On 26/05/2013,
you requested for the version in force on 26/05/2013
incorporating all amendments published on or before 26/05/2013.
The closest version currently available is that of 18/04/2013.
7A.
—(1) In this Act, unless the context otherwise requires, “solvency statement”, in relation to a proposed redemption of preference shares by a company out of its capital under section 70, a proposed giving of financial assistance by a company under section 76(9A) or (9B) or a proposed reduction by a company of its share capital under section 78B or 78C, means a statement by the directors of the company —
(a)
that they have formed the opinion that, as regards the company’s situation at the date of the statement, there is no ground on which the company could then be found to be unable to pay its debts;
(b)
that they have formed the opinion —
(i)
if it is intended to commence winding up of the company within the period of 12 months immediately following the date of the statement, that the company will be able to pay its debts in full within the period of 12 months beginning with the commencement of the winding up; or
(ii)
if it is not intended so to commence winding up, that the company will be able to pay its debts as they fall due during the period of 12 months immediately following the date of the statement; and
(c)
that they have formed the opinion that the value of the company’s assets is not less than the value of its liabilities (including contingent liabilities) and will not, after the proposed redemption, giving of financial assistance or reduction (as the case may be), become less than the value of its liabilities (including contingent liabilities),
being a statement which complies with subsection (2).
[21/2005]
(2) The solvency statement —
(a)
if the company is exempt from audit requirements under section 205B or 205C, shall be in the form of a statutory declaration; or
(b)
if the company is not such a company, shall be in the form of a statutory declaration or shall be accompanied by a report from its auditor that he has inquired into the affairs of the company and is of the opinion that the statement is not unreasonable given all the circumstances.
[21/2005]
(3) In forming an opinion for the purposes of subsection (1)(a) and (b), the directors of the company must take into account all liabilities of the company (including contingent liabilities).
[21/2005]
(4) In determining, for the purposes of subsection (1)(c), whether the value of the company’s assets is or will become less than the value of its liabilities (including contingent liabilities) the directors of the company —
(a)
must have regard to —
(i)
the most recent financial statements of the company that comply with section 201(1A), (3) and (3A), as the case may be; and
(ii)
all other circumstances that the directors know or ought to know affect, or may affect, the value of the company’s assets and the value of its liabilities (including contingent liabilities); and
(b)
may rely on valuations of assets or estimates of liabilities that are reasonable in the circumstances.
[21/2005]
(5) In determining, for the purposes of subsection (4), the value of a contingent liability, the directors of a company may take into account —
(a)
the likelihood of the contingency occurring; and
(b)
any claim the company is entitled to make and can reasonably expect to be met to reduce or extinguish the contingent liability.
[21/2005]
(6) A director of a company who makes a solvency statement without having reasonable grounds for the opinions expressed in it shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $100,000 or to imprisonment for a term not exceeding 3 years or to both.
[21/2005]
[UK, Bill, 2002, Clause 63; Companies, s. 76F (4) to (6)]