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A company enters into a transaction
with a person at an undervalue if: ·
- The company makes a gift to
that person or otherwise enters into a transaction with
that person on terms that the company will receive no consideration
or
- The company enters into a transaction
with that person for a consideration which is significantly
less than the value of the consideration provided by the
company.
Transactions at an undervalue undertaken
2 years prior to the liquidation come under review as part
of the liquidators duties.
The liquidator may apply to the Court.
The Court shall make such order as it thinks fit for restoring
the position to what it would have been if the company had
not entered into that transaction.
Transactions at an undervalue are reported
to the Department of Trade and Industry in relation to Directors
Disqualification.
In other words, if, pre-liquidation,
you sell an asset for less than its true value, the liquidator
can take court action to recover the difference.
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