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the directors may be held jointly and severally liable for the amounts in question (unless they prove that they acted in good faith, or individual directors can prove that they had protested such payment) [112] shareholders related to any of the directors held liable may also be declared liable for the amount they had received as payment [113]
Debt forgiveness can offer relief from overwhelming financial burdens, but it does have downsides. Debt forgiveness is only one option for managing difficulties with repayment.
Debt settlement (also called debt reduction, debt negotiation or debt resolution) is a settlement negotiated with a debtor's unsecured creditor. Commonly, creditors agree to forgive a large part of the debt: perhaps around half, though results can vary widely. When settlements are finalized, the terms are put in writing.
Corporations exist in part to shield the personal assets of shareholders from personal liability for the debts or actions of a corporation. Unlike a general partnership or sole proprietorship in which the owner could be held responsible for all the debts of the company, a corporation traditionally limited the personal liability of the shareholders.
Checkbox indicating if you were personally liable for the forgiven debt (Line 5) Event code identifier or the reason for the filing (Line 6) Fair market value of the property (if applicable) (Line 7)
This is commonly known as cancellation-of-debt (COD) income. According to the Internal Revenue Code , the discharge of indebtedness must be included in a taxpayer's gross income . [ 1 ] There are exceptions to this rule, however, so a careful examination of one's COD income is important to determine any potential tax consequences.
The Department announced plans to hold owners of private colleges personally liable for student loan debts left unpaid to the federal government, two days after advocating for student loan debt ...
This case preceded ss 40-1 of the Companies Act 2006, which give directors unlimited capacity to bind the company with those dealing in good faith; but if an action by a director is beyond their authority or in breach of some fiduciary obligation, then they can be made personally liable. Arguably therefore, Blaikie Bros would now have been able ...