Effects of an order for compulsory liquidation, Business Law and Ethics

Effects of an Order for Compulsory Liquidation:

The effects of the order are follows as are:

(a) the Official Receiver (an Official of the High Court whose duties relate mainly to bankruptcy of individuals) becomes provisional liquidator; s.236

(b) the liquidation is deemed to have begun at the time (possibly several months earlier) when the petition was first presented.  If the compulsory liquidation follows voluntary liquidation already in progress (see Southard Case above) liquidation runs from the commencement of the voluntary liquidation: s.226.

(c) any disposition of the company's property and transfer of its shares subsequent to the commencement of liquidation is void unless the court orders otherwise: s.224.

(d) any legal proceedings in progress against the company are halted (and none may thereafter begin) unless the court gives leave.  Any seizure of the company's assets after commencement of liquidation is void: ss.225 and 228.

(e) the employees of the company are automatically dismissed.  The provisional liquidator assumes the powers of management previously held by the directors.

The assets of the company remain the company's legal property but under the liquidator's control unless the court by order vests the assets in the liquidator.  The business of the company may continue but it is the liquidator's duty to continue it with a view only to realisation, e.g. by sale as a going concern.  Any floating charge crystallizes.  Liquidation may invalidate charges and other previous transactions.

Posted Date: 1/15/2013 4:53:51 AM | Location : United States







Related Discussions:- Effects of an order for compulsory liquidation, Assignment Help, Ask Question on Effects of an order for compulsory liquidation, Get Answer, Expert's Help, Effects of an order for compulsory liquidation Discussions

Write discussion on Effects of an order for compulsory liquidation
Your posts are moderated
Related Questions
Explain the Law of the Sea Convention 1982 The Law of the Sea Convention 1982 did not create a new area of law, as laws governing the sea date back to the dawn of maritime his

What is meaning of Relative Price Effects This final linkage occurs when there is free exchange rate between countries, which means the exchange rate is allowed to appreciate o

QUESTION 1 Enumerate and comment upon the number and nature of the grounds on the basis of which a citizen may challenge the decision of a public body. Illustrate your answer w

Question 1: What are the procedures that an employer should follow before he will dismiss a worker for misconduct? Question 2: Section 39 of the Labour Act provides fo

In the paper Action against Fraudulent Phoenix Activity: Proposals Paper, Treasury made a range of recommendations to amend director's liability provisions and taxation law. Rec

state the date on which the act came into force

Explain the second theory of international antitrust cooperation A second theory of international antitrust cooperation is a more limited multilateral approach under which only

What is the Flexible Exchange Rates With a fully flexible exchange rate adjustment toward the long run equilibrium occurs via a change in relative prices. This effect is shown

Mr. Andrew is the Chairman of Board of Directors of Stylish Garments plc. He believes that the success of the business depends mainly on a committed, loyal work force. Therefore th

Arbitration However this is a dispute resolution mechanism whereas disputes are settled out of the court through arbitral tribunals or arbitrators that who make arbitral words