General rules on statute-barred debts, Business Law and Ethics

General rules on statute-barred debts:

A statute-barred debt should be rejected since it is not legally enforceable.  But in a members' voluntary winding up the liquidator may with the consent of all contributories pay such a debt.  The general rules on statute-barred debts are:

(a) in a normal case a debt becomes statute-barred (i.e. the creditor may no longer take legal proceedings to enforce payment) if it remains unpaid for six years and the creditor does not within that time commence legal proceedings to recover it.

(b) the company becomes liable again to pay a statute-barred debt (after six years) if it issues to the creditor a written acknowledgement of its indebtedness.

The liquidator must also consider whether any debts of the company arise from contracts which are ultra vires or ultra vires the company but made by the directors without authority.  The liquidator must according to his judgement of the legal position either.

(a) reject the creditor's claim as invalid if that is possible, or

(b) consider claiming compensation from the directors who made the unauthorized contract on the grounds of their misfeasance under s.323.

Posted Date: 1/15/2013 5:19:49 AM | Location : United States







Related Discussions:- General rules on statute-barred debts, Assignment Help, Ask Question on General rules on statute-barred debts, Get Answer, Expert's Help, General rules on statute-barred debts Discussions

Write discussion on General rules on statute-barred debts
Your posts are moderated
Related Questions
Removal:             Article 107 provides that the managing director's "appointment shall be automatically determined if he cease from any cause to be a director". However it

QUESTION 1 (a) What are the various alternatives that exist to settle a dispute besides going to court (b) What are their respective advantages and disadvantages QUESTIO

This activity brings together the ethical issues, concepts, and statutes presented in your readings, lectures, and discussed in your chat sessions. You will select two (2) scenario

QUESTION 1 Arbitration has proved itself to be a valuable scheme in alternative dispute resolution of conflicts. Discuss the advantages and disadvantages of Arbitration as a su

15 cases under sale of goods act within the year 2000- 2016?

Explain about the tort of negligence. A form of civil wrong where a contract doesn’t exist among the two parties and this is not a crime where punishment is the major goal to t

UNSECURED ORDINARY DEBTS: A secured creditor obtains payment (to the extent that his security is adequate i.e. if it exceeds in value the amount owing to him) because he has a

Types of Agents - Agency Law Although broadly agents are either special or might be general depending on the scope of authority.  Subsequently an agent engaged to carry a task

Question 1: (a) Describe about a Trade Union. (b) Show the objectives of the Trade Union in the Republic of Mauritius. Justify your answer. (c) If you were nominated as

Separate meetings of each group - mergers and winding up: The first ground of objection was valid, ie. if within a single class of shareholders there are groups whose inte