For information
on 24 March 1987
CONFIDENTIAL
100
0/6
No Thomas
XCCI (87) 15 23
Copy No.
NOTE FOR EXECUTIVE COUNCIL
REPORT OF THE STANDING COMMITTEE ON
COMPANY LAW REFORM
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My
Am
There
Annexed for the information of Members is the Third Report of the Standing Committee on Company Law Reform (the "Standing Committee").
Background
2
amendments
on
as
The Standing Committee was appointed by the Governor in January 1984 to advise the Financial Secretary the Companies Ordinance (the "Ordinance") and when experience shows them to be necessary. The terms of reference of the Standing Committee (which are set full in Appendix 1 to the Report) require it to report annually through the Secretary for Monetary Affairs to the Governor in Council on the amendments to the Ordinance that are under consideration.
out in
The Report
3
The
Third Report has now been submitted to the The main areas covered by the Report summarised below -
Government.
I
4
Prohibition of provision of financial assistance by
a company for the purchase of its own shares
section 48 of the Ordinance)
Purchase by a company of its own shares
Distributable profits
are
Section 48 of the Ordinance prohibits the provision of financial assistance by a company for the purchase of its own shares except where a company
(a) lends money for the purpose in the ordinary course of business, part of which is the lending of money;
(b) provides money, under a scheme, for the purchase by trustees of fully paid shares to be held by or for employees; or
(c)
lends money to bona fide employees, other than directors, with a view to enabling them to purchase fully paid shares.
CONFIDENTIAL