Question 1

April holds 90% shares in a company

limited by shares. She is facing financial

difficulties and has approached

a bank

for loan taking

. The

bank

lent HK1 million to

April.

The loan is secured by a mortgage over April

's shares in the company. April

signed the form of instrument of transfer of shares.

April has become uneasy about the loan taking and is concerned her position should she

become unable to repay the loan. Advise her.

Question 2

Peter is a minority shareholder in Rich Ltd. which is a private company

limited by

shares

. He is preparing for retirement

soon

and wishes to know if he can sell his

shares

to Rich Ltd. Explain to him

the present requirement o

f the Companies Ordinance (Cap

622) with regard to share buy

-backs by companies from their members.