members

Members of a company? By statutory definition, a person is a member of a company when that person's name is entered into the register of members Now here's a fascinating matter! The expression 'member of a company' is frequently taken to be synonymous with the expression a 'shareholder in a company' and for our / your / ACCA purposes, that's an acceptable 'though incorrect attitude But technically it's a possibility that a person may be a member but not a shareholder in a company and, equally, it's possible to be a shareholder but not a member of the company But don't you worry about that! Take the two expressions as being synonymous 'Directors, secretary and auditors'? Typically directors of a company will hold shares in the company but it's not a requirement. The company secretary may very well hold share in a company but, again, it's not a requirement But auditors are forbidden by professional rules from holding shares in any company that is audited by that audit firm Liquidations? There's a whole chapter on the subject in the course notes as well as the related lectures. It's too big a topic for me to type out a complete answer to your post.- can you reduce it to specific queries? OK?

Please say whether these statements are correct or not? 1) Compulsory liquidation is initiated by the members (shareholders) of the company to be passed by special resolution (>75%) BUT could you please explain the reason behind this liquidation? 2) Voluntary members liquidation is initiated by the members of the company to be passed by special resolution when the company is able to pay its debt in the future but members voluntary prefer to liquidate. 3) Voluntary creditors liquidation is initiated by the creditors of the company to be passed by special resolution when the company is unable to pay its debt in the future so the debtors to get their money back.

"1) Compulsory liquidation is initiated by the members (shareholders) of the company to be passed by special resolution (>75%) BUT could you please explain the reason behind this liquidation?" This has to be an unusual one - why ask the Court by passing a special resolution when you could put the company into voluntary liquidation by the same type of resolution? That's one I've never understood "2) Voluntary members liquidation is initiated by the members of the company to be passed by special resolution when the company is able to pay its debt in the future but members voluntary prefer to liquidate" -- I'm happy with that "3) Voluntary creditors liquidation is initiated by the creditors of the company to be passed by special resolution when the company is unable to pay its debt in the future so the debtors to get their money back." No, it's initiated by the directors. They call a meeting of the members who pass the resolution and nominate a provisional liquidator. That meeting is very closely followed by a meeting of the creditors who are told about the members' decision and it's the creditors that appoint a liquidator. Note, the members nominate but it's the creditors that appoint Be careful here "so the debtors to get their money back" It's the creditors of the company that are looking to receive the money, not the debtors Is that any better for you?