—(1) Where it is proposed to wind up a company voluntarily, the directors of the company, or in the case of a company having more than 2 directors, the majority of the directors shall, in the case of a members’ voluntary winding up before the date on which the notices of the meeting at which the resolution for the winding up of the company is to be proposed are sent out, make a declaration to the effect that they have made an inquiry into the affairs of the company, and that, at a meeting of directors, have formed the opinion that the company will be able to pay its debts in full within a period not exceeding 12 months after the commencement of the winding up.
(2) There shall be attached to the declaration a statement of affairs of the company showing, in the prescribed form —
the assets of the company and the total amount expected to be realised therefrom;
the liabilities of the company; and
the estimated expenses of winding up,
made up to the latest practicable date before the making of the declaration.
(3) A declaration so made shall have no effect for the purposes of this Act unless it is —
made at the meeting of directors referred to in subsection (1);
made within 5 weeks immediately preceding the passing of the resolution for voluntary winding up; and
lodged with the Registrar before the date on which the notices of the meeting at which the resolution for the winding up of the company is to be proposed are sent out.
(4) A director, who makes a declaration under this section without having reasonable grounds for the opinion that the company will be able to pay its debts in full within the period stated in the declaration, shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $5,000 or to imprisonment for a term not exceeding 12 months or to both.
(5) If the company is wound up in pursuance of a resolution for voluntary winding up passed within a period of 5 weeks after the making of the declaration, but its debts are not paid or provided for in full within the period stated in the declaration, it shall be presumed until the contrary is shown that the director did not have reasonable grounds for his opinion.
[UK, 1948, s. 283; Aust., 1961, s. 257]