CITY UNIVERSITY OF HONG KONG

School of Law
LW3902 The Law Relating to Companies

Submission Deadline (to Turnitin): Tuesday 28 February 2023, by 12:00 noon (before the lecture)

This assignment is worth 20% of the total marks. The word limit is 2,000 words (excluding
footnotes). Use font size 12 with single line spacing. Please also note the following points:

• You are required to strictly adhere to the policy of City University of Hong Kong on
plagiarism. Do not discuss your answer with others.

• All materials m ust be footnoted (bibliography is not necessary). You must use appropriate
authority (cases/legislation) to support your answer.

• No extension will be granted. Late submission will result in a deduction of one sub-grade
per day.

• You must cite your 1) student number; 2) seminar section (tutorial group); AND 3) your tutor’s
name on the top left-hand corner of the first page of your answer.

• You can only submit your assignment to Turnitin once.

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Assignment Question

Mrs. Taylor is thinking of setting up her own business selling balloons, pinatas, and party supplies.
She understands that there are risks involved but she is confident that the business will proper in the
long run. Mrs. Taylor is an expert on balloon arrangements. She is also a famous YouTuber and has
already produced hundreds of videos on YouTube.

Mrs. Taylor plans to invite Amber, her best friend to join her in this business venture. Amber is a
former Marketing Executive at a large retail store, she can speak 6 languages and can assist Mrs.
Taylor with promoting her business. Both Mrs. Taylor and Amber will contribute some funds to the
business, but they will obtain the initial funds from Amber’s husband, Daniel. Daniel agreed to
provide $880,000 as the initial funds to help start up the business. Mrs. Taylor and Amber will operate
two shops in Hong Kong - one in Central and the other in Kowloon Tong. Amber is primarily
responsible for the Central branch, and she will operate out of a property owned by her husband (the
property is also insured in his name). Mrs. Taylor will rent a property in Kowloon Tong, in her own
name. Mrs. Taylor also opened a credit account with Ball Ball Balloons Ltd (“BBB”) and she made
several purchases from BBB. BBB charged them to the account and the bills were sent to Daniel’s
premises in Central.

Advise the parties as to the different forms of business vehicles that they can adopt for their
business. Discuss the advantages and disadvantages of each option.