Which of the following statements is not an accurate proposition relating to the receivership of a company?
Receivership involves appointing a person to sell or collect any income arising from the assets subject to the charge in order to satisfy the outstanding debt owed to the creditor
A receiver is a person appointed to manage the assets that are subject to a fixed charge while an administrative receiver acts as a manager of all or substantially all the assets that are subject to a floating charge
Which of the following is a correct proposition relating to the administration of a company?
An administrator can be appointed out of court?
An administrator is not required to be a qualified insolvency practitioner
Administration and liquidation can occur at the same time.
The primary purpose of administration is for the administrator to realise property to make a distribution to one or more secured or preferential creditors
In Attorney General v Lindi St Claire (Personal Services) Ltd (1980), the court ordered a company’s registration to be cancelled as the company’s objects were immoral and contrary to public policy
True
False
Alex, a former director of Apex Ltd, which is in liquidation, has been considered by the liquidator of the company, to have been responsible for the company’s insolvency. What action under the Insolvency Act 1986 could be taken against him?
None
Proceedings based on fraudulent or wrongful trading
Disqualification proceedings
Charges of theft.
In the same case, Alex is worried that action could be taken against him under the Company Directors Disqualification Act 1986. What type of conduct contained within the CDDA 1986 is this case likely to cover?
Persistent failure to comply with the administrative requirements of the Companies Act 1986
Unfitness in the management of a company
Theft of the company’s assets
Committing an indictable offence in connection with the liquidation of the company
Which of the following is not a true statement relating to the nature and scope of fraudulent trading as contained in s 213 IA 1986?
In the course of the winding up, it appears that any business of the company has been carried on with intent to defraud creditors of the company or for any fraudulent purpose.
The liquidator can apply to the court for a declaration that any persons who were knowingly parties to the carrying on of the business in this way be liable to make such contributions to the company's assets as the court thinks proper.
Fraudulent trading means conduct that is deliberately and actually dishonest according to the notions of ordinary decent business people.
Only directors or officers of the company can have action taken against them
Which of the following is not a true statement relating to the nature and scope of wrongful trading contained in s 214 IA 1986?
Wrongful trading is easier to establish than fraudulent trading under s 213 IA 1986.
Wrongful trading is defined as where a director or shadow director of the company who, at some time before the commencement of the winding up of the company, knew or ought reasonably have known that the there was no reasonable prospect that the company would avoid going into insolvent liquidation.
The court will not make a finding of liability where it is satisfied that the director concerned took every step that he ought to have taken with a view to minimising the loss to the creditors.
The court is not required to take into account the director’s own knowledge, skill and experience.
Which of the following does not represent a feature of ss 216 & 217 IA 1986 dealing with the problem of so-called ‘phoenix companies’?
S 216 IA prevents generally a director of an insolvent company within twelve months of liquidation from being a director of another company which uses the same name as the insolvent company.
Creditors can enforce either section
Infringing s 216 IA 1986 constitutes a criminal offence
Under s 217 IA 1986, a director is liable for the debts of the second company during the period for which the director managed it.
Which section of the Insolvency Act 1986 contains a general rule that floating charges are void if they are created within twelve months of the onset of insolvency?
S 245 IA 1986
S 345 IA 1986
S 127 IA 1986
S 238 IA 1986
Which of the following statements represents a change introduced by the Enterprise Act 2002?
HM Revenue and Customs can no longer petition for a winding up of a company
The Crown loses its rights as a preferential creditor
An administrator can be appointed by any floating charge holder