can walk you through the safest, most tax-efficient way to structure things — without the headaches.
FAQ about can a minor be a shareholder in a company
Can a child legally hold shares in NZ?
Yes, a minor can be listed as a shareholder, but they can’t enter contracts or act independently.
Is it better to use a trust to hold shares for my child?
In most cases, yes — it avoids the legal and administrative limitations of minor ownership.
What happens if a minor shareholder turns 18?
They gain full legal control of their shares and can vote, sell, or transfer them without guardian involvement.
Can minors receive dividends?
Yes, but it may trigger tax implications depending on the amount and structure.
Do I need a lawyer to issue shares to a minor?
It’s highly recommended — especially if you’re not using a trust or holding company.