Contingent and prospective liabilities of the company, Business Law and Ethics

Contingent and prospective liabilities of the company:

A creditor who petitions on grounds of the company's insolvency may rely on any of the following situations to show (as he is required to do) that the company is unable to pay its debts:

(a)     a creditor (or creditors) to whom the company owes more than one thousand shillings serves on the company at its registered office a written demand for payment and the company neglects, within the ensuing 21 clear days, either to pay the debt or to offer reasonable security for it.  If, however, the company denies on apparently reasonable grounds that it owes the money the court will dismiss the petition and leave the creditor to establish his claim by taking legal proceedings for debt;

(b)     a creditor obtains judgement against the company for debt, attempts to enforce the judgement but is unable to obtain payment, i.e. no assets of the company have been found and seized;

(c)     a creditor satisfies the court that taking account of the contingent and prospective liabilities of the company it is unable to pay its debts.  The petition may be based on a statement of estimated assets and liabilities or the creditor may show that the company is no longer paying its trade debts as they fall due.  But this is the residual category and any suitable evidence of actual or prospective insolvency may be adduced.

Although no minimum amount is specified for (b) or (c) a one thousand shillings minimum is in practice applied (it need not all be owed to one creditor if others support his petition and together they claim Shs.1,000 or more).  The debt claimed must be a specified amount, i.e. a claim for general damages or for a specific sum less a deduction of uncertain amount will not do.

Posted Date: 1/15/2013 4:42:03 AM | Location : United States

Related Discussions:- Contingent and prospective liabilities of the company, Assignment Help, Ask Question on Contingent and prospective liabilities of the company, Get Answer, Expert's Help, Contingent and prospective liabilities of the company Discussions

Write discussion on Contingent and prospective liabilities of the company
Your posts are moderated
Related Questions
Ratification of Corporate Acts: A number of English cases which are regarded as instances of lifting the veil are those relating to informal ratification by the members of act

Objects Clause: Reasons for Stating Objects  Section 5 (1) (c) requires the memorandum of association to state the objects of the company. The section does not however indi

Intent to defraud the Italian creditor: The company owed money to trade creditors and also had outstanding against it a large claim for breach of contract which it disputed (t

do u have this book (richard t degeorge business ethics)

Question 1 What are cybercrimes? Mention in detail what are considered as cybercrimes Question 2 What are Intellectual Property Rights? Explain in detail Question 3 What

Principle of statutory provisions: Most of the cases in which the principle has actually been applied appear to fall within one of the following two classes:- 1. Where the

Q. Show the Suggested actions to address phoenix activity? There have been a range of options identified by previous works on phoenix activity, such as the Cole Inquiry and Tre

Rule in Turquands case: This statement can be reduced to two propositions which constitute what is compositely known as "the rule in Turquand's case", namely:; i. A person

Mode of Reduction: S.68 (1) expressly states that a company may reduce its capital "in any way". There is therefore no statutorily prescribed mode of reduction and the actual

Gist of Lord Buckleys statement: The gist of Lord Buckley's statement, above, may be summarised as follows: The judges will not regard a transaction undertaken by a company as