The statement that is true about the order of repayment for a company in liquidation is:
A) creditors rank before ordinary shareholders.
B) ordinary shareholders rank before preference shareholders.
C) wages owing to employees rank last.
D) All of the statements are true.

Question

Quizplus · Accepted Answer

In liquidation, creditors have priority over ordinary shareholders in terms of repayment. Preference shareholders also rank before ordinary shareholders in terms of repayment. Wages owed to employees have a higher priority than unsecured creditors but rank lower than secured creditors and preferential debts.

The Statement That Is True About the Order of Repayment