PDF Business Laws - Sample Assignment
Added on 2021-06-14
9 Pages1712 Words18 Views
Running head: BUSINESS LAWSBusiness LawsName of the studentName of the universityAuthor note
1BUSINESS LAWSIssue 1The first issue in this situation is to analyze the options which the administrator has will havewith respect to Small Pty Ltd. The issue is also to analyze whether the company has to beliquidated. Rule Provisions in relation to solvency and insolvency have been provided though the provisions ofsection 95A of the Corporation Act 2001 (Cth)1 that a person is held to be solvent where they areable to satisfy all debts when they become payable and due. A person who cannot do this is aninsolvent person. Powers have been provided to a secured party to appoint a creditor under the provisions ofsection 436C of the CA. under this section a person having a security interest may appoint anadministrator by written application if the security interest is enforceable2. It is the duty of an administrator under the provisions of section 439A of the CA to inform thecreditors about its appointment and convene meetings within the convening period3. Provisions on relation to the options available to the administrator are provided through theprovisions of section 438A of the Corporation Act 2001 (Cth)4. It has been provided through thesection that the as soon as the company goes into administration the administrator has toinvestigate the business, financial situation and property of the company. He has to formulate anopinion in relation to whether a deed of company arrangements would be required to be executed1 Corporation Act 2001 (Cth) s 95A2 Corporation Act 2001 (Cth) s 436C3 Corporation Act 2001 (Cth) s 439A4 Corporation Act 2001 (Cth) s 438A
2BUSINESS LAWSin the best interest of the creditors, whether bringing the administration period to an end wouldbe in the interest of the creditor and whether the being wound up would be in the best interest ofthe company. It has been provided through the provisions of section 435 of the CA that the administration ofthe affairs, business and property of a company has to be done in a way which enhances thechances of the organization to continue its existence, and if such situation is not possible then towound up the company5. Application It has been identified by going through the situation in which Small Pty Ltd is that the companyhas a debt of total $210000 and the total assets of the company is of $95000. Thus through theapplication of the provisions of section 95A it can be stated that the company is insolvent as it isnot able to pay the bets which have become payable and due. Under the provisions of section 436C of the CA, Ravi who is also a secured creditor of thecompany has the power to appoint an administrator by written application and the appointmentof a administrator is therefore valid. Further under the provisions of section 439A of the CA it is the duty of the appointedadministrator to inform the creditors about the appointment and convene meetings within theconvening period. The primary options which will be available to the administrator are those which are available insection 438A of the CA. as per the section the administrator will have the option of decidingwhether a deed of company arrangements would be required to be executed in the best interest of5 Corporation Act 2001 (Cth) s 435
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