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
State Article 29 of international law Article 29 states that a member of a diplomatic mission enjoys immunity from arrest or prosecution.

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

Partnership Property Partnership property comprises all property originally brought in the partnership as well like acquired for the purposes of such the firm's businesses. Th

Determine the term - Real Income Effects This linkage between countries takes place through the current account of the balance of payments. It occurs when a change in one count

Former Assistant Treasurer Bill Shorten has cited estimates, based on ATO expertise, that there are 6,000 phoenix operators in Australia. It is recognised that this estimate is a ‘


Question : (a) Show how a party can terminate a forward transaction prior to maturity? (b) Suppose a forward Rate Agreement that: Expires in 30 days Is based on a n

Article 5 - State Responsibilty Article 5. Acts of persons authorized by a state to act on their behalf then the state is responsible for the actions of that person. For exampl

Suppose your employer wanted to include a restraint of trade clause in your employment agreement. Prepare and set out an instance of this clause that would be applicable to you in

Determine the levels of Policy perspective Policy perspective, analysis can be made on three levels, state-system level, the nation-state level and the decision making level. T