John is a controlling shareholder and sole director of a company limited by shares known as Big Book Ltd (‘the Company’) specializing in the book reselling business. The Company has been doing good business in recent years and the profit gained has been put on capital reserve. Kitty holds a small percentage of shareholding in the Company. Kitty now wants to sell her shares because she will migrate to Australia soon. She has talked with John about her plan. John knows from his accountant that a company’s share capital is an untouchable fund. Why is the law so concerned about maintaining the capital of a company? John wishes to purchase Kitty’s shares but he lacks the cash. He wonders if the Company can offer him financial assistance for such a share purchase. With reference to the relevant provisions in the Companies ordinance (Cap. 622), explain to John the restrictions and any viable exception (s), if applicable, on financial assistance for the acquisition of the Company’s own shares. Since the Company has a good cash reserve, Kitty wishes to know if she can sell her shares to the Company. Explain to her the present requirement of the Companies Ordinance (Cap. 622) with regard to share buy-backs by companies from their members.Show transcribed image text John is a controlling shareholder and sole director of a company limited by shares known as Big Book Ltd (‘the Company’) specializing in the book reselling business. The Company has been doing good business in recent years and the profit gained has been put on capital reserve. Kitty holds a small percentage of shareholding in the Company. Kitty now wants to sell her shares because she will migrate to Australia soon. She has talked with John about her plan. John knows from his accountant that a company’s share capital is an untouchable fund. Why is the law so concerned about maintaining the capital of a company? John wishes to purchase Kitty’s shares but he lacks the cash. He wonders if the Company can offer him financial assistance for such a share purchase. With reference to the relevant provisions in the Companies ordinance (Cap. 622), explain to John the restrictions and any viable exception (s), if applicable, on financial assistance for the acquisition of the Company’s own shares. Since the Company has a good cash reserve, Kitty wishes to know if she can sell her shares to the Company. Explain to her the present requirement of the Companies Ordinance (Cap. 622) with regard to share buy-backs by companies from their members.
“Looking for a Similar Assignment? Get Expert Help at an Amazing Discount!”
What Students Are Saying About Us
.......... Customer ID: 12*** | Rating: ⭐⭐⭐⭐⭐"Honestly, I was afraid to send my paper to you, but splendidwritings.com proved they are a trustworthy service. My essay was done in less than a day, and I received a brilliant piece. I didn’t even believe it was my essay at first 🙂 Great job, thank you!"
.......... Customer ID: 14***| Rating: ⭐⭐⭐⭐⭐
"The company has some nice prices and good content. I ordered a term paper here and got a very good one. I'll keep ordering from this website."
