Declaration of solvency

A summary statement showing the assets and liabilities of a company together with a statement that the company will be able to pay its debts together with interest and costs within 12 months of the liquidation commencing. It is required in a Member’s Voluntary Liquidation to demonstrate that the company is solvent. It is sworn by the majority or all (where they number less than 2) of directors. Making an incorrect declaration (i.e. where the business is insolvent) can have severe consequences.