Preferential creditors as Indian company act 1956?

Answer 1

Preferential Creditors

Preferential Creditors are creditors whose claims rank higher in priority than those of ordinary/unsecured creditors. Section 285 of the 1963 Companies Act provides that the following creditors be classified as preferential (the Act defines "relevant date" as being the date of the winding up resolution or the date of the winding up order or the date of appointment of a Receiver under a floating charge).

All Corporation Tax, Capital Gains Tax and Income Tax assessed on the company up until 5 April prior to the relevant date, together with interest. The Revenue Commissioners will select the largest outstanding year for each Tax.

1. Income Tax Deductions on payments for sub-contractors in the 12 months before the relevant date.
2. VAT for the six complete taxable periods ending within the 12 months before the relevant date together with interest.
3. PAYE for the period of 12 months before the relevant date together with interest.
4. PRSI for the period of 12 months before the relevant date.
5. Wages and salaries for the employees in the four months before the relevant date, subject to a maximum of €3,174.
6. All accrued holiday pay - no money or time limit.
7. All compensation payable to an employee on termination of employment where the statutory minimum notice of termination has not been given.
8. Statutory Redundancy lump-sums.
9. Compensation awarded by the Employment Appeals Tribunal in respect of unfair dismissals.
10. Sick pay to an employee pursuant to any sick pay schemes.
11. Company contributions and contributions deducted from employees in respect of any pension schemes.
12. Damages and costs due to an employee as a result of an accident to the extent that it is not covered by insurance.
13. Subject to limitations, money advanced to pay wages, salaries, holiday pay, sick pay or pension contributions by a bank or a third party.
14. Local rates struck within 12 months before the relevant date. (but not water rates).