LML4806 - Company Law Test Questions and Answers 2024
What info must be contained in a compromise proposal? - - any proposals made "informally" by a company creditor
- details of all assets and creditors
- treatment of ongoing contracts
- order of preference, proceeds apply
- conditions prec...
LML4806 - Company Law Test Questions and Answers 2024
What info must be contained in a compromise proposal? - - any proposals
made "informally" by a company creditor
- details of all assets and creditors
- treatment of ongoing contracts
- order of preference, proceeds apply
- conditions precedent
- number of employees
- t&c of employment
- projected balance sheet
- income and expenses for 3 years
- certificate by authorized director stating info is factual, accurate, up to date
When will compromise be adopted and binding - - S155(6) adopted if
supported by a majority in number representing at least 75% in value of
creditors
- A company may apply to court for an order approving the proposal
- suggests it is not necessary for a company to obtain sanction of High Court
before a compromise becomes binding on dissenting creditors
Record date - - determines certain rights of shareholders
- S59(1) a company may set a record date for purpose of determining which
shareholders are entitled to receive the notice, vote etc
- latest date by which the company is required to give notice to SH of the
meeting, or date of action or event
- board fail to set date, date is last day on which notice should be given to SH
of SH meeting (public = 15 bdays; private = 10 bdays)
, Compromise - - agreement or arrangement or restructuring of claims
between a company and its creditors in terms of which the creditors agree to
accept less than their full claims against the company
- binding on all companies creditors
Compromise proposal is divided into three parts - - background
- the proposal itself
- assumptions and conditions
How is proposal of compromise effected? - - by delivery of a copy of the
proposal
- and notice of a meeting to consider the proposal to the Companies
Commission and to every creditor of the company or every member of the
relevant class of creditors whose name and address is known or can
reasonable be obtained by the company
When is compromise proposal adopted - - when supported by a majority in
number
- representing at least 75% in value of creditors present & voting (or proxy)
If a compromise is approved by court? - - company must file a copy of the
order with Companies Commission within 5 business days
- copy must be attache to each copy of Company MOI
- order of court is final and binding on all creditors or class of creditors from
the date on which a copy of the order is filed
Company Secretary - - public & state owned company are obliged to appoint
one
- company must maintain record of company secretaries
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