Brian and Anne (together "B+A") are friends that start a business together. Both have been involved in music production. They now want to start a production company in Hong Kong. B+A now approach you to advise them on starting their new company.

Initially, B+A will be the only shareholders and the only directors. You have prepared the relevant documents and have a meeting with B+A. Brian notices that their new company will be a private company limited by shares. As Brian is not familiar with this term, he asks you to explain what the basic characteristics of this type of company are. Additionally, Brian is also concerned about liability and wants to understand liability as it relates to both the new company and its shareholders.

Please advise Brian and Anne regarding their queries.