In force2020 Revised Edition

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Insolvency, Restructuring and Dissolution Act 2018 · 2020 Revised Edition · Part 8 · Winding Up

163. Declaration of solvency

(1)

Where it is proposed to wind up a company voluntarily pursuant to a members’ voluntary winding up, the directors of the company or, in the case of a company that has more than 2 directors, the majority of the directors must, before the date on which the notices of the meeting at which the resolution for the winding up of the company is to be proposed are sent out, make a declaration to the effect that —

(a)

they have made an inquiry into the affairs of the company; and

(b)

at a meeting of directors, they have formed the opinion that the company will be able to pay its debts in full within a period not exceeding 12 months after the commencement of the winding up.

(2)

There must be attached to the declaration a statement of affairs of the company showing, in the prescribed form —

(a)

the assets of the company and the total amount expected to be realised from those assets;

(b)

the liabilities of the company; and

(c)

the estimated expenses of the winding up,made up to the latest practicable date before the making of the declaration.

(3)

A declaration so made has no effect for the purposes of this Act unless it is —

(a)

made at the meeting of directors mentioned in subsection (1);

(b)

made within 5 weeks immediately before the passing of the resolution for voluntary winding up; and

(c)

lodged with the Registrar of Companies before the date on which the notices of the meeting at which the resolution for the winding up of the company is to be proposed are sent out.

(4)

A director, who makes a declaration under this section without having reasonable grounds for the opinion that the company will be able to pay its debts in full within the period stated in the declaration, shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $5,000 or to imprisonment for a term not exceeding 12 months or to both.

(5)

If the company is wound up pursuant to a resolution for voluntary winding up passed within a period of 5 weeks after the making of the declaration, but its debts are not paid or provided for in full within the period stated in the declaration, it is to be presumed until the contrary is shown that the director did not have reasonable grounds for the opinion that the company will be able to pay its debts in full within the period stated in the declaration.