A Description and Analysis of Mascotte
Mascotte is a Hong Kong based company that has 30 years of experience in manufacturing computer, photo, video, and multi-media bags and accessories. Mascotte is listed in the Hong Kong Stock Exchange, since it turned into a public company in September 1997. The company has over 1,000 workers and products, making it a large business company. Mascotte also employs a team of varied nationalities from Germany, Japan, French, English, etc.
They are a multinational company that has headquarters in the US, Germany, and China. Ownership, The Pros And Cons Since September 1997, Mascotte turned into a public limited company in Hong Kong now listed on the Hong Kong Stock Exchange. Prior to that, it was a private company with one main shareholder. Ever since getting recognition for their products (ISO-9002 Quality Certificate for manufacturing), Mascotte decided that the time is ripe for the company to go public, in order to raise more capital for expansion.
MIA buys and sells it’s shares on the Stock Exchange, which helps Mascotte to raise capital more quickly and expanding the business further. However, being a public company has it’s risks, for it is very dependable on luck and the economy. The day to launch new shares has to be chosen in advance, and if the day is not exactly right, then a great many people may want to sell their shares or the company may sell less shares than it intends to. Mascotte has minimized this risk by making a ‘placement’ with a Hong Kong Bank.
Hong Kong bank would recommend some of Mascotte’s shares to various institutions that are interested in buying shares, and if they agree to buy the shares, the bank places these investors with the shares before the actual day of issuing shares comes along. It is a good idea since the company would not lose money even if on that day the prices of the stock drop. Limited Liability? Mascotte has limited liability, in order to encourage it’s shareholders to invest in the company.
Mascotte is constantly expanding and therefore feels the need to have limited liability since shareholders are at risk of losing their capital when they invest in business. Finance Mascotte have access to a wide range of finance since it is a multinational corporation and a public company. People would be more inclined to invest in Mascotte since it is seen as being more financially secure than a partnership or a sole trader. Mascotte can raise capital through shares, bank loans, overdrafts, mortgages, etc.
They also have the advantage of being able to borrow money at a lower rate of interest since it is a large company. Control Most of Mascotte’s shares are owned by Ms Chan Oi Ling, who is the chairwoman of the company, therefore she holds the most control in the company. Originally, Mr Daniel Lam, the director and founder of the company had held the most control and shares in the company, until he sold a large amount of shares to Ms Chan Oi Ling for financial reasons.
This shows that a public limited company has a high risk of losing control, when the shares could be bought or sold frequently, causing a split of an ownership. I assume that Mascotte may be owned by Ms Chan Oi Ling, but the decisions may be left to the director though the chairwoman gets a bigger profit. The director is also at risk of being sacked by the chairwoman, although I believe there is little likelihood of that happening since they have common views and gets on well as business partners.
Profits Mascotte’s shareholders may earn profits in two ways. They could be paid a dividend from the shares they are holding, which is a return from the face value of the shares. They may also choose to sell their shares at a much higher price than what they have originally paid for, therefore making fortunes if the business is prosperous and the value of the company raises. Legal Liabilities Since Mascotte is a medium to large business, there are complicated legal requirements to deal with.
I assume that Mascotte has employed it’s own specialist lawyers to deal with the paperwork and registration of the company, which would involved a submission of the memorandum of the business. This is necessary to gain recognition and approval from the Registrar of Companies in Hong Kong. The memorandum is available for the general public to read and it provides a general idea of the company and it’s objectives. It usually includes the company’s name, registered address, objectives, capital, and objectives. Mascotte would also have to present an article of association, which states the rules that govern the company.