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Iternal vs. external reconstruction

Abhishek Kumar (student) (371 Points)

18 January 2014

what are the difference between internal vs. external reconstruction?

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Sandeep H.R (student) (35 Points)
Replied 29 January 2014

In the case of internal reconstruction, company negotiate with its creditors and reduces the amount of liability towards them (which is to be paid them). More than that in this case there is no question of formation of new company. And balance sheet must contain the word "AND REDUCED". IN CASE of external reconstruction, new company will be incorporated to take over the business of existing company.