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Old 8th May 2009 | 19:57
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IO540
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From: EuroGA.org
A very fine line, Kalleh.

It isn't actually very hard to run a business so the creditors can be paid off, prob99.

A charitable situation is where the company has just one or two big debtors (customers), both on credit accounts, and one goes bust. Then paying off the suppliers could get a little tricky... But flying schools don't work like that. Their "debtors" are students (or renters) paying cash that day. So, practically, anybody in that business who goes down without paying off creditors has been financing their business using money borrowed from creditors, which is legal (to the extent that one cannot and should not outlaw the concept of a limited company) but IMHO unethical. And it's widespread - almost every school that shuts down has taken student deposits with it.
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