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What is the statement of affairs in a voluntary liquidation all about?

The Statement of Affairs in a Creditors Voluntary Liquidation or a Members Voluntary Liquidation is an up to date financial position of a company. A Statement of Affairs is a bit like an up to date balance sheet prepared on a break up basis but there is more information required.

What Information Is Included In The Statement Of Affairs In A Voluntary Liquidation?

The information that needs to be included within the Statement of Affairs is a document that typically sets out the following information as set out in Section 99 of the Insolvency Act 1986 for a Creditors Voluntary Liquidation:

  • assets
  • liabilities
  • list of creditors with names and addresses and the amount of their debt
  • details of secured creditors and show which assets their debt holds security over

From the information in the statement of affairs subject to the costs and expenses of the Liquidation which are not included, the creditors should have an idea of what will be recovered as a consequence of the Liquidation. The break up and book value of the assets should be information provided to enable the same.

In the case of a Members Voluntary Liquidation, the requirement is confined to contain a statement of the company’s assets and liabilities.

Is it An Estimate?

A Statement of Affairs is not a document that is provided in round sums so it is not intended to be full of estimates.

Necessarily, the estimated to realise values of the assets disclosed in the Statement of Affairs will be estimated. However, those values should be backed up by some reliable valuations that are capable of being justified. As such it makes sense for some of the more material assets for the same to be professionally valued.

The requirement is that the numbers it contains will be accurate because it is supported by a Statement of Truth in a Creditors Voluntary Liquidation. In the case of a Members Voluntary Liquidation it is in effect supported by a a sworn Statutory Declaration of Solvency.

Penalty For Failing To Prepare A Statement Of Affairs In A Voluntary Liquidation

In the case of a Creditors Voluntary Liquidation the penalty for a Director who fails to prepare a Statement of Affairs is potentially serious. It is an offence and a Director is liable to a fine.

What Next?

If you are considering a Creditors Voluntary Liquidation then we at Oliver Elliot can help you with the process. Contact Us for a Free Initial Consultation to consider your options.

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Disclaimer

This page should not be relied upon as legal advice and it is not legal advice. This article is provided for information purposes only. You can Contact Us on the specific facts of your case to obtain relevant advice via a Free Initial Consultation.