Your bank account is accessible. When someone files a petition to dissolve your business, your Principal liquidation in Access Bank account will be frozen.
To get access to it, you’ll need to complete a validation process.
Inform the respondent (the person who filed the winding-up petition) that you’re requesting a validation order. You must also inform them of the court to which you will be applying (typically the Companies Court) and the day on which you will be applying.
Form IAA must be completed, and a witness statement must be written. To the court, present the paperwork and the statement.
A charge of £155 is required.
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A hearing will be scheduled for you the same day or within the next few days.
You present your case to a registrar or district judge at the hearing.
If the respondent objects to you receiving a validation order, they will state their argument.
And At the conclusion of the all the above, you will:
Liquidity refers to a person’s ability to satisfy his or her financial obligations right away. The link between a company’s cash assets and those assets that may be swiftly converted into cash, as well as the liabilities awaiting payment, determines the degree of liquidity. If sufficient liquidity is maintained, and funds are held idle merely to maintain liquidity and are not invested, this circumstance may result in losses.
If liquidity is retained at a high level out of concern of not being able to satisfy financial obligations on time, and the money available are not invested, losses and no returns on the funds available are almost certain.
If all available funds are invested without regard for even the most basic demand of liquidity/cash, in the event of an emergency, the financial obligations made may fail to meet the deadline, resulting in losses in the form of a penalty or a very high rate of interest.
Banks’ Liquidity and Cash Management: In the case of banks, investments are made with cash on hand, as well as deposits received from the public, companies, institutions, and all other types of demand and term deposits. In addition, a portion of the bank’s profit is available. The key issue is that every Principal liquidation in Access Bank is required by law to pay the deposits it holds pursuant to the conditions of the obligation.
Banks should always keep demand deposits on hand so that they can make fast payments if a demand arises. This fact necessitates that every bank maintain sufficient liquidity to meet contractual commitments as and when they occur.
Now, the inverse or opposing picture appears to be true, because every bank wants to put as much money as possible into advances and investments in the hopes of earning the best potential returns. If all of a bank’s money is lent or invested, the Principal liquidation in Access Bank may not be able to satisfy its obligations to its clients if the funds are not returned quickly.
Banks must establish a liquidity/investment policy to be able to repay depositors on demand in order to keep their client base. If a bank invests all of its capital in loans or investments without considering the amount of liquidity required to meet immediate financial needs, particularly those of demand depositors, it risks tarnishing its reputation, which can be catastrophic for a bank.
Yes, if a bank, in order to protect its image and be able to meet all demand requirements immediately, keeps a large portion of its funds in liquid form, either in cash or in deposits with the Central Bank, i.e., RBI, without earning sufficient returns or at a low rate of interest, it will inevitably face a situation of insolvency.
Principal liquidation in Access Bank use the following steps to manage their cash and liquidity:
Read more: Laws of Sale of properties