company accounting Liquidation of companies参考.ppt

* * * * * * * * * * * * * * * * * * * * * * Chapter 21 Liquidation of companies Prepared by Emma Holmes What is a winding-up? Process whereby a company is dissolved Company ceases to be a legal entity Also referred to as a liquidation Legal requirements contained in chapter 5 of Corporations Act Two modes: Winding-up in insolvency by the court Voluntary winding-up by members or creditors Accounting method the same in both cases Winding-up by the court Where a company is insolvent, application may be made to the court for winding-up Insolvency is presumed to exist under a number of circumstances set out in the Corporations Act. These include where: A creditor serves a demand for unpaid debts over $2,000 and the debt remains unpaid after 3 months A receiver has been appointed under a floating charge on property Insolvency is the most common reason for liquidation – therefore the major accounting problem is the apportionment of limited assets between creditors and shareholders Winding-up by the court Corporations Act also contains general grounds for winding-up. These include: The company has resolved by special resolution that it be wound-up The company does not commence business within a year of incorporation or suspends business for more than a year ASIC or APRA issue a request for the company to be wound up Winding-up by the court Liquidator is appointed to oversee the liquidation. The task of the liquidator is to: Take possession of the company’s assets Realise the assets or carry on the business as necessary for the beneficial disposal of the assets Determine the creditors and order of priority of payment Pay the creditors Distribute the balance of funds (if any) to shareholders Bring about the dissolution of the company Winding-up by the court The directors must prepare and submit a Statement of Affairs to the liquidator within 14 days of the making of the order for winding-up The Statement of Affairs includes: Summary of assets and l