External Administrator and Fundraising | Company Law Assignment

Added on - 21 Apr 2020

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Running head: COMPANY LAWExternal Administrator and FundraisingName of the student:Name of the university:Author note
1COMPANY LAWProblem question: External AdministrationThe provision of the External Administration is an important term in theCorporation Act. Sometimes it has been observed that the company has failed to pay themoney to the shareholders or unable to meet the debts. This position can be described as thefinancial difficulties (Clarke and Philip 2017). This situation will lead the company towardsinsolvency or liquidation. External administrators are appointed to assess the assets of thecompany. The Corporation Act 2001 regulates the provision of the external administration.External administration can be divided into three parts- administration, receivership andliquidation. Creditors are getting involved in case of external administration.There are two types of external administration such as the voluntaryadministration and the involuntary administration. Voluntary administration takes place whenthe director of the company by himself opted for appointed administrator. When the otherauthority appoints administrator, it will be treated as involuntary administrators. Externaladministrators are appointed when a company become insolvent or failed to pay the debt toits shareholders (Head and Brian 2014). The main objective of this mechanism is to trade thecompany out of the trouble. However, if the administrators could not remove the trouble, theadministrator regarding the immediate liquidation will make an attempt.In the present case, it has been observed that the company named Coco PtyLtd had failed to repay all the debts and it has been observed that the company had failed topay the bills also. The cash flows of the company have also compelled to increase due to thenon-payment of the money. Another problem regarding the company has been cropped upwhen the employees of the company has been started agitation for the hike of payment. It hasalso been observed that East bank Ltd had threatened to appoint receiver to tackle theproblem if the company continues to non-repayment of debts and the monthly interest of the
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