COMPANY LAW

Company Law

Company Law

Introduction

The issue of liquidation is the core topic of this assignment. The case revolves around the company known as DART. DART has faced the problems of cash flows in the past and it has borrowed a lot of money, as a result, from different lenders to counter the issue of cash flow. The major problem in the case is the petition filed for liquidation by one of the major trade creditors of DART. The date has been also assigned for the liquidation. This development has not been taken favourably by DART because they are concerned about their survival. The company is even worried about the past transaction that has taken place with other creditors because these agreements might get affected because of this petition. The latest transaction such as the borrowing of loan by DART Company from Janice is facing the highest threat of getting affected because of the current liquidation scenario. DART cannot afford to have these agreements cancelled because of their weak cash flows. This is the reason why DART needs proper advice from its legal team on this matter in order to resolve the current issue. The legal team would need to review the two sections known as Insolvency Act of 1986 and Companies Act 2006. These two sections of the Corporate Law would certainly assist DART to meet the liquation problem in the best possible way.

Main Body

In the upcoming paragraphs, the information related to both clauses of UK's Corporate Law will be discussed in the following paragraphs. The two clauses mentioned in the preceding paragraph are 213-214 Insolvency Act 1986 and 177 Companies Act 2006. All the information related to their background, application and the benefits it provides to companies under differing circumstances would be discussed in detail. However, the main focus of this research is on the liquidation, so the entire information related to this concept would be covered in detail. The requirements and conditions that must be met for liquidation would be discussed thoroughly in the upcoming paragraphs. Recent years have seen a significant rise in personal insolvencies, in many outstanding economies. In the US, for example, rates of filing for non-business bankruptcy rose from 15 to 54 persons per 10 000 population from 1980 to 2004, whilst, in Canada, personal bankruptcies grew by 87 per cent over the period 1990-2007. Similarly, there was a staggering 350 per cent increase in bankruptcy, in Australia, over the 10 years from 1988 to 1998, and, in England, and, Wales, individual insolvencies rose from an average of 7000 per annum in the 1980s to 27 500 in the 1990s, and, then to more than 100 000 in 2006, and, 2007 (Agarwal, 2003, 84).

Traditional explanations of insolvency, which regard it as something 'forced' on individuals by unforeseen events that impact on an individual's financial position, have only been partially successful in explaining these changes. Consequently, a wide range of explanatory factors have been examined including changes in bankruptcy law, social and demographic ...