Insolvency Law Flashcards
(29 cards)
An administrator must have a specific qualification. What is this qualification?
An administrator must be a qualified insolvency practitioner.
A liquidator must have a specific qualification.
What is this qualification?
A liquidator must be a qualified insolvency practitioner.
What is an alternative to liquidation for a company in financial difficulties which is used to safeguard the continued existence of the company?
Administration
Who is the Official Receiver?
The Official Receiver is appointed by the Courts as the Provisional Liquidator if the Courts grant a compulsory liquidation order.
What case resulted in the Courts granting a compulsory liquidation order on the grounds that the company was in fact a quasi-partnership?
Ebrahimi v Westbourne Galleries
What case resulted in the Courts granting a liquidation order due to a deadlock on the Board?
re Yenidje Tobacco Co. Ltd.
In re German Date Coffee Company, the Court granted a liquidation order on what grounds?
The Courts found that as the sub-statum of the company (the patent) no longer existed, it was just and equitable to dissolve the company.
A court may grant a liquidation under what 2 main grounds?
- On the grounds that it would be just and equitable
2. On the grounds that the company is unable to pay its debts as they fall due
A declaration of solvency is prepared under which form of liquidation?
Members’ voluntary liquidation
What criteria must be met for a private company to pass a written resolution to place the company into liquidation?
A majority of 75% must vote in favour of the resolution
What type of resolution is passed by members to put the company into liquidation?
A special resolution, which requires at least 75% majority voting in favour
The Court can direct a public company to be liquidated where that company has failed to obtain a trading certificate within 12 months of incorporation.
True or False?
True
What is the main difference between members’ voluntary liquidation and creditors’ voluntary liquidation?
The level of solvency
Members’ voluntary liquidation occurs when directors believe that the company is solvent, while creditors’ voluntary liquidation occurs when creditors believe that the company is insolvent.
What are the types of voluntary liquidation?
There are 2 types of voluntary liquidation - members and creditors.
Members’ voluntary liquidation is for solvent companies.
Is this statement true or false?
True.
Who can appoint an administrator without a court order?
Secured creditors, directors and members by resolution
Is it a criminal offence for a director to make a declaration of solvency without having reasonable grounds?
Yes, punishable by fine or imprisonment
What does the declaration of solvency include?
The company’s assets and liabilities as at the latest practicable date before the declaration was made
Within how many days of making an order for compulsory winding up must a statement of affairs be delivered to the Official Receiver?
21
A signed copy of the resolution for liquidation must be delivered to the Registrar within 15 days.
Is this statement true or false?
True
What is administration?
Administration involves putting an insolvency practitioner in control of the company with a defined programme for rescuing the company from insolvency as a going concern
How many statutory reasons are there for the courts to compulsorily wind up a company?
7
How long can administration last?
Up to 12 months
With a members’ voluntary liquidation, who approves the liquidator’s actions?
General meeting of members
