Ontario Barrister and Solicitor Practice Exam

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Study for the Ontario Barrister and Solicitor Exam. Quiz with flashcards and multiple choice questions, each with hints and explanations. Prepare for your legal career!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

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What occurs when a company enters receivership?

It merges with another company to avoid debt.
A creditor takes control of assets to settle debts.
It becomes exempt from paying its debts.
The owners regain control after debt restructuring.

The correct answer is: A creditor takes control of assets to settle debts.

When a company enters receivership, it means that a creditor, usually a bank or financial institution, takes control of the company's assets in order to sell them off and use the proceeds to pay off the company's debts. This is typically done when a company is unable to repay its debts on its own and the creditor wants to avoid bankruptcy. Options A, C, and D are incorrect as they do not accurately describe the process of entering receivership.