Question

1. Company restructuring can be done if there is evidence that
I. The company is able to repay the debt.
II. The company is able to generate profits in the future after the restructuring scheme is completed.
III. The implementation scheme has been registered with the Companies Commission
IV. Have enough cash to cover the liability.

A. I and II.
B. I, II and III
C. I and IV
D. All of the above

2. The following legal procedures must be followed by the company in the restructuring process. Please specify the correct order of procedures.
I. Apply to court to hold a meeting between shareholders and creditors.
II. Register a memorandum and statement of financial impact in court.
III. Obtain 75% consent by the shareholder or creditor (or represented by proxy)
IV. The board of directors prepares a memorandum and statement of the financial impact of the restructuring scheme.
V. The court sends the approval of the restructuring scheme to the company registrar.
VI. The court decides on the direction of implementation of the scheme if the court is satisfied with the statutory requirements and financial implications.

A. I, III, IV, VI, V, II
B. IV, II, I, III, VI, V
C. I, II, III, IV, V, VI
D. III, I, II, VI, V, IV.

3. Select the NOT true statements regarding the capital reduction scheme below:

A. Dispose of unpaid share liabilities to shareholders.
B. Requires special resolution at extraordinary general meetings.
C. Reduce the value of equity shares to the extent of the company's needs only.
D. Enable the company to issue additional shares to settle liabilities.

4. The following is true regarding the capital reduction account of the EXCLUSION internal restructuring scheme:

A. Excess capital reduction account will increase the capital reserve account after restructuring.
B. Lack of capital reduction accounts will reduce capital reserve accounts after the restructuring.
C. Settlement of liabilities through the issuance of new shares will reduce capital reduction accounts.
D. The repurchased equity shares will be credited to the capital reduction account.

Answer 1

1. Option D

Company reconstruction can be done when

I. The company is able to repay the debt.
II. The company is able to generate profits in the future after the restructuring scheme is completed.
III. The implementation scheme has been registered with the Companies Commission
IV. Have enough cash to cover the liability.

2. Option B

IV, II, I, III, VI, V

3. Option D

Capital reductioncan be done by

1.reducing the liability of members in rest of uncalled or unpaid capital.

2.paying of or returning laid-up capital not wanyed for the purpose of the company.

3.paying off paid-up capital on the conditions that it may be called up again.

4. Writing off or cancelling the capital which has benn lost or is under represented by the availbale assets.

Hence,option d is correct.

4. Option C