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Choose the most correct statement or the best combination of statements as indicated in the options that follow the statements.

A. Winding-up of companies are regulated by the 1973 and 2008 Companies Acts and the Insolvency Act.

B. A sequestration order reduces the status of a person.

C. A person is insolvent when he is illiquid.

D. In order for a person to be financially insolvent, his estate has to be sequestrated.

E. When the concursus creditorum is formed, then the interests of creditors as a group enjoy preference over the interests of individual creditors.


Statements B, C and D are correct.


Statements A, B, and E are correct.


Statements A, C and E are correct.


Statements B, C and E are correct.


All the statements are correct.

1 answer

To analyze the correctness of the statements:

A. This statement is correct. Winding-up of companies is indeed governed by the relevant sections of the Companies Acts and the Insolvency Act.

B. This statement is correct. A sequestration order does reduce a person's status, particularly in a legal or financial context, often indicating that they are bankrupt or insolvent.

C. This statement is also correct. A person is typically considered insolvent when they are illiquid, meaning they cannot meet their financial obligations as they come due.

D. This statement is correct in the context of formal procedures. A person can be considered financially insolvent when their estate is sequestrated, although insolvency can technically exist even without sequestration.

E. This statement is correct. When the concursus creditorum (the gathering together of creditors) is formed, the interests of creditors as a group take precedence over individual creditors’ interests.

Now let's look at the options provided:

  1. Statements B, C, and D are correct. (This is true.)
  2. Statements A, B, and E are correct. (This is true.)
  3. Statements A, C, and E are correct. (This is true.)
  4. Statements B, C, and E are correct. (This is true.)
  5. All the statements are correct. (This is also true.)

Since all statements A, B, C, D, and E are ultimately deemed correct based on their definitions and contextual application, the most accurate option would be:

All the statements are correct.