Corporate Law Assig
Hong Kong Institute of Vocational Education
Corporate Law and Practice (ACC4106)
2014-2015 Continuous Assessment
Assignment
Task: Company Law in Practice
Understanding a listed company in Hong Kong
Class: BA124001/2B
Name:
Chan Choi Nog (130257408)
Chan Yin Ting ()
Chu Tsz Ting (130153619)
Lai Ka Fai ()
Siu Lok Man (130240174)
Q2
(a) Firstly, GLL can issue share to raise fund.
The company can have private placing to issue share. It can negotiate with individuals who have prior approval of members in General Meeting for placing its shares.
GLL can choose to issue ordinary shares, preference shares or redeemable shares to raise fund.
The advantage of issuing share is that the company is financially more stable since it will not have the risk of being wound up by the creditors. The share capital can be kept in company for a long period and will not repay to the shareholders before the company liquidated except the redeemable shares.
The disadvantage of issuing shares is that the equity of the company will be diluted from the existing shareholders. There are more people become the shareholders of company. The dividends distributed to the shareholders may be reduced.
Secondly, GLL can borrow bank loan to raise fund.
Unsecured loan is that the loan without any security to secure its repayment. Secured loan with fixed charge is that the charge of the loan is a charge over ascertained and definite property. Secured loan with floating charge is a charge does not attach to any particular asset and the company may continue to use those assets in the ordinary course of business.
The advantage of borrowing bank loan is that the equity of shareholders will not be diluted because the creditors are not the shareholders of the company. The loan is not the equity of the company and dividends will not be distributed to the creditors.
The disadvantage is that the company may incur some extra costs, e.g. interests and application fees, when the company
Corporate Law and Practice (ACC4106)
2014-2015 Continuous Assessment
Assignment
Task: Company Law in Practice
Understanding a listed company in Hong Kong
Class: BA124001/2B
Name:
Chan Choi Nog (130257408)
Chan Yin Ting ()
Chu Tsz Ting (130153619)
Lai Ka Fai ()
Siu Lok Man (130240174)
Q2
(a) Firstly, GLL can issue share to raise fund.
The company can have private placing to issue share. It can negotiate with individuals who have prior approval of members in General Meeting for placing its shares.
GLL can choose to issue ordinary shares, preference shares or redeemable shares to raise fund.
The advantage of issuing share is that the company is financially more stable since it will not have the risk of being wound up by the creditors. The share capital can be kept in company for a long period and will not repay to the shareholders before the company liquidated except the redeemable shares.
The disadvantage of issuing shares is that the equity of the company will be diluted from the existing shareholders. There are more people become the shareholders of company. The dividends distributed to the shareholders may be reduced.
Secondly, GLL can borrow bank loan to raise fund.
Unsecured loan is that the loan without any security to secure its repayment. Secured loan with fixed charge is that the charge of the loan is a charge over ascertained and definite property. Secured loan with floating charge is a charge does not attach to any particular asset and the company may continue to use those assets in the ordinary course of business.
The advantage of borrowing bank loan is that the equity of shareholders will not be diluted because the creditors are not the shareholders of the company. The loan is not the equity of the company and dividends will not be distributed to the creditors.
The disadvantage is that the company may incur some extra costs, e.g. interests and application fees, when the company