When an Entity Issues Shares,until Such Time as the Shares

question 47

Multiple Choice

When an entity issues shares,until such time as the shares are allotted,the amount received must be held in trust.It remains in trust (refer s722 of the Corporations Act) until:

• A) So directed by ASIC.
• B) The money is returned to the applicants.
• C) Options are issued over the shares.
• D) The Board of Directors indicate that the received monies are required by the entity.
• E) None of the given answers.

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Definitions:

Chapter 11

A provision of the United States Bankruptcy Code that allows businesses to reorganize and restructure their debts under the supervision of the court.

Automatic Stay

A legal provision that halts actions by creditors, with certain exceptions, to collect debts from a debtor who has declared bankruptcy.

Collection Proceedings

The legal process initiated by creditors to recover debts from borrowers through formal legal actions, including lawsuits, garnishments, and property liens.

Order for Relief

A court order in bankruptcy proceedings that gives the petitioner protection from creditors and approves the commencement of bankruptcy processes.