Nobody downloaded yet

Company & Insolvency Law - Assignment Example

Comments (0) Cite this document
Assignment 1. The difference between the fixed charge and the floating charge granted to the bank and Loanshark; There are two types of charges that Khalid and Mahmood may consider which is a fixed and a floating charge. Before and at the onset of insolvency, fixed charge holders enjoy an unfettered right to enforce their debt repayments by dragging their debtors to court upon default by the latter…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER93.3% of users find it useful
Company & Insolvency Law
Read TextPreview

Extract of sample "Company & Insolvency Law"

Download file to see previous pages whereas a floating charge is that which allows a company to undertake borrowings despite non possession of assets which may be specific in nature and the charges are placed on the company’s assets like its machinery, stock in trade etc. Before and at the onset of insolvency, fixed charge holders enjoy an unfettered right to enforce their debt repayments by dragging their debtors to court upon default by the latter.1 A debenture holder, whose debt is secured by a floating charge over the assets of a company such as its book debts and trading stock, is likely to enjoy boundless benefits should such a charge crystallize preferably before the onset of insolvency. In Khalid and Mahmood’s business, the bank charges a fixed charge on the company’s assets meaning it secures via mortgaging the assets of the company in case of debts and further affixes a floating charge on the rest of the undertaking of the company. ...
er party owing to the weight of his needs, leaving room for the stronger party to make collateral demands whose fairness may be of little relevance, given the freedom of contract doctrine at the heart of contract law. However, when the sum realized from the fixed assets is not enough to pay the debt owed to the creditors, the holder is then relegated to the undesirable general league of unsecured creditors for the remaining balance, subject to pari passu regime. The fixed charge of 75,000 that has been granted by the bank is an automatic security clause, and is the first priority and thus needs to be paid before anything else. According to the facts of the case, the bank got the 75,000 pounds of loan as a fixed charge interest. This loan was undertaken to be a floating charge loan with a negative pledge on the floating assets of the company. It can be demarcated to a floating charge loan only when the loan is given on collateral which is not fixed in nature. Loanshark granted a 20000 Pounds worth of floating charge on the company’s undertaking. Adopting from the theory, we can assume that such charge was given on the floating assets of the company. Taking case laws into account, the case of Agnew v Commissioners of Inland Revenue2 involved the security interest of the company’s assets and the priority of the creditors in the winding up of the business. Other cases like Leyland Daf Ltd3 involve floating charges depicting how crystallization on time can help save the company. Under all the circumstances, if a company has taken loan on a fixed charge interest and floating charge interest, the loan which has been taken on the fixed charge interest has to be paid at the earliest time possible. This is done so that the loan on the fixed security which is more vulnerable ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
(“Company & Insolvency Law Assignment Example | Topics and Well Written Essays - 2500 words”, n.d.)
Retrieved de
(Company & Insolvency Law Assignment Example | Topics and Well Written Essays - 2500 Words)
“Company & Insolvency Law Assignment Example | Topics and Well Written Essays - 2500 Words”, n.d.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Company & Insolvency Law

Insolvency Law: Wrongful and Fraudulent Trading

...?INSOLVENCY LAW: WRONGFUL AND FRAUDULENT TRADING By INSOLVENCY LAW: WRONGFUL AND FRAUDULENT TRADING IntroductionDirectors’ duties arising under the Insolvency Act 1986 are best described as an extension of directors’ ordinary duties. Insolvency or pending insolvency exposes directors to an expanded standard of care and broadens the range of possible claimants from shareholders to creditors.1 Although the duties of directors toward creditors of financially distressed companies are decidedly well-documented and codified, there are significant aspects of that duty that are decidedly unclear.2 Among the many...
8 Pages(2000 words)Essay

Does Insolvency Law Need Reform

... Does Insolvency Law Need Reform? Introduction Time and again, companies face financial difficulties that threaten tolead such investments into closure. This should not be allowed to unnecessarily take these companies that are faced with financial difficulties to the wall. There are laws that have existed in various European governments that are meant to govern and outline procedures and steps that can help in ensuring companies faced with insolvency do not close up. This involves putting such companies under administrative receivership; this implies putting the whole company under the watch and management of a secured creditor. This method is considered by many as outdated. Over the previous few years, laws have been enacted... that are...
4 Pages(1000 words)Essay

