RELATIONSHIP BETWEEN BANKRUPTCY, INSOLVENCY & LIQUIDATION ?

“Bankruptcy” is a legal proceeding involving a person or business that is unable to repay outstanding debts.
The bankruptcy process begins with a petition filed by the debtor, or by the creditors.
All of the debtor’s assets are measured and evaluated, and then these assets may be used to repay a portion of outstanding debt.
In lucid language, if any person or entity is unable to pay off the debts, it owes to its creditors, on time or as and when they became due and payable, then such person or entity is regarded as “insolvent”.
“Liquidation” is the winding up of a corporation or incorporated entity. There are many entities that can initiate proceedings that will lead to Liquidation, those being:The Regulatory Bodies;

Ø The Directors of a Company;

Ø The Shareholders of a Company; and

Ø An Unpaid Creditor of a Company

In nut shell, insolvency is common to both bankruptcy and liquidation. Not being able to pay debts as and when they became due and payable is the leading cause for Liquidation and is the only way that can cause a natural person to become a bankrupt.

Comments

Place Of Supply of Goods in GST

Under GST, the ‘Supply’ is a fundamental concept and all the provisions of GST revolves around it. Under Supply, there are three key elements namely time of supply, place of supply and value of supply. These three elements together determine the chargeability of taxes on supply. In this article we will be covering the concept of ‘Place Of Supply’ ‘Place of Supply’ under GST is an important factor as it defines whether the transaction will be counted as intra-state(i.e within the same state) or inter-state(i.e. between two states) and accordingly the changeability of tax, i.e levy of SGST, CGST & IGST will be determined. While determining the levy of taxes based on Place of Supply, two things are considered namely: Location of Supplier: It is the registered place of business of the supplier Place Of Supply: It is the registered place of business of the recipient Let’s understand this with the help of two examples! Determining Place of Supply for Intr...

GOODS AND SERVICE TAX

Goods and Services Tax (GST) is a comprehensive tax on supply of goods or services or both. It eliminates the cascading effect of taxes, as GST is imposed at every stage of supply chain and the input credit is available in across the supply chain. The uninterrupted credit in the supply chain ensures that the end consumer purchases goods and services at a lower price and to ensure this the government has introduced the Anti-profiteering clause based on the experience in Malaysia where GST was implemented from 1st April 2015. Under GST, taxes are paid at all stages in the supply chain i.e. from manufacturing to the end sale to the consumer. Taxes are levied at all the stages and input tax credit is available to the extent of the tax paid during the purchase. The end consumer will not pay taxes directly to GST authorities; the retailer pays the taxes on behalf of the end consumer. The overall idea of having GST in India is to increase the tax base over a period, and this wi...

Section-138 of NI Act,1881 (Dishonour of cheque for insufficiency, etc., of funds in the account)

Dishonour of cheque for insufficiency , etc., of funds in the account. —Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for [a term which may be extended to two years], or with fine which may extend to twice the amount of the cheque, or with both: Provided that nothing contained in this section shall apply unless— the cheque has been presented to the bank within a period of six months from the date ...

Search This Blog