Company and Corporation Law Assignment PDF
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Added on 2021-06-17
Company and Corporation Law Assignment PDF
Added on 2021-06-17
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Running Head: COMPANY AND CORPORATION LAWCOMPANY AND CORPORATION LAWName of the Student:Name of the University:Author Note
1COMPANY AND CORPORATION LAWIssue 1:The first issue that exist in the given scenario are:To determine what actions can be taken by the administrators appointed by RaviRule:For the purpose of analyzing the first issue that has been identified in this given scenario, it isimportant todiscuss the relevant provisions of the Corporations Act that are relevant in thisscenario. It has been provided in section 436DA(2) of the Corporations Act 2001 (Cth) that anadministrator who is duly appointed by the provisions as provided in section 436A, 436B or 436C is required to make declarations about the indemnities and the relationships owed to or by thecompany1. The administrator is required to give a notice to the creditors of the company fivedays prior to holding the meeting (Yogaratna and Xynas 2017). For the purpose of assessingwhether the company is insolvent the administrator must refer to section 95a of the CorporationsAct2. It has been specifically provided in the section that a person can be considered to beinsolent, if such person fails to pay all the debts acquired by such person at the time when theybecome due. It can be stated in accordance with section 435 A of the CA that an administrator ofa business can manage the property and affairs of a company:In a way which give maximum chances to the company for continuing its existenceIn a way which will eventually result in the immediate winding up of the company, if itis found that such winding up of the company would create better return for thecredtors of the company3. 1Corporations Act 2001 (Cth) s 436DA(2)2Corporations Act 2001 (Cth) s 95a3Corporations Act 2001 (Cth) s 435
2COMPANY AND CORPORATION LAWIt has been provided in section 436E that administrators of companies are required to holdmeetings of creditors and the purpose and time of conducting such meetings have been clearlyillustrated in the aforementioned section. In accordance with this section it can be stated that thepurpose of holding a meeting of the creditors is determine whether a committee needs to beappointed for the inspection of the debts owed by the company to the creditors. The time periodof holding the meeting has been specified to be eight days since the appointment of suchdirector. Further in relation to section 439 A it can be stated that a company administrator mustconvene a meeting with the creditors of a company during the time period when the company isin administration within the convening period as provided in subsection 5 of the aforementionedact. It can be stated that the meeting with the creditors must be held within 5 days after the end ofthe convening period. Finally it has been provided in section 438A(a) that once a company enters into administration,the administrator of the business is required to investigate the operations of the company, theproperty of the company and its financial position. It has been further provided in subsection438A(b) of the aforementioned actthat an administrator is required to make a decision in regardsto governance of the business by assessing the following options4:to execute a deed of arrangement(DOCA) by assessing whether it would be in the bestinterest of the creditors of the companyto end the process of administration if it is found to be in the best interest of thecreditorsTo liquidate and wind up the company if it is found in the best interest of the creditors.Application4Corporations Act 2001 (Cth) s438
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