Insolvency – Page 3

AAA – Nov 2012 – L3 – AII – Q12 – Auditor’s Legal Liability

Identifies the type of creditors given priority in payment during a liquidation process.

Question

The creditors given priority payment during a liquidation process are known as …………………. creditors.

Answer

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Tags: Creditors, Insolvency, Legal Liability, Liquidation, Priority Payment
Level: Level 3

Topic: Auditor’s Legal Liability
Series: NOV 2012

AAA – Nov 2012 – L3 – SA – Q18 – Auditor’s Legal Liability

Identifying debtor categories exempt from bankruptcy declaration under Nigerian law.

Question

The following categories of debtors may be declared bankrupt (according to Bankruptcy Law in Nigeria) EXCEPT:

A. A debtor owing a liquidated sum of at least N2,000 (Two Thousand Naira only).
B. A debtor who has committed an act of bankruptcy within 3 months before presentation of bankruptcy petition.
C. Any debtor domiciled in Nigeria or who has carried on business in Nigeria by means of an agent or a manager.
D. A debtor that makes any conveyance or transfer of his property or any part thereof if he were adjudged bankrupt.
E. A debtor who transacts business in Nigeria and is able to meet his obligation as at when they fall due.

Answer

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Tags: Bankruptcy Law, Debtors, Insolvency, Legal Liability, Nigeria Law
Level: Level 3

Topic: Auditor’s Legal Liability
Series: NOV 2012

AAA – Nov 2011 – L3 – SAII – Q17 – Review of Subsequent Events and Going Concern Assumptions

Definition of a company's inability to meet financial obligations on time.

Question

The inability of a company to meet its financial obligations as and when due is called……………..

Answer

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Tags: Company Obligations, Financial obligations, Insolvency, Liquidity
Level: Level 3

Topic: Review of Subsequent Events and Going Concern Assumptions
Series: NOV 2011

BL – Nov 2020 – L1 – SB – Q2c – Company Law

Differentiate insolvency from bankruptcy and outline consequences of insolvency.

Question

Insolvency occurs when a company is unable to pay its debts.

Required:
i. Distinguish insolvency from bankruptcy.
ii. Explain briefly the consequences of insolvency on a company.

Answer

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Tags: Bankruptcy, Corporate Consequences, Financial Distress, Insolvency
Level: Level 1

Topic: Company Law
Series: NOV 2020

BL – Nov 2020 – L1 – SA – Q5 – Company Law

Objective question testing knowledge on company financial status related to solvency.

Question

5. A company whose liabilities exceed its assets is said to be
A. Buoyant
B. Broke
C. Rich
D. Insolvent
E. Pauperised

Answer

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Tags: Company Liabilities, Financial Terms, Insolvency, Solvency
Level: Level 1

Topic: Company Law
Series: NOV 2020

BL – May 2013 – L1 – SA – Q20 – Law of Trusts

This question tests knowledge of which entities cannot be declared bankrupt.

Question

Which of the following CANNOT be made a bankrupt?

A. A company
B. A Nigerian
C. A partnership
D. A foreigner who lives in Nigeria
E. A foreigner who has a place of business in Nigeria

Answer

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Tags: Bankruptcy, Insolvency, Legal Status
Level: Level 1

Topic: Law of Trusts
Series: MAY 2013

BL – May 2013 – L1 – SA – Q11 – Law Relating to Banking

This question tests the knowledge of the official responsible for administering a debtor's estate in bankruptcy.

Question

The person charged with the duty of administering a debtor’s estate in a bankruptcy proceeding is known as the:

A. Liquidator
B. Official Receiver
C. Registrar of the Supreme Court
D. Auctioneer
E. Executor

Answer

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Tags: Bankruptcy, Insolvency, Official Receiver
Level: Level 1

Topic: Law Relating to Banking
Series: MAY 2013

BL – May 2014 – L1 – SA – Q19 – Law Relating to Banking

Identifying the term for a bankruptcy petition against a common debtor.

Question

Bankruptcy petition by a group of creditors who acts together against a common debtor who is known to be insolvent is a ____________.

Answer

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Tags: Bankruptcy, Creditors, Insolvency
Level: Level 1

Topic: Law Relating to Banking
Series: MAY 2014

BL – May 2014 – L1 – SA – Q12 – Company Law

Identifying what is not a ground for winding up a company.

