What is a statutory declaration of solvency and what happens if a false declaration of solvency is made?


Produced in partnership with Robert Smailes of Leonard Curtis Business Solutions Group & Simon Hunter of Three Stone
Practice notes

What is a statutory declaration of solvency and what happens if a false declaration of solvency is made?


Produced in partnership with Robert Smailes of Leonard Curtis Business Solutions Group & Simon Hunter of Three Stone

Practice notes
imgtext

Statutory declaration of solvency

A company enters voluntary liquidation when its members vote to do so by a special resolution. For further information, see Practice Note: What is a members’ voluntary liquidation and when is it typically used?

Before the members can vote on a resolution, the directors of the company must assess whether the company can pay its debts in full, together with interest at the official rate (defined in section 251 of the Insolvency Act 1986 (IA 1986)), within no more than 12 months from the commencement of the winding-up. If the company can do this, it can be placed into members’ voluntary liquidation (MVL). If it cannot, it should enter creditors’ voluntary liquidation (CVL). For further information, see Checklist: Directors' due diligence questionnaire and guidance before swearing a statutory declaration of solvency for a members' voluntary liquidation.

The statutory declaration of solvency required by IA 1986, s 89 to place a company

Powered by Lexis+®
Jurisdiction(s):
United Kingdom
Related legal acts:
Key definition:
statutory declaration definition
What does statutory declaration mean?

a declaration made before a Commissioner for Oaths in a prescribed form;

Read more readmore

Popular documents

What is a statutory declaration of solvency and what happens if a false declaration of solvency is made?

What is a statutory declaration of solvency and what happens if a false declaration of solvency is made?Statutory declaration of solvencyA company enters voluntary liquidation when its members vote to do so by a special resolution. For further information, see Practice Note: What is a members’

In what circumstances can a CVA be proposed and by whom?

In what circumstances can a CVA be proposed and by whom?What is a CVA?A company voluntary arrangement (CVA) is a binding arrangement made between a company and its creditors (Part I of the Insolvency Act 1986 (IA 1986)). It is the corporate equivalent of the individual voluntary arrangement (IVA).

A company subject to a winding-up petition settles the petition debt prior to advertisement and agrees

A company subject to a winding-up petition settles the petition debt prior to advertisement and agrees with the petitioning creditor that an order will be sought at the hearing dismissing the petition. Notwithstanding non-advertisement of the petition, if a third party creditor indicates its

Dissolution of a company following compulsory liquidation or creditors' voluntary liquidation

Dissolution of a company following compulsory liquidation or creditors' voluntary liquidationCompulsory liquidation or winding up by the courtWhere the Official Receiver is appointedOn the making of a winding-up order by the court, the official receiver (OR) is appointed as liquidator.When the OR