Insolvency – Page 4

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

BCL – Nov 2023 – L1 – Q5c – Legal Implications Relating to Companies in Difficulty or in Crisis

Discuss the eligibility and restrictions related to the appointment of a receiver, particularly in cases of conflict of interest.

Question

c) Manu is the Finance Director of Womengold Ltd, an insolvent company whose creditors have applied to the court to appoint a receiver. Manu wants to be appointed as a receiver since he is very much versed with the details of the company and feels better placed to deal with the creditors than any other person. Alternatively, he proposes that his consultancy company, Adom Consult, should be appointed as a receiver.

Required: i) Explain whether or not Manu or Adom Consult can be appointed as a receiver. (6 marks)

ii) State FOUR (4) reasons that prohibit a person from being appointed as a receiver. (4 marks)

Answer: i) Manu, as a director or former director, along with all other directors, cannot be appointed receiver for the company. The same applies to an auditor of the company. Their previous detailed knowledge of the company is immaterial here, and they must hand over the books, documents, etc., to any court-appointed receiver.

Manu’s consultancy company, Adom Consult, or any corporate body is also barred from being appointed as a receiver. (6 marks)

Answer

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Tags: Company Law, Conflict of Interest, Insolvency, Receivership
Level: Level 1

Topic: Legal implications relating to companies in difficulty or in crisis
Series: NOV 2023

BCL – Nov 2019 – L1 – Q3b – Legal implications relating to companies in difficulty or in crisis

Impact of liquidator appointment on the Board of Directors during private liquidation.

Question

State what happens to the Board of Directors of a company limited by shares on the appointment of a Liquidator in respect of private liquidation. (4 marks)

Answer

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Tags: Board of Directors, Company Law, Insolvency, Liquidation
Level: Level 1

Topic: Legal implications relating to companies in difficulty or in crisis
Series: NOV 2019

BCL – Nov 2019 – L1 – Q3a – Legal implications relating to companies in difficulty or in crisis

Explanation of liquidation, winding-up, and dissolution as used in company law.

Question

a) Briefly explain TWO (2) of the following as used in company law:

i) Liquidation (2 marks)
ii) Winding-up (2 marks)
iii) Dissolution (2 marks)

Answer

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

Topic: Legal implications relating to companies in difficulty or in crisis
Series: NOV 2019

BCL – July 2023 – L1 – Q5c – Legal Implications Relating to Companies in Difficulty or in Crisis

Explain the consequences of winding-up a company by private liquidation.

Question

Three brothers Aba, Bawa, and Caroline registered a company (ABC Ltd) to supply cocoa products. The most influential member of the Board, Caroline, died five years into the life of the business. The surviving two directors decided to pass a special resolution by private liquidation to wind-up the business.

Required:

Explain FIVE (5) consequences of winding-up ABC Ltd by private liquidation. (10 marks)

Answer

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Tags: Company Winding-Up, Corporate Law, Insolvency, Private Liquidation
Level: Level 1

Topic: Legal implications relating to companies in difficulty or in crisis
Series: JULY 2023

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.

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

Identifying debtor categories exempt from bankruptcy declaration under Nigerian law.

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.

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

Differentiate insolvency from bankruptcy and outline consequences of insolvency.

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

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

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

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

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.

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

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

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

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

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

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

BCL – Nov 2023 – L1 – Q5c – Legal Implications Relating to Companies in Difficulty or in Crisis

Discuss the eligibility and restrictions related to the appointment of a receiver, particularly in cases of conflict of interest.

BCL – Nov 2019 – L1 – Q3b – Legal implications relating to companies in difficulty or in crisis

Impact of liquidator appointment on the Board of Directors during private liquidation.

BCL – Nov 2019 – L1 – Q3a – Legal implications relating to companies in difficulty or in crisis

Explanation of liquidation, winding-up, and dissolution as used in company law.

BCL – July 2023 – L1 – Q5c – Legal Implications Relating to Companies in Difficulty or in Crisis

Explain the consequences of winding-up a company by private liquidation.

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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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BCL – Nov 2023 – L1 – Q5c – Legal Implications Relating to Companies in Difficulty or in Crisis

Discuss the eligibility and restrictions related to the appointment of a receiver, particularly in cases of conflict of interest.

You're reporting an error for "BCL – Nov 2023 – L1 – Q5c – Legal Implications Relating to Companies in Difficulty or in Crisis"

BCL – Nov 2019 – L1 – Q3b – Legal implications relating to companies in difficulty or in crisis

Impact of liquidator appointment on the Board of Directors during private liquidation.

You're reporting an error for "BCL – Nov 2019 – L1 – Q3b – Legal implications relating to companies in difficulty or in crisis"

BCL – Nov 2019 – L1 – Q3a – Legal implications relating to companies in difficulty or in crisis

Explanation of liquidation, winding-up, and dissolution as used in company law.

You're reporting an error for "BCL – Nov 2019 – L1 – Q3a – Legal implications relating to companies in difficulty or in crisis"

BCL – July 2023 – L1 – Q5c – Legal Implications Relating to Companies in Difficulty or in Crisis

Explain the consequences of winding-up a company by private liquidation.

You're reporting an error for "BCL – July 2023 – L1 – Q5c – Legal Implications Relating to Companies in Difficulty or in Crisis"

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