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Liquidation of companies
Accountancy
1)What are overriding preferential payments? 2)Who are preferential creditors? 3)Difference between overriding preferential payments and preferential creditors
Answers (6)
Priya Ravi
Over-riding preferential creditors are creditors who have preferential right to receive their dues in the case of insolvency or bankruptcy.
Over-riding preferential creditors are creditors who have preferential right to receive their dues in the case of insolvency or bankruptcy.
Priya Ravi
Over-riding preferential creditors are creditors who have preferential right to receive their dues in the case of insolvency or bankruptcy.
Preferential Creditors are those creditors who have a preference for payment of dues at the time of the liquidation of the company. they are basically the more eligible ones as against the others, so the Government, Secured Creditors and Employee payments are considered to be Preferential Creditors. Overriding preferential creditors is a concept where some some are considered to be above such preference creditors as explained above, i.e. preferential creditors in the preference of payment. So the secured Creditors share the proceeds of the asset pledged or secured against charge to such creditor, to payments to be made to an employee which is due, during the last 12 months for a 4 month due or Rs. 20000 maximum.
Thread Starter
lohith perumallaSo workmen dues comes under both over riding preferential payments and preferential creditors
In last 12 months 4 months due subject to maximum of 20000 comes under over riding preferential payments or preferential creditors
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