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
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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

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Jurisdiction(s):
United Kingdom
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Key definition:
statutory declaration definition
What does statutory declaration mean?

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

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