Before a Company Can Be Would Up by Its Shareholders

question 10

Multiple Choice

Before a company can be would up by its shareholders, its directors must make a declaration of solvency.This is a declaration that:

• A)the shareholders believe that the company is insolvent.
• B)the directors believe that the company will be able to pay all its debts within 12 months after the commencement of the winding up.
• C)the directors believe that the company has no significant debts.
• D)the directors believe that the company should not be wound up.

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Definitions:

Future Interest

A legal right to property ownership that will begin at a future date, rather than immediate possession.

Life Tenant

An individual who has the right to use or occupy a property during their lifetime, but does not own the property.

Reduce Its Value

Reduce Its Value refers to the process or event that diminishes the worth of an asset or commodity.

Rental Income

Earnings received from renting out property or real estate to tenants.