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Liquidation and Winding up of Companies Assignment PDF

   

Added on  2021-05-30

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RUNNING Head: Liquidation and Winding up of Companies1Name of the StudentTopic- Corporate Accounting for the LiquidationUniversity Name-

Liquidation and Winding up of Companies2|P a g eTable of ContentsEXECUTIVE SUMMARY...................................................................................................................3EVENTS THAT LED TO LIQUIDATION..........................................................................................3INTRODUCTION.............................................................................................................................3ABC LEARNING..........................................................................................................................4HIH INSURANCE........................................................................................................................4ONE.TEL......................................................................................................................................5ROLE OF ETHICS AND GOVERNANCE..........................................................................................6DOES BAD ETHICS AND GOVERNANCE LEAD TO FINANCIAL STRESS?..........................6Recommendation..................................................................................................................................6LIBILITIES CONTRIBUTING TO LIQUIDATION...........................................................................7Conclusion.............................................................................................................................................7References.............................................................................................................................................9

Liquidation and Winding up of Companies3|P a g eEXECUTIVE SUMMARYThis is a concise description regarding the conclusion of a major corporate theory,liquidation. For the proper understanding of the theory, the real-life examples of bigAustralian Corporate participants, ABC Learning; HIH Insurance; One Tel are, on a one-to-one basis conferred. The starting points of discussion include the events that results into theliquidation of an entity by taking the references from the incidents of prior mentionedcompanies. Further we will discuss about the management practices due to which company’sexistence brought to an end. At the end of the report an interpretation regarding thecontribution of liabilities in the event of wound up is done. EVENTS THAT LED TO LIQUIDATIONINTRODUCTIONLiquidation could be determined as process which is used by the busienssorganizations to take the company to its end and distribute its assets to discharge its corporatelegal liabilities. It is usually done when the company is insolvent; means it cannot pay it isunable to pay its legal debts. As company operations end, the remaining assets are distributedto shareholders and creditors. It is almost similar to the term “winding up”. Liquidation is aninitial stage of ending of a company’s existence and the winding up means to “finish up”.Liquidation is not a one day process. It is a complete series of several events and procedures.The business does not continue to process if it the liquidation process is done. Businesses can liquidate their assets for any number of reasons, but the main tworeasons are the company is failing and restructuring or investors want to leave the business. Itis far more common in bankruptcies and situations where the business is closing because itcan’t support itself with revenues than any other instance. In a bankruptcy, the court generallytakes control of the assets in order to sell them at auction to pay off the outstanding liabilities(Khan, & Williamson, 2016).Liquidation does not arise only after when company is unable to pay its debt. In somemany cases, it arises when company. Apart from that the inadequate working capital, weakfinancial skills, lack of planning, poor marketing and inflexible business model also some ofthe factors which brought the company to an end. Further sometimes the companies are

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