Avoidance of floating charges, Business Law and Ethics

Assignment Help:

Avoidance of Floating Charges:

Under s.314 liquidation automatically renders void any floating charge created within the period of 12 months before commencement of liquidation subject to the following exceptions:

(a) valid if the company was solvent at the time when the charge was created.  A company is not solvent unless it can pay its debts in full as they fall due;

(b) if the company was not solvent the floating charge is still valid as security for cash paid to the company (with interest at six per cent per annum) after the charge was created and in consideration of the loan.

The general purpose of the rule is to prevent an unsecured creditor of an insolvent company from getting advantage over other creditors by obtaining a floating charge to secure an existing debt at a time when the company is heading towards insolvent liquidation.  It is only the charge (as security) not the debt itself which becomes void.


Related Discussions:- Avoidance of floating charges

What is the meaning of ethics in the corporate environment, QUESTION 1 ...

QUESTION 1 (a) Why is it that businesses are increasingly exposed to scrutiny and criticisms? (b) Discuss four strategies which can be adopted to respond to these criticisms

What is udhr, What is UDHR UDHR is therefore, considered as a source of...

What is UDHR UDHR is therefore, considered as a source of international law relating to human rights. Apart from UNGA-responsible for issuing resolutions, the decisions of the

Explain abraham maslow''s hierarchy of needs, Question 1 Mention any ten r...

Question 1 Mention any ten recommendations made by the Honey report Question 2 Explain the following Staff and line Span of Control Question 3 Explain A

Presentment for acceptance - rules relating to acceptance, Presentment for ...

Presentment for Acceptance - Rules Relating To Acceptance Even though a bill must be presented to with acceptance and be accepted through the drawee in order to render him lia

What are the key elements of a conflict, Question: (i) Define the te...

Question: (i) Define the term "conflict", "grievance" and "dispute" (ii) What are the key elements of a conflict? (iii) Describe the transformation process of a

Third party logistics and distribution facilities, Question 1: Analyze ...

Question 1: Analyze the contribution and role of logistics in the provision of good customer service. Question 2: Discuss the case for and against using in-house or t

Explain about the codified systems, Explain about the codified systems. ...

Explain about the codified systems. Codified (civil law) systems: It is a rule based approach to law making and it is designed to give a comprehensive code of laws for th

Determine in detail about the credibility factor, Determine in detail about...

Determine in detail about the credibility factor Let us consider, 'credibility' factor. The law, institutions and other created authorities lead to circumstances that can assur

What are the consensus in the political stream, What are the Consensus in t...

What are the Consensus in the political stream Political events move along at their own pace, and according to their own dynamics and rules. Developments in the political sphe

Give five differences between law and ethics, QUESTION (a) In scientifi...

QUESTION (a) In scientific ethics, list four fundamental principles of scientific research? (b) Give five differences between law and ethics (c) When does a ‘Conflict of

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd