INV - Cross Border

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Questions and Answers

What is the relevant time period for unrelated transactions under Section 226 of the IRDA?

2 years

6 months

3 years

1 year (correct)

Under which condition can a court restore a transaction as if it had not been entered into according to Section 224 of the IRDA?

When a company is in liquidation

When a company is in judicial management or winding up (correct)

When the company can pay its debts

When the transaction involves a connected person

What must be established for a transaction at an undervalue (TUV) under Section 225 of the IRDA?

The transaction had no consideration whatsoever

The transaction occurred without any parties involved

The transaction was purely a commercial agreement

The transaction was influenced by a desire to prefer the other party (correct)

Which section provides for the presumption of being influenced by a desire to prefer in cases of unfair or undue preference?

Section 226 (C) Signup and view all the answers

What defense is available under Section 224 of the IRDA regarding unfair or undue preference?

Good faith defense (B) Signup and view all the answers

What is the prescribed limit for initiating a bankruptcy application under the IRDA?

$15,000 (D) Signup and view all the answers

Which section of the IRDA discusses the presumption of inability to pay debts?

Section 312 (C) Signup and view all the answers

Who has the mandatory role in bankruptcy administration as per the IRDA?

Private Trustee in Bankruptcy (D) Signup and view all the answers

Under which section can a bankrupt not leave Singapore according to the IRDA?

Section 401 (C) Signup and view all the answers

Which of the following actions can lead to the annulment of bankruptcy?

Court's order under Section 394 (A), Composition by special resolution (B) Signup and view all the answers

What is the consequence of a discharge from bankruptcy according to Section 397 of the IRDA?

Continuation of certain liabilities (D) Signup and view all the answers

What is required from a bankrupt under Section 332(1) of the IRDA?

Submit a Statement of Affairs (D) Signup and view all the answers

Which regulation states the prescribed limit for the Debt Repayment Scheme?

Section 289(2)(a) of the IRDA (D) Signup and view all the answers

What is the consequence of a court finding that a company has traded wrongfully?

Any party to the trade may be declared personally responsible. (A) Signup and view all the answers

Under which section may a court relieve a person from personal liability?

S 239(2) IRDA (C) Signup and view all the answers

Which of the following is NOT a condition for personal liability under S 239(1) IRDA?

The debts were audited by an external party. (A) Signup and view all the answers

Who can apply for the court to declare personal responsibility in the case of wrongful trading?

Any person mentioned in subsection (5). (A) Signup and view all the answers

What aspect of liability is addressed by S 239(2) IRDA?

Personal liability for company debts. (D) Signup and view all the answers

Under which section of the IRDA is the requirement for a company to prove it has a reasonable prospect to avoid wrongful trading?

s239 (D) Signup and view all the answers

What is the purpose of section 225(5) of the IRDA concerning presumption related to connected persons?

To impose an unfair presumption unless proven otherwise (B) Signup and view all the answers

What must be proven for a company to be responsible for fraudulent trading as outlined in section 238 of the IRDA?

Intent to defraud (C) Signup and view all the answers

Which section of the IRDA specifies that a court may reverse a transaction by discharging a legal mortgage?

s227 (A) Signup and view all the answers

What is the significance of section 226(1)(a) in relation to the timing of a transaction?

It establishes the coincidence of temporal and financial elements. (A) Signup and view all the answers

Which of the following scenarios indicates that a company is engaging in wrongful trading according to section 239(12) of the IRDA?

The company has no reasonable prospect of paying its debts and leads to insolvency. (D) Signup and view all the answers

What does section 226(4) of the IRDA refer to in terms of timing concerning transactions?

The period before the commencement of judicial management (B) Signup and view all the answers

In the context of uncommercial transactions, what element must be present according to section 239 of the IRDA to be deemed wrongful?

A lack of reasonable prospect of success (A) Signup and view all the answers

What can additional orders made by the court under S 239(3) IRDA pertain to?

Debt or obligations due from the company to a liable person (B) Signup and view all the answers

Under S 239(3) IRDA, a court may address which of the following regarding charges on company assets?

Charges or interest in any charge on assets held by the company (A) Signup and view all the answers

What provision is indicated in S 239(3)(c) IRDA regarding sums received?

They are to be paid to certain persons or classes of persons (B) Signup and view all the answers

Which aspect of company obligations does S 239(3)(i) IRDA specifically address?

Debt or obligation due from company to a person liable (C) Signup and view all the answers

What type of orders may a court make under S 239(3) IRDA?

Orders related to declarations of debts and obligations (C) Signup and view all the answers

Which of the following statements regarding the automatic interim moratorium is correct?

It is governed by Section 64 of the IRDA. (A) Signup and view all the answers

What is the key requirement for the contents of the explanatory statement prior to a creditor's meeting?

It must be full and frank. (D) Signup and view all the answers

Which criterion must be met for a scheme to be considered overall fair and equitable to each dissenting class?

The scheme must adhere to the dissimilarity principle. (C) Signup and view all the answers

What is the necessary threshold of creditor support required for the voting on a proposed scheme according to Section 210(3AB)?

Majority in number of each class with at least three-fourths in value present and voting. (A) Signup and view all the answers

Which parties can apply for a scheme under Section 210(2) of the Companies Act?

The company and its creditors. (C) Signup and view all the answers

What is one of the factors that the Court considers before approving a scheme?

The fairness of the classification of creditors. (C) Signup and view all the answers

What happens after leave is granted by the Court to convene a creditor's meeting?

A notice of the meeting and an explanatory statement must be issued. (B) Signup and view all the answers

In the context of the scheme application, what does the term 'dissimilarity principle' refer to?

The classification of creditors must recognize differences in their claims. (A) Signup and view all the answers

Study Notes

LIQUIDATION

Part 8 of the IRDA governs liquidation procedures.
Winding up is a last resort, leading to the dissolution of a company.
Compulsory winding up is initiated by the court.
Advantages (company perspective): Avoidance of liability for wrongful trading, genuine business failure without investigatory concerns.
Advantages (creditor perspective): Suspicion of mismanagement by directors, to examine vulnerable transactions, prevents further debt.
Disadvantages: Irreversible, potential spotlight on company affairs, creates cross-defaults, financial difficulties exacerbated, expensive and time-consuming, uncertain outcome for creditors, potential for incurring more debt.
A winding up application can cause irreparable harm.
Winding up is often uncertain and creditors may receive a fraction of the owed amount.
Secured creditors take precedence over unsecured creditors.
A company can incur more debt even after an application for winding up.

Company/Creditor may apply to court for order of winding up on ground of insolvency

Creditors can file for compulsory winding up, even if a voluntary winding up is already in progress.
Compulsory winding up has more protections and investigations.
A creditor's voluntary winding up is initiated by the company, not the creditors.
Companies that are insolvent should pursue creditors' voluntary winding up.
Directors owe duty to creditors in cases where the company is insolvent or on the brink of insolvency.
A company, or any creditor, can apply.
A contingent/prospective creditor can apply if there is an existing obligation to pay a sum.
Liquidators can be appointed, nominees can be chosen, and companies can apply for creditors' voluntary winding up.
Inability to pay debts can be established through failure to meet a statutory demand, execution of a judgment not being completed, or proved inability to pay debts.
A company must have owed the applicant $15,000 or more.

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Description

This quiz explores the liquidation procedures as outlined in Part 8 of the IRDA. It covers the implications of winding up for companies and creditors, including advantages and disadvantages. Test your understanding of the complexities of liquidation and its financial impacts.