- 20 Marks
BCL – L1 – Q100 – Legal implications relating to companies in difficulty or in crisis
Discuss issuing certificates to debenture holders, stages of involuntary liquidation, and characteristics of a floating charge.
Question
Kwame Asare believes that debenture holders, though not being shareholders, deserve to be issued certificates. This is because, without their funds, the company cannot survive.
Required:
Explain if you agree or disagree with Kwame Asare on his view on the issue of certificates to debenture holders.
(a) Identify FOUR (4) stages of involuntary liquidation and explain the consequence of each stage identified.
(b) Explain THREE (3) characteristics of a floating charge.
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