Justify the following statement: When a company is in financial difficulty it may call a meeting of creditors.
Justify the following statement:
When a company is in financial difficulty it may call a meeting of creditors.
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- Creditors of the company include Debenture holders, Depositors, Banks, financial institutions, etc.
- When a company is in a financial crisis, it seeks the help of creditors.
- The company can request creditors to alter the rate of interest, to alter the terms of security, etc.
- Meeting of creditors can be called to compromise in a dispute with them.
- Creditors and contributors can provide financial help to the company to safeguard them and also to protect them to avoid winding up of a company.
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