corporate liquidation and 2 alternatives

Question 1

what is insolvency (4 definitions)

3333sssss

Answer 1

s.384 IA

1. indebted to creditor
2. issues decree by court
3. court satisfied unable to pay (cash flow test)
4. balance sheet test

Question 2

2 types of corporate insolvency tests

Answer 2

384
cash flow test

balance sheet

Question 3

when does insolvency begin?

Answer 3

1. when meeting is made: for voluntary
2. lodged in court

Question 4

liquidation

define

2 broad types of liquidation (describe)

consequences of liquidation order

Remember 4s!

Answer 4

SOLVENT LIQUIDATION INCLUDE

• members’ voluntary liquidation (s.401)

director meeting
declaration of solvency - 5 weeks before members’ meeting
members meeting - special resolution
notice to the registrar - 14 days of the special resolution
meeting (Shareholders)
report to registrar (accounts sent)
disollution 3 months later

INSOLVENT LIQUIDATION INCLUDE
- creditor’s voluntary liquidation
s.406
statement seeting out financial position of the company (details of assetsliabitlities, name of creditors, securities, date securities were given)
laid before the creditor meeting

• compulsory liquidation
  423 high court
  424- reasons (6)
  425- who can make application?
  434- a official reciever appointment to oversee liquidation
  s.435- duty of official reciver to conduct investidation into failure of company
  s.427 - powers of the court

consequences of liquidation: atleast 3

Question 5

administration

aim and objectives (prov)

who can appoint administrator? 2 ways

adv (3 persons)

process (5 stages)

duties: 3

Powers?

ending: 4

5ssds (222…333…6666…7…8888….999

Answer 5

s.522

s.522: L is not A

appoin:
court order

without a court order:
s.523 (floating charge (535….or by the company and its directors…537)

adv
for company

for members

creditors

process:
563: give notice
563: provide statement of affairs
566:proposals
568: convente a meeting crweditor eithin 70 days
s.570: give accounts to court of meeting

duties:
1.take control of the company’s property -584
2. manage the affirs -585
3. adm an agent -586

powers of admin: 4th schedule

ending:
591- application
593: ends after 12 months
595: adm applic to court
596: believes the purpose of admin is fulfilled,

Question 6

receivership - define

3 types

6sssss!

Answer 6

def: proper manage

3 types:
court-appointed
land registration act or chargor appoints
administrator receiver (690): appointment as holder of property on behalf of the holder of any debentures which was a floating charge or another
also, they are appointed as receivers of the company’s property