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LIQUIDATION

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

  • This topic has 5 replies, 2 voices, and was last updated 7 months ago by MikeLittle.
Viewing 6 posts - 1 through 6 (of 6 total)
  • Author
    Posts
  • June 27, 2022 at 9:22 pm #659456
    Eunice03
    Participant
    • Topics: 70
    • Replies: 61
    • ☆☆

    (a) Which of the following parties instigates a creditors’ voluntary liquidation?
    ? The directors
    ? The members
    ? The creditors
    ? The official receiver
    ANS- Directors

    26.1 Which of the following parties applies for a company to be liquidated in a creditors’ voluntary liquidation?
    ? The creditors
    ? The members
    ? The directors

    ANS- A

    Good day sir,I don’t understand why these questions have 2 different answers.I’ll appreciate if you can explain the difference between the questions.Thank you

    June 28, 2022 at 9:16 am #659476
    MikeLittle
    Keymaster
    • Topics: 26
    • Replies: 22705
    • ☆☆☆☆☆

    Eunice, I’m going to wriggle here! When a creditor has been asking for payment and none is forthcoming, that creditor may, with or without other creditors, ask that the directors commence the procedure to put the company into liquidation (I don’t like this!)

    So that would be my answer to the second question above

    Following that request from the creditors, it is then incumbent upon the directors to commence that procedure (if they are satisfied that the company cannot continue by reason of its debts) and it’s the directors that will then put in motion the steps necessary for preparing a statement of affairs and the calling of the meeting of members (first) followed by the meeting of creditors

    And that should answer your first question above

    But that second question is awful! Are you sure that you haven’t mistyped it?

    OK?

    June 28, 2022 at 4:06 pm #659492
    Eunice03
    Participant
    • Topics: 70
    • Replies: 61
    • ☆☆

    I mistyped the answer for the second one but the question is correct.The right answer is members.

    June 29, 2022 at 10:04 pm #659525
    MikeLittle
    Keymaster
    • Topics: 26
    • Replies: 22705
    • ☆☆☆☆☆

    Oh Eunice! I am so pleased that you mistyped the question 🙂

    I presume that I have now satisfactorily answered both parts of your post.

    If not, post again

    June 30, 2022 at 11:39 pm #659698
    Eunice03
    Participant
    • Topics: 70
    • Replies: 61
    • ☆☆

    It was the answer of the second question i mistyped, not the question. The question is correct but the answer is members. I understand the first question now but the second one is still not clear

    July 1, 2022 at 5:49 am #659705
    MikeLittle
    Keymaster
    • Topics: 26
    • Replies: 22705
    • ☆☆☆☆☆

    OK, I believe that the key to this question is the word ‘applies’ as in ‘applies for a company to be liquidated in a creditors’ voluntary liquidation?’

    The creditors will make the noise, the directors will respond. But it’s the members that pass the resolution to put the company into liquidation. The first inkling that the Registrar of Companies has that the company is in trouble is when a copy of that resolution is delivered to the Registrar.

    So, in that respect, yes it’s the members that apply to the Registrar to record the resolution putting the company into liquidation

    Better?

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