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LIQUIDATION

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA LW Exams › LIQUIDATION

  • This topic has 3 replies, 2 voices, and was last updated 3 years ago by MikeLittle.
Viewing 4 posts - 1 through 4 (of 4 total)
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    Posts
  • June 21, 2022 at 5:42 pm #659071
    Eunice03
    Participant
    • Topics: 88
    • Replies: 70
    • ☆☆

    257) When a company goes into a creditors’ voluntary winding up, who appoints the liquidator?
    A Members
    B Creditors
    C Directors

    ANS-A

    Good day sir,This answer is confusing to me because the textbook states that both the members and the creditors have the right to appoint a named insolvency practitioner as liquidator. In the event of a dispute, the creditors’ nominee prevails.I’ll appreciate if you can explain better

    June 21, 2022 at 9:08 pm #659082
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23321
    • ☆☆☆☆☆

    Where the directors have realised that the company is no longer able to continue by reason of its debts, they must convene a meeting of members – the purpose of that meeting is to pass a resolution formally to put the company into liquidation. Additionally, the members will NOMINATE the person that they would like to conduct the liquidation process

    Typically on the same day (actually, typically half an hour after the members meeting) a meeting of creditors will take place. The directors will tell the creditors that the company has been placed into a voluntary liquidation by the members passing a resolution and that the members have nominated a person the the members would like to see conducting the liquidation process

    And then! The directors say to the assembled creditors ” …unless, of course, you would like to nominate and appoint someone other than the members choice”

    If the creditors choose not to exercise their right to nominate someone other than the members choice, then we can see that the members have nominated the person and the creditors, by their inaction, have accepted the members nominee

    BUT! If the creditors choose to reject the members nominee and appoint someone different, then clearly it’s the creditors that will appoint their own choice to conduct the exercise

    I believe that that should clear up the fog in your mind 🙂

    June 22, 2022 at 6:49 pm #659142
    Eunice03
    Participant
    • Topics: 88
    • Replies: 70
    • ☆☆

    Thank you sir

    June 23, 2022 at 8:17 am #659189
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23321
    • ☆☆☆☆☆

    Again, you’re very welcome

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