- 1 Marks
BCL – L1 – SA – Q14 – Legal Implications of Companies in Crisis
Question
What is the purpose of bankruptcy proceedings?
A Punishing company directors
B Liquidating company assets to pay creditors
C Reducing company taxes
D Transferring ownership to employees
Answer
B
Explanation:
Bankruptcy proceedings aim to liquidate a company’s assets to pay creditors in an orderly manner. They do not punish directors (A), reduce taxes (C), or transfer ownership (D). Option B is correct.
- Tags: Asset Liquidation, Bankruptcy, Creditors
- Level: Level 1
- Uploader: Samuel Duah