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JAMB Commerce 2001 Question 9

Question 9

Business Units

Entrusting the management of a company to the courts to enable the settlement of the company's obligations is an indication of

  1. A.distress
  2. B.closure
  3. C.bankruptcy
  4. D.liquidation.
Show the answer and explanation

Answer: D (liquidation.)

Explanation

When a court takes over a company's affairs to settle its debts, the company is being liquidated (wound up).