Company Law 3 Flashcards
(21 cards)
What is meant by company accounts?
Financial records that show the financial status of a company.
What is an auditor?
An independent person who examines the financial records of a company.
Who appoints auditors?
Generally appointed by shareholders at the AGM.
What are the rights of an auditor?
Access to books, attend meetings, and receive notices.
What are the duties of an auditor?
To provide an independent opinion on whether financial statements are true and fair.
What is fraudulent trading?
Carrying on business with intent to defraud creditors.
What is wrongful trading?
Continuing to trade when directors know the company cannot avoid insolvency.
What is insolvency?
The state where a company is unable to pay its debts.
What is liquidation?
The process of winding up a company and distributing its assets.
What is voluntary liquidation?
A winding up initiated by members or creditors voluntarily.
What is compulsory liquidation?
A court-ordered winding up of a company.
Who can petition for compulsory winding up?
Creditors, the company, shareholders, or the Registrar.
What is a liquidator?
A person appointed to wind up a company’s affairs.
What are the powers of a liquidator?
To sell assets, pay debts, and distribute surplus to members.
What is the priority of creditors?
Secured creditors are paid first, then preferential creditors, followed by unsecured creditors.
What is meant by reconstruction?
Reorganizing a company’s structure to improve efficiency or profitability.
What is a scheme of arrangement?
A court-approved agreement between a company and its creditors or shareholders.
What is amalgamation?
The merging of two or more companies into one.
What is the role of the court in liquidation?
To supervise the process and resolve disputes.
What is striking off?
Removing a company from the register, effectively dissolving it.
