In the event of the liquidation of a company, the first to be settled are?

In the event of the liquidation of a company, it means that the company is shutting down and needs to pay off its debts. When a company goes into liquidation, it has to sell off its assets to pay back the money it owes to different people or entities.

In this question, we are asked who gets paid first when a company goes into liquidation. The correct answer is debenture holders, which is Option A.

Debenture holders are individuals or institutions that have lent money to the company by purchasing debentures. Debentures are a type of long-term loan that a company can issue to raise funds. Debenture holders have a legal claim on the company's assets and are considered creditors.

When a company goes into liquidation, the assets are sold off, and the money raised is used to pay off the company's debts. Debenture holders have a higher priority in getting paid back compared to other stakeholders because they have a legal claim on the company's assets. They are usually paid before other creditors, such as preference shareholders and ordinary shareholders.

Members of the board, option B, are the individuals who are responsible for managing the company's affairs. They do not have priority in getting paid back when a company goes into liquidation.

Preference shareholders, option C, are individuals who have a stake in the company but have a lower priority in getting paid back compared to debenture holders. They are usually paid after debenture holders but before ordinary shareholders.

Ordinary shareholders, option D, are individuals who own shares in the company. They have the lowest priority in getting paid back when a company goes into liquidation. They are usually paid last, after all other stakeholders have been settled.

In summary, when a company goes into liquidation, the first to be settled are debenture holders because they have a legal claim on the company's assets. They are followed by other creditors, such as preference shareholders, and finally, ordinary shareholders.