Statutory Declaration Of Solvency
A Statutory Declaration of Solvency is required in a Members Voluntary Liquidation.
Why Is A Statutory Declaration Of Solvency Required?
What is the Statutory Declaration Of Solvency? This is a requirement in a Members Voluntary Liquidation in light of Section 89 of the Insolvency Act 1986.
Declaration Of Solvency By The Directors
The Declaration of Solvency must be undertaken by a majority of the Directors. The Directors must declare that having made a full enquiry of the company’s finances that it can in their opinion pay its debts in full, with interest within 12 months.
What Are The Requirements Of A Statutory Declaration Of Solvency?
A declaration of Solvency must be made within 5 weeks of the date of the passing of a winding up resolution for Members Voluntary Liquidation.
It must have a statement of the company assets and liabilities at the last realistic date before the making of the declaration of solvency.
Filing Of The Statutory Declaration Of Solvency
The filing of the Statutory Declaration of Solvency must be undertaken within 15 days of the passing of the winding up resolution for Members Voluntary Liquidation.
Impact On Timing Of A Distribution To Shareholders
There is no impact or influence arising from the Statutory Declaration of Solvency on the timing of a distribution to company shareholders.
Except if there are no assets to distribute and no creditors, a Statutory Declaration of Solvency highlights that according to the Directors’ declaration there ought to be in their view a distribution made. However, it is no substitute for the Liquidator going through the statutory procedures.
The timing of a distribution is typically influenced amongst other things by Rule 14.30(c)(ii) of the Insolvency Rules (England and Wales) Rules 2016. As a result a distribution typically will not be made less than 21 days prior to the date of the winding up resolution being passed.
In practical terms, the distribution usually would have to await HMRC clearance which can explain why a Members Voluntary Liquidation can sometimes take so long.
GET IN TOUCH FOR HELP
For a free no obligation chat about any of the matters detailed above, please do get in touch for help. An expert will call you back or if you prefer exchange emails.
We can explore your situation and consider the best way to help you and your business needs. You can call us 020 3925 3613 or fill in the form below and will get back to you quickly. We Know Insolvency Inside Out.
What Next?
Expert Advice Is Just A Click Away
If you have any questions in relation to What Is The Statutory Declaration Of Solvency? then contact us as soon as possible for advice. Oliver Elliot offers a fresh approach to insolvency and the liquidation of a company by offering specialist advice and services across a wide range of insolvency procedures.
Our expertise is at your fingertips.
Disclaimer
This page is not legal advice and is not to be relied upon as such. This article is provided for information purposes only. You should take independent advice on the facts of your case. No liability is accepted for reliance upon this post.
Recent Posts / View All Posts
There are occasions when tax law achieves something seemingly rather remarkable: it manages to be perfectly logical and yet may arguably produce some inconsistency at the same time. The recent…
The recent Float Capital Ltd, In the Matter Of EWHC 1891 (Ch) judgment is not simply another decision about insolvency practitioners' remuneration. It is a reminder that where the normal commercial…
The case of Henderson & Jones Ltd v Chambers & Anor (Re Priors Group Ltd) EWHC 1152 (Ch) involved dismissal of a summary judgment application issued by the applicant who…
Disclosure is an important part of litigation. At its core, it serves to function as a means of furthering attempts at a fair trial. The consequences of inadequate disclosure can…
