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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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If you have any questions about What Is The Statement Of Affairs In A Voluntary Liquidation then Contact Us as soon as possible for advice. Our expertise is at your fingertips.

Disclaimer: Statement Of Affairs In A Voluntary Liquidation

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.

Frequently asked questions

What information is required for the Statement of Affairs?

Assets

List of Company Assets
Current valuation

Details of Company Bank Account(s)

  • Account Number(s) and Sort Code(s)
  • Address and telephone number(s) of Bank
  • Exact amount in each account

Directors

  • Full names
  • Address
  • Any loans to the company: Were the loans to be repaid (i.e. as a debt owing from the company) or was it financed through the issue of new shares at a premium (i.e. as equity being released in the company)?

Shareholders

  • Full names
  • Address
  • Break down of shares held i.e. Ordinary shares and share premium
  • Loans to the company: Were they to be repaid (i.e. as a debt owing from the company) or was it financed through the issue of new shares at a premium (i.e. as equity being released in the company)?

Creditors

  • Full names of all creditors (including Government departments if any)
  • Addresses
  • Full amount owed to them
  • Any secured creditors (i.e. Bank loans, mortgages)
  • References used by Creditors

Debtors

  • Full names of all debtors (including Government departments if any)
  • Addresses
  • Full amounts owed to the company
  • References used by Debtors

Employees of the company

  • Names of all employees at date of liquidation
  • Age
  • Date of Birth
  • Annual Salary
  • Notice Period
  • Number of days holiday per year
  • Number of days taken
  • Start of holiday year
  • Any pension contributions
  • Date employees last paid
  • Date made redundant

Landlord

Details of Landlord and full amount owing to them

Pension

  • Full Particulars of all company pension schemes, including;
  • Details of Scheme Trustee(s)
  • Membership
  • Policy number
  • Scheme provider
  • Nature of Scheme; defined benefit or money purchase

 Security

  • Full Particulars of any security granted by the company by way of fixed and or floating charge

Transactions

  • Details of any transactions between the Company, any of its subsidiaries, or any other company in which it has or had an interest and any one or more of the directors or associate(s) of them within the year leading up to the winding up resolution.

Who prepares the Statement of Affairs?

Typically this will be done by the Insolvency Practitioner’s firm on your behalf after obtaining information from you and your accountants. Alternatively, you and your accountants can prepare it.

What happens if creditors claim for more monies than detailed on the Statement of Affairs?

The Insolvency Practitioner will adjudicate the claims of creditors, so if people claim for more money than what is showing on the Statement of Affairs, it is not a problem. The important aspect of this is that the information you put in the Statement of Affairs should be accurate to the best of your knowledge and belief.