Insolvency Law and Capitalism

... and uncertainties present in investments such as competition, accidents, or even problems caused by financial crises, business failures and bankruptcies, which are usually followed by disputes over a company or individual's financial arrangements, become commonplace. Such occurrences threaten the very fuel that drives capitalism: it threatens the value of a business' much needed capital and it threatens the smooth flow of economic activity. In order to avoid such problems, institutions were built in the form of insolvency laws. Insolvency laws facilitate the liquidation of assets or possible reorganization of a bankrupt firm. It is meant to ensure that the process is smoothly executed, avoiding and solving conflicts, salvaging... the...
4 Pages(1000 words)Essay

Cross Border Insolvency

...Topic: Cross Border Insolvency Instructions: Question: In relation to the respective >rescue= processes of the insolvency law regimes of USA, Australia and UK, outline: a ) common characteristics b) any significant differences In any case: c) how compatible are those processes d) how would the event of any incompatability affect the development and employment of a cross border recognition and assistance law between those jurisdictions Perhaps one should, from the outset, seek to clarify what is usually meant by the term >rescue= in the various legal regimes under consideration. Some legal regimes refer to the concept of rehabilitation. However in most cases, the...
5 Pages(1250 words)Essay

Company Law - English law

...and not to shareholders or creditors, present or future.15 However there have been statutory inroads on the common law presumption under the Insolvency Act (ss212-214, ss238-240) and Schedule 1 of the Companies Directors Disqualification Act 1986. The directors' powers to dispose of company assets and any procedural requirements will be detailed in the Articles. At common law directors must not use their powers for an improper purpose; this is assessed objectively16. The directors appear to have been motivated to ensure LJM Limited obtained valuable assets as cheaply as possible, rather than to ensuring that W&H Limited obtained the best...
10 Pages(2500 words)Case Study

Company Law, Business Law

...May 23, 2006 Academia Research Topic: Exam questions for Business Law (Company Law Adam owns 11% of the shares in a medium-sized company, andthat company owns a chain of fast food outlets around Wales. Apparently, the board of directors has decided to implement two recent special resolutions to alter the articles of association. Additionally, Adam is uncomfortable with the decision of the board of directors because the board of directors no longer needs to obtain the approval of the shareholders for certain high-value transactions. Mostly, the majority rule usually prevails when voting over certain issues pertaining to the company;...
3 Pages(750 words)Essay

Insolvency Law treated as creditors under the Insolvency Acts (IA) 1986 & 2000 or as consumers under the Sale and the Supply of Goods to Consumer Regulations 2002 (SSGR). The difficulty with insolvency is that the company is no longer running and the customer group is not going to complete their contract with the vendor, therefore the exact status of this group of customers need to be investigated, especially when the focus of the SSGR is to make the consumer the King of the transaction and properly protected by the law. There is also a secondary concern with the acts of the vendor, whereby he continued to take orders and advances on these orders when he was unsure if he was going...
20 Pages(5000 words)Essay

Insolvency law in United Kingdom

...on precedents which have not been overturned and which are simply inconsistent with the creed of internationalism, as nowadays understood. As the foregoing comments are intended to suggest, the current state of English law concerning international insolvency is in need of a revision and restatement, so as to rectify the anomalies and inconsistencies which have arisen over the course of time. An authoritative statement of the relevant principles, matched to the conditions and requirements of the present day, would be of much value to those, both at home and abroad, who need an accurate and accessible account of the law in its current state. Such an exercise might be carried out by an...
6 Pages(1500 words)Essay

Business Law (company law)

...liability company business structure has generally less precedent in terms of case laws. This is due to the fact that it is a relatively newer structure. Form of Limited Liability Company I would advise them to form a partnership form of limited liability Company for the reason that there are three members involved. Thereafter, is would be advisable for them to file Form 8832 which would get the elected as a corporation. Naming of the limited liability company They could definitely retain their current business name if they so desire provided certain rules are observed. The rules that govern the naming of a limited liability company...
8 Pages(2000 words)Essay

Insolvency Law

...Insolvency Law Table of Contents Introduction 3 Cork Report 4 Importance of the Aim Selected 6 Critical Evaluation 8 Conclusion 13 References 14 Introduction With the changing modern day business context, companies have been forced to transform their business activities to fit in with the changing environment. Again, the level of competition has also enhanced rapidly over the years which has further yielded a scenario where they are forced to conduct business activities in a way that can ensure better results in comparison with the competitors to attain a sustainable position in the market. This aspect further helps in enhancing the reputation of the companies in front of...
12 Pages(3000 words)Essay
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Assignment on topic Company & Insolvency Law for FREE!

Contact Us