More and more investors look for investment advice to advance their short- and long-term financial goals. Abundant “tips” and “advice” regarding investment have become increasingly accessible through social media platforms. However, any company or individual carrying out regulated activities such as in the securities and futures market needs to apply for a relevant type of … Read more
Licensed money lenders offer an alternative route of financing for individuals and businesses. Generally, a person carrying on business as a money lender in Hong Kong must obtain a money lenders licence. This article will help you understand (i) the situations where you would need to obtain a money lender license to lend money and … Read more
When purchasing a business, depending on what you are specifically buying and taking over, you will either purchase assets or shares in a business. What is a share purchase? A share purchase involves purchasing the shares of the company from the shareholders. On purchasing the shares, as a buyer, you take all of the company’s … Read more
Due diligence is when potential buyers evaluate factors relating to a transaction, such as finances, assets, legal issues and external issues to gain a better understanding of the business. Essentially, it is a deeper dive investigation or audit into a specific situation/area relating to a business, that takes place before a formal contract is drafted … Read more
Heads of terms are different from a formal contract. This document sets out the preliminary terms of a commercial transaction agreed upon by the parties in the course of negotiations. It ensures both parties are on the same page as regards the major aspects of the transaction and prevents misunderstandings. While you do not need … Read more
Purchasing a business or a company indeed may be an easier option than starting your business from ground zero, but it is not an entirely automatic, straightforward process. Certain steps are typically involved in a business purchase transaction accompanied by their respective required legal documents. A business/company purchase transaction can broadly be divided into three … Read more
While starting a new business can be intriguing and exciting, the big downside is that you have to start from scratch. This is why some people opt to purchase an existing and established business instead. This means that instead of setting up a completely new business from the ground up, you are skipping all the … Read more
In Hong Kong, a loan can be given by an authorized money lender or a bank. Borrowing money from a financial institution which is not a bank is governed by the Money Lending Ordinance (MLO), whereas a bank loan is governed by the Code of Banking Practice (Code). Both regulations set out how money lenders … Read more
One of the main reasons people set up a private limited company is to limit their liability for business debt. The principle of separate legal entity of a company means that the right and liability of a company are separate from those of its directors. However, that does not mean that directors are free to … Read more
Although a shareholder is not generally held personally liable for the company’s debt, you should make sure you are aware of them so that you do not fall into a situation where this could happen. Limited liability of shareholders In Hong Kong, limited liability means when the shareholder’s liability is limited to a fixed amount, … Read more