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
Directors' Remuneration: For technical reasons the directors are not regarded as servants or employees of the company of that they are directors. Therefore  here they have no

Liability by Estoppel Anyone who presents himself or permits himself for be represented, further by words, conduct or writing as the partner about another person like  persons

Legislature-Executive Trade off Let us move a bit closer to the reality. In standard modes of policy optimization we assure that there is a single policy maker, who controls th

Terms used in Contract However there are certain terms may identify conditions and warranties like are implied into every contract covered through the Sale of Goods Act where

Describe the principal-agent framework In standard principal-agent framework an agent may be directed to maximize an objective function which may or may not be different from

Both Sudan and the US are signatories to the "New York Convention."  A Sudanese company has won its case in a Sudanese arbitration panel.  The U.S. company has declined to pay this

Form of reconstruction: Where one company transfers its undertaking (and assets) to another company in exchange for shares to be alloted direct or distributed to the members o

State the third approach to antitrust agency A third approach to antitrust agency interaction is the bilateral cooperation and coordination theory. This model for how an agency

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