Hello,
In the BPP Practice & Revision Kit there is a question (24 MTQ Bank 6):
"Which of the following parties instigates a creditor's voluntary liquidation?":
the directors
the members
the creditors
the official receiver
I was certain it's the members in both members' voluntary and creditor's voluntary liquidation. Also in their Study text it says: "A creditor's voluntary winding up, where the company is insolvent and the members resolve to wind up in consultation with creditors".
In the answer to the above question BPP says " the directors".
I'm really confused... Could you please explain this to me?
Ask the Tutor ACCA LW
Voluntary Liquidation
Only the directors would have any idea that the company was insolvent so it's the board that will pass their own board resolution to call the members together and present the nasty facts to the members
From then on it's the members that will pass the resolution
But it's the board that will start the ball rolling
OK?
Now that you explained, I think the problem I had was with the verb "instigate". Guess these are nuances I need to pay more attention to and not to automatically assume I know the answer. Thank you
You're welcome, glad that it's a bit clearer
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