Disadvantage of a scheme of arrangement, Business Law and Ethics

Disadvantage of a scheme of arrangement:

The disadvantage of a scheme of arrangement is that it requires the preparation of elaborate documents and the observance of a strict procedure, including an initial and final application to the court and the holding of meetings.  All this is expensive.  Hence a scheme of arrangement is only suitable for large companies where substantial values or assets are affected.  Otherwise it is uneconomical.

 If a company which is or is about to be in voluntary liquidation proposes to make a composition with its creditors it has a choice between the following alternatives:

(a) a scheme of arrangement under s.207;

(b) an arrangement sanctioned by three quarters (in number and in value) of the creditors under CA: s.300.  This liquidation procedure is binding on a minority unless the court on the application of a creditor or contributory (member) orders otherwise;

(c) a compromise made by the liquidator in exercise of statutory powers under CA, s.241 or s.297(1)(a).  For this purpose he must obtain approval of members, creditors, committee of inspection or the court according to the circumstances of the case.

Posted Date: 1/15/2013 4:14:40 AM | Location : United States







Related Discussions:- Disadvantage of a scheme of arrangement, Assignment Help, Ask Question on Disadvantage of a scheme of arrangement, Get Answer, Expert's Help, Disadvantage of a scheme of arrangement Discussions

Write discussion on Disadvantage of a scheme of arrangement
Your posts are moderated
Related Questions
Do a comprehensive outline and a research paper. A well-organized and thoughtful 3-5 page Research Paper in APA format. The impact and use of technology in policing and the cour

DIVIDENDS: As a commercial term, the word "dividends" has a variable meaning which depends on the context in which it is used. For purposes of company law, it denotes the paym

Common law systems such as that in the United States rely on prior decisions as a principal source for determining cases as they arise. a) What are the five ways that precedents

Forms of action: A minority of shareholders or an individual shareholder suing under one of the above exceptions may institute one of the following actions i) A personal ac

Avoidance of Floating Charges: Under s.314 liquidation automatically renders void any floating charge created within the period of 12 months before commencement of liquidation

The second factor which is necessary for a claimant to impose claim on other person is to have a cause for the action taken by him. Hence it is important to have a proper link betw

Question 1: Should the Judicial Committee of the Privy Council be maintained at the summit of the hierarchy of our judicial system? Critically discuss on the above. Ques

Question 1: (a) Discuss the powers and duties of the employer under the Employment Rights Act 2008? (b) Discuss the powers and duties of the worker under the Employme

Description of terrorism UNSC has successfully come up with laws to deal with terrorism and with the help of the theory of self determination, use of force and IHL, tried to re

Casual Appointments:  Article 95 permits the board of directors to fill a vacancy in the board or to get an additional director to join the board for practical reasons provide