City University of Hong Kong

Course Syllabus

offered by School of Law

with effect from Semester B 2021/22

Part I Course Overview

Course Title: Company Law II

Course Code: LW5657

Course Duration: One semester

Credit Units: 3

Level: P5

Medium of
Instruction: English

Medium of
Assessment: English

Prerequisites:
(Course Code and Title) LW5656 Company Law I

Precursors:
(Course Code and Title) Nil
LW4657 Company Law II
Equivalent Courses: LW6104E Company Law II (only applicable to students who completed
(Course Code and Title) LW6104E before Sem A 2019/20)

Exclusive Courses:
(Course Code and Title) Nil

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Part II Course Details

1. Abstract

This course aims to build upon basic company law knowledge through a review of the law, policy and
practice in relation to equity and debt financing of companies, and the external administration of
companies (receivership, liquidation etc).

2. Course Intended Learning Outcomes (CILOs)

(CILOs state what the student is expected to be able to do at the end of the course according to a given standard of
performance.)

No. CILOs Weigh Alignment DEC related

ting with learning
PILOs outcomes
A1 A2 A3
1. Describe and explain principles of company law 20% 1, 2, 3, 4, 
dealing with corporate financing and external 5.
administration.
2. Apply principles of company law to solve legal 30% 1, 2, 3, 4,  
problems involving corporate financing and external 5.
administration of companies by:
 analysing cases
 interpreting statutes
 conducting independent research on the law
and relevant legal issues
 marshalling arguments clearly, logically,
coherently and effectively, both orally and in
writing.
3. Research, analyse and critically evaluate: 50% 1, 2, 3, 4,   
 legal principles and doctrines in company 5.
law dealing with corporate financing and
external administration in light of both
doctrinal coherence and in relation to the
policy objectives of the law
 the implications of the above principles and
doctrines of company law in facilitating or
limiting the achievement of a business's
commercial or other goals and in balancing
the competing interests of the investors,
creditors, managers, employees and the
public.
100%

A1: Attitude: Develop an attitude of discovery/innovation/creativity, as demonstrated by students possessing

a strong sense of curiosity, asking questions actively, challenging assumptions or engaging in inquiry
together with teachers.
A2: Ability: Develop the ability/skill needed to discover/innovate/create, as demonstrated by students
possessing critical thinking skills to assess ideas, acquiring research skills, synthesizing knowledge
across disciplines or applying academic knowledge to self-life problems.
A3: Accomplishments: Demonstrate accomplishment of discovery/innovation/creativity through producing
/constructing creative works/new artefacts, effective solutions to real-life problems or new processes.

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3. Teaching and Learning Activities (TLAs)
(TLAs designed to facilitate students’ achievement of the CILOs.)

TLA Brief Description CILO No. Hours/week

1 2 3 (if applicable)
Reading of  Students will acquire knowledge of the 
cases, substantive rules of company law dealing with
statutes and corporate finance and external administration.
other This would be through both set readings and
material, and other materials acquired through the student’s
research own research.
 Students will learn and evaluate conceptual and 
policy issues in company law dealing with
corporate finance and external administration
through multimedia or other presentations. This
would be through both set readings and other
materials acquired through the student’s own
research.
Lectures  Students will receive guidance on their reading 
and research through multimedia or other
presentations.
 Students will be introduced to issues and 
concerns and aspects of the operation of the
substantive rules of company law dealing with
corporate finance and external administration.
Several  Students will analyse cases, interpret statutes, 
lectures will and may need to research issues of company law
include small dealing with corporate finance and external
group / administration.
interactive  Students will apply relevant legal analysis to
sessions case study situations, thereby developing issue
recognition, problem solving and application
skills.
 Students will present arguments orally and may
need to provide written submissions.
 Students will scrutinise, analyse and evaluate 
issues and concerns in the field of company law
dealing with corporate finance and external
administration through group discussions

4. Assessment Tasks/Activities (ATs)

(ATs are designed to assess how well the students achieve the CILOs.)

