In this article we will discuss about the accounting for liquidation of a company. Liquidation— Bankruptcy: When an insolvent company is to be liquidated, the provisions established by Chapter 7 of the Bankruptcy Reform Act regulate the process. This set of laws was written to provide an orderly and equitable structure for selling assets and paying debts. To this end, [...]
In this article we will discuss about the powers and duties of a liquidator of a company. Also you will learn about the order of payment by a liquidator. Powers of Liquidator: Subject to certain legal provisions and adherence to certain procedures the powers of a liquidator are broadly enumerated as follows: (1) He can exercise the following powers only [...]
When all the liabilities are paid by the Liquidator and even then some amount remains in balance with him, he distributes this balance called surplus among the shareholders of the company. The following guidelines are as follows: (1) Surplus is to be distributed as per the provisions of the Memorandum of Association and Articles of Association. (2) If Preference shares [...]