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Mr. Silva who is the sole shareholder of Silva & Company Limited, which is making reasonable profits, is offering 50% of the shares of his company to Fortune Group (a medium sized group of companies engaged in diverse business in manufacturing and trading) for Rs.5 million. However, Mr. Silva has already lent Rs.5 million to his company by taking as security the entire stock of machinery of Silva & Company Limited which consists of the entirety of the assets of the company. What advice do you give Mr. Silva''s company?
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Mr. Silva's company needs to consult with an attorney regarding this transaction.
Answered on Apr 29th, 2012 at 5:43 AM