Assessment Tasks/Activities CILO No. Weigh Remarks

1 2 3 ting
Continuous Assessment: 30%
Contribution toward Knowledge Building: 15%
Students’ ability to describe and explain substantive rules of 
company law will be tested by the above assessment
tasks/activities.
Students’ ability to research, analyse and resolve problems, and 
to communicate arguments orally and in writing will be tested.
Students’ ability to analyse and critically evaluate, and to 
communicate arguments orally and in writing will be tested.
Presentation: 15% 
Students’ ability to research, collect data and decipher primary
and secondary materials, and to analyse and critically evaluate

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 issues in company law, and to communicate arguments in
writing will be tested.
Examination: (duration: 2 to 3 hours , if applicable) 70%
Students’ ability to apply the principles of company law to 
given situations, to resolve problems, and to communicate
arguments in writing will be tested.
Students’ ability to analyse and critically evaluate, and to 
communicate arguments in writing will be tested.
100%

Grading of Student Achievement: Standard (A+ A A- … F)

To pass this course students must obtain an aggregate mark of 40% and a minimum of 40% in each of the
continuous assessment and the examination elements of the assessment. Continuous Assessment for this
purpose means those ways in which students are assessed otherwise than by the end of session
examination.

The portion of the overall mark allocated to performance/participation in inter-active in class activities
will be assessed on the quality of the participation. Assessment criteria for those activities, their nature and
their timing will be set out in the study guide/course manual and will be further expanded upon by the
course leader.

To enable the full benefit to be obtained from this course, students should attend all of the classes and
activities.

Assessment will be formative to enable students to demonstrate their capacity to understand, analyse and apply
rules and principles and summative to assess ability to synthesise primary and secondary material to solve
novel problems.

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5. Assessment Rubrics
(Grading of student achievements is based on student performance in assessment tasks/activities with the following rubrics.)

Assessment Task Criterion Excellent Good Fair Marginal Failure

(A+, A, A-) (B+, B, B-) (C+, C, C-) (D) (F)
1. Examination 1.1 Perspicacity in High Significant Moderate Basic Inadequate
identifying the nature
of the legal issue/s
implicated

1.2 Sophistication in High Significant Moderate Basic Inadequate

analysis

2. Presentation 2.1 Depth of research High Significant Moderate Basic Inadequate

2.2 Synthesis and High Significant Moderate Basic Inadequate

argument

3. Contribution 3.1 Preparedness and High Significant Moderate Basic Inadequate

toward contribution
Knowledge
Building
3.2 Ability to work in High Significant Moderate Basic Inadequate
groups

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Part III Other Information (more details can be provided separately in the teaching plan)

1. Keyword Syllabus
(An indication of the key topics of the course.)
• Financing corporate enterprises.
• Share capital.
• Public issues of securities and official listing.
• Borrowing and loan capital.
• Security for loans and charges.
• Creditor remedies, including receivership.
• Corporate rescue processes.
• Liquidation.

Detailed Syllabus:

• Financing corporate enterprises – an overview. Background to Hong Kong as a financial centre.

Debt and Equity.
• Share capital: the issue of equity and equity type securities, types of share, rights issues and
subscription agreements; the rules of maintenance of share capital, reduction of capital, financial
assistance, purchase of own shares, reorganizations. Problems on transfer.
• Public issue: requirements of the Companies Ordinance, disclosure obligations, contents of
prospectuses and defective information.
• Official listing: minimum requirements, preparation for flotation, procedures and requirements.
Continuing obligations and raising additional capital.
• Borrowing and loan capital: money, debt, credit, security; loans and borrowing; loan facilities
and loan agreements, security and creditor protection covenants, debt securities – an examination
of various types, their uses and purposes.
• Security for loans, types of charge, registration of charges and priorities, typical protection
clauses and their efficacy, eg negative pledge and automatic crystallization.
• Creditor remedies, including receivership.
• Corporate failure: causes and effects.
• Corporate rescue processes.
• Liquidation (an overview of the winding-up procedure and its consequences, including the re-
opening of antecedent transactions and the role of the liquidator) and dissolution.