Question

Which of the following is NOT a ground for winding up of a company?
A. Fraudulent trading
B. Resolution by members to wind up
C. Reduction of membership below minimum number
D. Court Order
E. Possibility of abuse of limited liability system

Answer

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Tags: Grounds for Winding Up, Insolvency, Winding-up
Level: Level 1

Topic: Company Law
Series: MAY 2014

BL – Nov 2013 – L1 – SB – Q6b – Agency Law

Stating three acts of bankruptcy for which proceedings may be instituted.

Question

A debtor who could not pay his debts or meet his legal financial obligations may be insolvent.

You are required to:
State THREE acts of bankruptcy for which bankruptcy proceedings may be instituted against a debtor.

Answer

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Tags: Bankruptcy, Insolvency, Legal Financial Obligations
Level: Level 1

Topic: Agency Law
Series: NOV 2013

BL – May 2017 – L1 – SA – Q6 – Company Law

Identifying non-inclusion in the tests for insolvency under Companies and Allied Matters Act.

Question

Under the Companies and Allied Matters Act, the tests for insolvency do NOT include
A. Inability of a company to pay a debt exceeding ₦2,000 three weeks after demand
B. The existence of court process issued in respect of a judgment debt
C. A court ruling that the company is unable to pay its debts
D. The existence of company’s liability in excess of its assets
E. Outstanding debts owed by the company in excess of one billion naira

Answer

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Tags: Company Law, Insolvency, Legal Tests
Level: Level 1

Topic: Company Law
Series: MAY 2017

BL – MarJul 2020 – L1 – SA – Q5 – Company Law

Question assessing the role of a receiver/manager in managing the assets of an insolvent company.

Question

A person appointed by the secured creditors to manage the assets of an insolvent company is
A. Bailiff
B. Auctioneer
C. Debt Collector
D. Accounts Officer
E. Receiver/Manager

Answer

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Tags: Company Law, Insolvency, Management, Secured Creditors
Level: Level 1

Topic: Company Law
Series: MAR/JULY 2020

BL – May 2016 – L1 – SB – Q5b – Company Law

Identify six circumstances under which a company can be placed under receivership.

Question

State SIX circumstances under which a company can be placed under Receivership.

Answer

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Tags: Corporate Governance, Insolvency, Receivership
Level: Level 1

Topic: Company Law
Series: MAY 2016

BL – May 2024 – L1 – SA – Q6 – Company Law

Identify the two types of insolvency recognized by law.

Question

The two types of insolvency recognized by the law are
A. Directors’ and shareholders’ insolvency
B. Members and company insolvency
C. CAC and company insolvency
D. Corporate and personal insolvency
E. Receiver and shareholders insolvency

Answer

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Tags: Company Law, Corporate Law, Insolvency, Personal Insolvency
Level: Level 1

Topic: Company Law
Series: MAY 2024

BL – May 2016 – L1 – SA – Q6 – Business Ethics and Corporate Governance

Identify the amount that triggers insolvency for unpaid debts within a specific period.

Question

A company is said to be insolvent when it is unable to pay its debts within three weeks after a written demand for the payment of an amount of money exceeding
A. ₦1,500
B. ₦2,000
C. ₦5,000
D. ₦7,500
E. ₦10,000

Answer

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Tags: Business Obligations, Debt Repayment, Insolvency
Level: Level 1

Topic: Business Ethics and Corporate Governance
Series: MAY 2016

BL – May 2024 – L1 – SA – Q3 – Company Law

Eligibility for appointment as an administrator of a company.

Question

Who among the following is eligible to be appointed as an administrator of a company?
A. A chartered accountant
B. A legal practitioner
C. Administrator-General
D. An insolvency practitioner
E. A public administrator

Answer

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Tags: Company Administration, Corporate Law, Insolvency
Level: Level 1

Topic: Company Law
Series: MAY 2024

BL – May 2015 – L1 – SB – Q1c – Company Law

Explain the term "Insolvency" and state four consequences of insolvency.

Question

An insolvent person cannot properly manage his personal affairs.
i. Explain briefly the term “Insolvency”. (2 Marks)
ii. State FOUR consequences of Insolvency. (4 Marks)

Answer

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Tags: Bankruptcy, Insolvency, Personal Affairs
Level: Level 1

Series: MAY 2015

BL – May 2015 – L1 – SA – Q7 – Company Law

Identify which court has original jurisdiction for insolvency-related matters.

