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
1. Tort reform refers to proposed changes in the civil system that would reduce tort litigation or damages. Proposals include, among other things,putting a cap on the amount a plai

INTERNATIONAL TRADE LAWS The laws controlling and regulating International trade have become one of the fastest growing areas of international law. International trade laws conce

MEANING OF "OPPRESSION":                    The Section does not define the word "oppression" or what constitutes "oppressive conduct".  However, the Cohen Committee's Report

a) Explain two scenarios in which a restraint of trade clause would typically be used. b) Suppose your employer wanted to include a restraint of trade clause in your employment

Explain the right of self determination The right of self determination amounts to an exception in the sense that when fighting for self determination, the state can render as

Q. Legislative options for addressing phoenix activity? There are a range of legislative options for addressing phoenix activity and the following legislative options were expl

State in brief about the term - Nash equilibrium For the foreign country its reaction function cuts its indifference curves where they are vertical. Both these reaction functio

What are the Stages in Policy Process The traditional textbook approach to the study of public policy separates policy making into its component steps and analyzes each in turn.

State about the underlying process - Law institutions The underlying process forms the basis of our next subtitle. The first point is, that if an optimal policy has been adopt

What is the use of reprisal the use of reprisal should also be categorized under the heading of the lawful use of force. It is defined as a counter action taken by a state to p