Company Law Liquidation
Introduction
Brown brothers Brakes LTD has invested large amount in producing a range of products for supermarkets. The company is facing financial difficulties due to unsuccessful. In that situation director fear the company may now be insolvent. The accountant now wants to understand the issues surrounding insolvency.
According to Brown Bothers current situation it has been recommended to their director to follow the following issues.
Insolvency
A company which is insolvent may be put into liquidation sometimes referred to as winding-up. Insolvency means the inability to pay one 's debts as they fall due. Insolvency refers to the inability of a company to pay off its debts.
Administration
This occurs when a company which is in financial difficulty is put into the hands of an administrator. An administrator is appointed as an officer of the court and an agent of the company by qualified Floating Charge Holder and must act in the interests of all the creditors and attempt to rescue the company as a going concern or more often if they can get a better price for assets than immediate liquidation would give. In general it is a process that happens when company face financial difficulties.
He will be working for companies interest, in order to pay out companies all creditors they can take any decision such as if it is profitable to keep running the company or sell in profitable price and pay to its creditors. An administrator may be appointed by court order issued from court or qualified charge holder and directors of the company. As soon as an administrator has appointed any pending winding-up petitions will be suspended. Enterprise act 2002 came into force 15th September 2003 section 72/A explain prohibition of appointment of administrative receiver. The law emphasise that qualified floating charge holder appoints administrator rather than receiver.
Once an administrator has been appointed must send a notice of his or her appointment to the
Brown brothers Brakes LTD has invested large amount in producing a range of products for supermarkets. The company is facing financial difficulties due to unsuccessful. In that situation director fear the company may now be insolvent. The accountant now wants to understand the issues surrounding insolvency.
According to Brown Bothers current situation it has been recommended to their director to follow the following issues.
Insolvency
A company which is insolvent may be put into liquidation sometimes referred to as winding-up. Insolvency means the inability to pay one 's debts as they fall due. Insolvency refers to the inability of a company to pay off its debts.
Administration
This occurs when a company which is in financial difficulty is put into the hands of an administrator. An administrator is appointed as an officer of the court and an agent of the company by qualified Floating Charge Holder and must act in the interests of all the creditors and attempt to rescue the company as a going concern or more often if they can get a better price for assets than immediate liquidation would give. In general it is a process that happens when company face financial difficulties.
He will be working for companies interest, in order to pay out companies all creditors they can take any decision such as if it is profitable to keep running the company or sell in profitable price and pay to its creditors. An administrator may be appointed by court order issued from court or qualified charge holder and directors of the company. As soon as an administrator has appointed any pending winding-up petitions will be suspended. Enterprise act 2002 came into force 15th September 2003 section 72/A explain prohibition of appointment of administrative receiver. The law emphasise that qualified floating charge holder appoints administrator rather than receiver.
Once an administrator has been appointed must send a notice of his or her appointment to the
Bibliography: An introduction of scots law http://www.companieshouse.gov.uk/about/gbhtml/gpo8s.shtml#ch8 http://www.companieshouse.gov.uk/about/gbhtml/gpo8s.shtml#ch3