Question

The court that has original jurisdiction to entertain a suit on matters relating to insolvency is

A. State High Court
B. Federal High Court
C. National Industrial Court
D. Customary Court of Appeal
E. Sharia Court of Appeal

Answer

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Tags: Insolvency, Jurisdiction
Level: Level 1

Topic: Company Law
Series: MAY 2015

BCL – Mar 2024 – L1 – Q5e – Legal Implications Relating to Companies in Difficulty or in Crisis

Explain the concept of a Declaration of Insolvency in the context of company law.

Question

What is a Declaration of Insolvency? (2 marks)

Answer

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Tags: Company Law, Corporate Crisis, Declaration, Insolvency, Liquidation
Level: Level 1

Topic: Legal implications relating to companies in difficulty or in crisis
Series: MAR 2024

BCL – Mar 2024 – L1 – Q5c – Legal Implications Relating to Companies in Difficulty or in Crisis

List and explain grounds for winding up a company under the Bodies Corporate (Official Liquidations) Act, 1963, Act 180.

Question

State FIVE (5) grounds that may lead to the winding up of a company pursuant to the provisions of Bodies Corporate (Official Liquidation Act, 1963, Act 180). (5 marks)

Answer

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Tags: Company Law, Insolvency, Liquidation, Official Liquidation Act, Winding-up
Level: Level 1

Topic: Legal implications relating to companies in difficulty or in crisis
Series: MAR 2024

Question Tag: Insolvency

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AAA – Nov 2012 – L3 – AII – Q12 – Auditor’s Legal Liability

Identifies the type of creditors given priority in payment during a liquidation process.

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AAA – Nov 2012 – L3 – SA – Q18 – Auditor’s Legal Liability

Identifying debtor categories exempt from bankruptcy declaration under Nigerian law.

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AAA – Nov 2011 – L3 – SAII – Q17 – Review of Subsequent Events and Going Concern Assumptions

Definition of a company's inability to meet financial obligations on time.

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BL – Nov 2020 – L1 – SB – Q2c – Company Law

Differentiate insolvency from bankruptcy and outline consequences of insolvency.

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BL – Nov 2020 – L1 – SA – Q5 – Company Law

Objective question testing knowledge on company financial status related to solvency.

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BL – May 2013 – L1 – SA – Q20 – Law of Trusts

This question tests knowledge of which entities cannot be declared bankrupt.

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BL – May 2013 – L1 – SA – Q11 – Law Relating to Banking

This question tests the knowledge of the official responsible for administering a debtor's estate in bankruptcy.

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BL – May 2014 – L1 – SA – Q19 – Law Relating to Banking

Identifying the term for a bankruptcy petition against a common debtor.

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BL – May 2014 – L1 – SA – Q12 – Company Law

Identifying what is not a ground for winding up a company.

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BL – Nov 2013 – L1 – SB – Q6b – Agency Law

Stating three acts of bankruptcy for which proceedings may be instituted.

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BL – May 2017 – L1 – SA – Q6 – Company Law

Identifying non-inclusion in the tests for insolvency under Companies and Allied Matters Act.

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BL – MarJul 2020 – L1 – SA – Q5 – Company Law

Question assessing the role of a receiver/manager in managing the assets of an insolvent company.

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BL – May 2016 – L1 – SB – Q5b – Company Law

Identify six circumstances under which a company can be placed under receivership.

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BL – May 2024 – L1 – SA – Q6 – Company Law

Identify the two types of insolvency recognized by law.

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BL – May 2016 – L1 – SA – Q6 – Business Ethics and Corporate Governance

Identify the amount that triggers insolvency for unpaid debts within a specific period.

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BL – May 2024 – L1 – SA – Q3 – Company Law

Eligibility for appointment as an administrator of a company.

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BL – May 2015 – L1 – SB – Q1c – Company Law

Explain the term "Insolvency" and state four consequences of insolvency.

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BL – May 2015 – L1 – SA – Q7 – Company Law

Identify which court has original jurisdiction for insolvency-related matters.

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BCL – Mar 2024 – L1 – Q5e – Legal Implications Relating to Companies in Difficulty or in Crisis

Explain the concept of a Declaration of Insolvency in the context of company law.

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BCL – Mar 2024 – L1 – Q5c – Legal Implications Relating to Companies in Difficulty or in Crisis

List and explain grounds for winding up a company under the Bodies Corporate (Official Liquidations) Act, 1963, Act 180.

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