Due to the COVID-19 pandemic, the Federal Government stepped in and legislated in March 2020 to...

Due to the COVID-19 pandemic, the Federal Government stepped in and legislated in March 2020 to temporarily suspend key aspects of insolvent trading law in the Corporations Act 2001 (Cth) for a period of six months. The suspension was recently extended to last until 31 December 2020. In view of these events, do you think that the Federal Government should permanently remove (ie. abolish) Australian insolvent trading law, especially considering that no such equivalent law exists in the United States? If so, discuss why? If not, discuss why not? Or, if you think insolvent trading law should be retained, but modified, discuss why?

Please provide long explanation why or why not. and the laws that support the claims.

Expert Solution

As per the Section 95 A of the Company's Act, if a company is unable to pay its debts, as on the date and at which the payment gets due, a company is called insolvent. Insolvent trading is the situation at which a company cannot pay its debts, which are due, and continues the trade as before.

As far as limited companies are concerned, because of its insolvency (unabale to pay debt), business will naturally go into liq cuidation, stop trading and the firm will be sold to some other parties. During the time of insolvency, the company's administative officers do their maximum to help the companies to pay their debts.

Liqidation on the other hand is a process through which the company sells all assets before dissolving the company completely.

In Australia the term insolvency is related to companies. On the other hand in the case of individuals it is called bankruptcy.

The existing law in Australia, in connection with insolvency, helps to maintain an equitable balance with the interests of both the debtors and creditors.

It is vested in the Australian Secrities and investment commission has the power to offer some kind of relief to the companies which are unable to pay bebt,because of their financially risk situation.

The governments will inittiate a method which can help the critically distressed businesses to of restructure. This Covid - 19 pandemic is a situation which no economy can predict earlier. It affected all the economic activities all over the world very badly.

All the organizations are suffering and trying to overcome this situation some or other way. The growth of each business units will add additional unit of Gross Domestic production. Hence we can expect a favourable move from the part of the federal government to survive the companies by extending the implementation of Australian Dissolvancy Act.

Rahul Sunny answered 1 year ago

Since the beginning of 2020, the world is suffering from the pandemic. Due to Covid-19, the...

Since the beginning of 2020, the world is suffering from the pandemic. Due to Covid-19, the demand for surgical masks surges rapidly. Assuming firms that produce surgical masks only need machines that produce surgical masks and workers that operate the machines. What do you think would happen to the equilibrium wage and unemployment, if there is no quarantine in place? And if there is? Assuming we are talking about a small closed economy.

On April 4th 2020, Business Line reported that due to the COVID-19 pandemic, the world is...

On April 4th 2020, Business Line reported that due to the COVID-19 pandemic, the world is facing a recession, that economic output is shrinking and growth is sharply lowered. These scenarios are affecting corporate earnings as well as stock prices where prices were sent crashing and investors were left gasping for breath. In response to the COVID-19 pandemic, the Federal government of Malaysia has taken a preventive measure by imposing movement control order (MCO) since March 18th 2020. Given 3...

In regards to the Federal Government leadership and Task Force Strategic Response for the Covid-19 Pandemic,...

In regards to the Federal Government leadership and Task Force Strategic Response for the Covid-19 Pandemic, write an analysis for each of the following; 1. Sufficient training for employees 2. Identify and then modify reports on the decision-making processes to include the use of the pandemic change. 3. Incentive both the learning and practicing use of the pandemic change. 4. Avoid the appearance of a top-down decision that's forcing this change before the organization i ready to adapt to it.

In this exercise, we focus on the economic impact of the COVID-19 pandemic Due to the...

In this exercise, we focus on the economic impact of the COVID-19 pandemic Due to the COVID-19 pandemic, online teaching becomes a norm in many countries. What are the consequences of students switching to online learning in the following markets? a) (10 points) Laptops. b) (10 points) Classroom equipment (e.g., chairs, desks, whiteboards). There are four markets you need to analyze separately. Assume that each market is perfectly competitive with no frictions (i.e., equilibrium point is reached with no obstacles);...

Due to Covid -19 pandemic, government of Indonesia implements an expansionary monetary policy such as give stimulus to Small Medium Entreprise

Due to Covid -19 pandemic, government of Indonesia implements an expansionary monetary policy such as give stimulus to Small Medium Entreprise, lowering interest rate and decreasing reserve ratio. Indicate the impact of this policy on each of the following four variables:-) inflation rate,-) real output and employment,-) real interest rate,-) budget deficit.

14. Describe the role of the federal government in the COVID-19 response.

Did the Covid 19 pandemic affect the government universites economically? And how is that?

In the face of the COVID-19 pandemic, the government is advising the households to stock up...

In the face of the COVID-19 pandemic, the government is advising the households to stock up essential goods. What if there is panic buying? Explain in detail the behaviour of the money market. (12.5 Marks)

QUESTION THREE Ghana recorded its first Covid-19 case in March, 2020. The outbreak of the Covid-19...

QUESTION THREE Ghana recorded its first Covid-19 case in March, 2020. The outbreak of the Covid-19 Pandemic in Ghana has affected the various sectors of the Ghanaian economy in many ways. The Government of Ghana has requested the businesses in the industry your business operates to submit a business plan for financial support. Required: Describe the elements of a solid business plan you will submit to Government of Ghana.

Has the reduction of mobility due to the COVID-19 pandemic increased or reduced the cost of...

Has the reduction of mobility due to the COVID-19 pandemic increased or reduced the cost of living? According to The New Geography of Jobs, Americans have historically been mobile, continually seeking new opportunities to improve their lives. The COVID-19 pandemic has caused people to remain indoors, and even some States have prevented unnecessary movement of people from one place to another. It is a huge change for many Americans who depend on constant mobility for their economic survival. As such,...

Question