Ambiguous Concepts Of Insolvency Between Temporary Lack Of...

1. Ambiguous concepts of insolvency between temporary lack of liquidity S588G impose a duty on directors stop a company trading while it is insolvent or would become insolvent. The provision requires directors take any reasonable steps to prevent incurring debts and maintain the maximum abilities to pay the present creditors or protect future creditors. The ultimately objective is to protect the creditors. According to S588G, as long as the directors suspect that the company is insolvent or would become insolvent and fail to prevent a company from insolvent trading, he or she would potentially personal liable for all the debts incurred since insolvency. Under S95A, A company is insolvent if it is unable to pay all its debts when they become due for payment (Hanrahan, 2015). It is difficult for directors to figure out whether the company is temporary lack of liquidity or insolvent. Furthermore, the uncertain local and global economic conditions would make them feel hesitant about whether the decision they make will save the company not. This provision put significantly personal liabilities on directors’ shoulder. Directors special without company share directors would rather to simply give up saving the company by winding up or appointing an administrator than put their personal wealth on risk even though there is a chance to rescue it. One of the objective of appointing an voluntary administration is to put a company into a temporary† safety zone† from its creditors andShow MoreRelatedBanking Concepts and Practices39548 Words   |  159 PagesXITE, Gamharia Banking Concepts Practice [Paper 11: Elective II, Academic Session 2011-12] 1. Evolution of Banking: Bank-Meaning, Definition, Features Classification, Concept of Different Types of Banking System, Overview of Indian Banking System 2. Commercial Bank: Basic Concept of Commercial bank, Role of Commercial bank in Financial System, Credit Control by Central Bank 3. Central Bank: Meaning, Functions, Methods of Credit Control 4. Monetary Policy: Meaning, ObjectivesRead MoreCorporation (Fisch) Outline Penn Law Essay62808 Words   |  252 PagesTable of Contents I.) INTRODUCTORY PRINCIPLES 2 A.) Efficiency and Other Concepts 2 B.) Agency and Partnership Law 2 II.) INTRODUCTION TO THE CORPORATE FORM 16 A.) Formation and Structure 16 B.) Debt, Equity, and Valuation 22 III.) CONTROL OF CORPORATE DECISIONS 32 A.) The Role of the Shareholder 32 B.) Management Obligations 50 1.) Duty of Care 51 2.) Duty of Loyalty 56 3.) Duty of Fairness: Parent-Subsidiary Relationships 63 4.) Duty of Good Faith 64 5.) Management ObligationsRead MoreTestbook Answers112756 Words   |  452 Pagesaspect of dividend irrelevancy--given a dividend policy, the value of the firm is the same whether it is based on dividends or cash flows. A related illustration is given in the outline of clean surplus theory in Section 6.5.1. The only difference between that illustration and this question is that here valuation is as at time 0, whereas in Section 6.5.1 valuation is as at time 1. Copyright  © 2012 Pearson Canada Inc 17 Scott, Financial Accounting Theory, 6th Edition Instructor’s Manual Read MoreManagement Course: Mba−10 General Management215330 Words   |  862 PagesManagement, Fourth Edition I. Management 17 17 2. The Evolution of Management Thought Hughes−Ginnett−Curphy †¢ Leadership, Fifth Edition I. Leadership is a Process, Not a Position 51 51 70 1. Leadership is Everyone’s Business 2. Interaction between the Leader, the Followers the Situation Cohen †¢ Effective Behavior in Organizations, Seventh Edition 11. Leadership: Exerting Influence and Power 94 94 Text Palmer−Dunford−Akin †¢ Managing Organizational Change 2. Images of Managing Change Read MoreCorporate Finance174197 Words   |  697 PagesEnd of Chapter Solutions Corporate Finance 8th edition Ross, Westerfield, and Jaffe Updated 11-21-2006 CHAPTER 1 INTRODUCTION TO CORPORATE FINANCE Answers to Concept Questions 1. In the corporate form of ownership, the shareholders are the owners of the firm. The shareholders elect the directors of the corporation, who in turn appoint the firm’s management. This separation of ownership from control in the corporate form of organization is what causes agency problems to exist. Management may