2. Reading List
Text(s):
Stefan Lo & Charles Qu, Law of Companies in Hong Kong, 2nd ed (Sweet & Maxwell. 2015)

Books:

 Vanessa Stott, Hong Kong Company Law, Longman, Hong Kong (12th edition)
 Philip Smart, Katherine Lynch, Anna Tam, Hong Kong Company Law: Cases,
Materials and Comments, Butterworths, Hong Kong, 1997
 Hong Kong Company Law Handbook: Companies Ordinance, Butterworths, Hong
Kong
 Mayson S, French D, Ryan C, Mayson, French & Ryan on Company Law,
Blackstone, London (latest edition)
 Davies P, Gower and Davies’ Principles of Modern Company Law, Sweet and
Maxwell, London (latest edition)
 Pennington R, Pennington’s Company Law, Butterworths, London (latest edition)
 Farrah J and Hannigan B, Farrar’s Company Law, Butterworths, London, (latest
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 edition)
 Sealy L, Cases and Materials in Company Law, Butterworths, London, (8th edition)
 Hicks A and Goo S H, Cases and Materials on Company Law, Oxford University
Press, Oxford (latest edition)
 Morse G, Partnership Law, Blackstone, London (latest edition)
 Banks L R, Lindley and Banks on Partnership, Sweet and Maxwell, London (latest
edition)
 Ferran E, Principles of Corporate Finance, Oxford University Press, Oxford, 2008
 Low C K, ed, Financial Markets in Hong Kong, Springer, Singapore, 2000
 McGuinness P, A Guide to the Equity Markets of Hong Kong, Oxford University
Press, Oxford, (latest edition)
 Sin K F, Building Project Finance in Hong Kong, 2nd ed, Butterworths, Hong Kong,
1999
 Sabine M, Corporate Finance: Flotations, Equity Issues and Acquisitions,
Butterworths, London (latest edition)
 Rutterford R and Montgomerie R, Handbook of UK Corporate Finance, Butterworths,
London (latest edition)
 Goode R, Commercial Law, Butterworths, London, (latest edition)
 Goode R, Legal Problems of Credit and Security, Sweet and Maxwell, London, (latest
edition)
 McCormack G, Registration of Company Charges, Sweet and Maxwell, London, 1994
 Goode R, Principles of Corporate Insolvency Law, Sweet and Maxwell, London, 1997
 Hadden T, Company Law and Capitalism, 2nd ed, Weidenfeld & Nicolson, London,
1977

Looseleaf services:

 Company Law in Hong Kong – Practice and Procedure, Sweet and Maxwell, Hong
Kong
 Hong Kong Company Law: Legislation and Commentary, Butterworths, Hong Kong
 Hong Kong Company Law and Practice, CCH, Singapore
 The Law of Loans and Borrowing, Sweet and Maxwell, London

Specialist law reports on company law:

 Butterworths Company Law Cases (BCLC)

 British Company Cases (BCC)
 Australian Company Law Cases (ACLC)
 Australian Corporations and Securities Reports (ACSR)

Law journals specialising in company and business law:

 Australian Journal of Corporate Law (Aust Jnl of Corp Law)

 Company and Securities Law Journal (C & SLJ)
 The Company Lawyer (Co Law)
 Journal of Business Law (JBL)

Law reform papers:

 Companies Law Revision Committee, First Report: Protection of Investors, 1971;

Second Report: Company Law, 1973
 Consultancy Report Review of the Hong Kong Companies Ordinance (Pascutto

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 Report) 1997
 Standing Committee on Company Law Reform Report on Pascutto Report 2000
 Standing Committee on Company Law Reform Consultation Paper on the Proposals
made in Phase I of the Corporate Governance Review 2001
 Standing Committee on Company Law Reform Consultation Paper on the Proposals
made in Phase II of the Corporate Governance Review 2003
 Annual Reports of the Standing Committee on Company Law Reform
 Report of the Review Committee on Insolvency Law and Practice (the Cork Report)
London 1982
 The Law Reform Commission of Hong Kong issued three Reports as part of its
Insolvency Law Review between 1995 and 1999 on Bankruptcy, Corporate Rescue
and Insolvent Trading, and the Winding-up Provisions of the Companies Ordinance
respectively.

Online Resources:

 Companies Registry, http://www.info.gov.hk/cr

 Securities and Futures Commission, http://www.hksfc.org.hk
 Hong Kong Stock Exchange, http://www.hkex.com.hk/index.htm