Insolvency Act · 2022 Revised Edition · Chapter II
71. Statutory declaration of solvency
Official textFrom Attorney General's Chambers, unchanged
Where it is proposed to wind up a company voluntarily, the directors (or, in the case of a company having more than two directors, the majority of them) may at a directors’ meeting make a statutory declaration to the effect that they have made a full inquiry into the affairs of the company and that, having done so, they have formed the opinion that the company will be able to pay its debts in full, together with interest within such period, not exceeding 12 months from the commencement of the winding up, as may be specified in the declaration.
company
“company” means a company incorporated or registered under the Companies Act;
Insolvency 74
insolvency
“insolvency”, in relation to a company, includes the approval of a voluntary arrangement or the appointment of a judicial manager;
Such a declaration by the directors has no effect for purposes of this Act unless —
it is made within the 5 weeks immediately preceding the date of the passing of the resolution for winding up, or on that date but before the passing of the resolution; and
it embodies a statement of the company’s assets and liabilities as at the latest practicable date before the making of the declaration.
The declaration shall be delivered to the Registrar before the expiration of 15 days immediately following the date on which the resolution for winding up is passed.
A director making a declaration under this section without having reasonable grounds for the opinion that the company will be able to pay its debts in full, together with interest, within the period specified is guilty of an offence and liable on conviction to a fine not exceeding $10,000, imprisonment for a term not exceeding 2 years or both.
If the company is wound up in pursuance of a resolution passed within 5 weeks after the making of the declaration, and its debts (together with interest) are not paid or provided for in full within the period specified, it is to be presumed (unless the contrary is shown) that the director did not have reasonable grounds for his opinion.
If a declaration required by subsection (3) to be delivered to the
Registrar is not so delivered within the time prescribed by that subsection, the company and every officer in default is liable to a fine not exceeding
$1,000, and in the case of a continuing offence, with a further fine not exceeding $50 for every day or part thereof during which the offence continues after conviction.
Terms defined in s 3
company
Defined · s 3“company” means a company incorporated or registered under the Companies Act;
insolvency
Defined · s 3“insolvency”, in relation to a company, includes the approval of a voluntary arrangement or the appointment of a judicial manager;
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