Declaration of Solvency
A Declaration of Solvency must be submitted to start the company’s voluntary winding up.
The company’s directors must first submit the Declaration of Solvency via the BizFile+ website to the Accounting and Corporate Regulatory Authority (ACRA).
The following should be included in the Declaration of Solvency:
- The directors have looked into the business issues of the company; and
- The board agreed during a meeting that the company would be able to pay all of its debts in full within a year of starting the winding-up process.
Directors who make this declaration without having sufficient justification for such an opinion violate the law and may be subject to a $5,000 fine, up to 12 months in jail, or both.
A statement of affairs must accompany the Declaration of Solvency. This declaration must be made as of the latest date practical before the making of the Declaration and must demonstrate the following:
- The assets of the business and the anticipated proceeds from those assets;
- Liabilities of the business; and
- The anticipated costs of closing.
Statement of Affairs must be per Form VWU-9, which is available on The Insolvency Office of the Ministry of Law’s website.
A special resolution to wind up the firm must be passed within five weeks after the Declaration of Solvency is submitted to ACRA. For that, the members of the firm will vote to approve the extraordinary resolution during an Extraordinary General Meeting (EGM).
Following the adoption of the special resolution, the firm is required to:
- Place a copy of the resolution for voluntarily winding up with ACRA within seven days after its passage; and
- Give notice of the resolution in the Gazette and at least one local daily newspaper in English within 10 days of its passage.
To wind up its affairs and disperse its assets, the corporation also needs to appoint a liquidator. Unless the liquidator accepts their continuation, all of the company’s directors’ powers expire once they are selected as the liquidator.