Question on: JAMB Commerce - 2024
In the event of winding up of a company, who among the following is paid last?
A
Preference Shareholders
B
Ordinary shareholders
C
Cumulative preference shareholders
D
Debenture holders
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Correct Option: B
In the winding up of a company, the order of payment is as follows (from first to last):
- Secured creditors
- Unsecured creditors (including debenture holders)
- Preference shareholders
- Ordinary shareholders
Ordinary shareholders are paid last because they represent the residual ownership of the company, and receive what is left after all other claims are settled.
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