Make a Declaration of Solvency (UK)

Note: Links to our free templates are at the bottom of this long guide.
Also note: This is not legal advice

Introduction

Declaring solvency is a critical step for any business or individual in the UK facing financial troubles. Whilst it may feel like a last resort, it could be the most effective way to manage debt and other financial obligations in order to gain some protection and relief going forward. This article will outline why declaration of solvency is important, how it can provide security, and what steps can ensure the process runs smoothly.

Declaration of solvency is a legal procedure that requires an evaluation of assets, liabilities and overall financial position in order to determine insolvency. This helps to provide clarity around any outstanding debt as well as preventing creditors from bringing any form of legal action against an individual or business with whom they have an agreement. In essence, making this declaration offers some much-needed protection from creditors and a clean slate financially speaking.

It’s not just individuals or businesses that benefit from declaration of solvency; creditors also stand to gain from the announcement being made. By knowing that someone has taken proactive steps towards managing their debt responsibly, creditors are more likely to receive payment quicker - something which all parties hope for! Moreover, having this process enshrined in law helps protect creditors interests further by ensuring legally enforceable debt can still be handled even when things become difficult financially for those involved.

Finally, declaration of solvency ensures everyone involved has proper oversight over their finances so that nothing goes amiss during the negotiations between parties concerned with outstanding payments owed. It provides reassurance and security to both sides while avoiding costly legal battles too - something no one wants!

In conclusion then, declaration of solvency is essential for anyone struggling financially in the UK. It offers protection from creditors while providing clarity on outstanding debts and other obligations both sides are responsible for fulfilling; plus it also gives everyone peace-of-mind knowing that their finances are being properly managed without fear of legal action if needed! So if you’re ever considering signing up for Declaration of Solvency consider using Genie AI’s free template library – with millions data points teaching AI what market-standard documents look like you’ll have access to high quality templates without ever needing a lawyer – allowing you get back on track quickly & efficiently! Read on below for our step-by-step guidance on how you can use our service today!

Definitions

Declaration of Solvency: A document stating that a company is able to pay its debts, as required by law in some jurisdictions.
Jurisdiction: The geographical area or authority under which a particular law applies.
Creditor: A person or entity to whom a debt is owed.
Shareholder: An individual or entity that owns a portion of a company.
Liabilities: Debts, obligations, or other financial obligations that a company or individual is responsible for.
Assets: Anything of value owned by an individual or company.
Proof of Service: Documentation that shows that a legal document has been received and acknowledged by the intended recipient.
Relevant Parties: Any individuals or entities that may be impacted by a legal document or decision.
Relevant Authorities: Any governmental or legal entities that must approve, accept, and enforce a legal document.

Contents

1. Understanding the Financial Responsibility of a Declaration of Solvency
2. Researching the legal requirements of a Declaration of Solvency
3. Examining the potential financial implications of making a Declaration of Solvency
4. Preparing for a Declaration of Solvency
5. Gather financial documents and records
6. Calculate the company’s liabilities and assets
7. Appoint a person to be responsible for making the Declaration of Solvency
8. Preparing the Documents and Information Needed for a Declaration of Solvency
9. Draft the Declaration of Solvency
10. Obtain signatures from all relevant parties
11. Ensure the document is properly filed with the relevant authorities
12. The Process of Making a Declaration of Solvency
13. Obtain permission from the court or other relevant body
14. Submit the Declaration of Solvency to the relevant body
15. Provide proof of service to the relevant parties
16. Receive confirmation of acceptance or rejection of the Declaration of Solvency
17. The Consequences of Making a Declaration of Solvency
18. Understand the legal implications of making a Declaration of Solvency
19. Consider the potential impact on creditors and shareholders
20. How to Find Help With a Declaration of Solvency
21. Research advisors who specialize in Declaration of Solvency
22. Contact relevant legal and financial professionals for assistance
23. Executing the Declaration of Solvency
24. Obtain all required signatures
25. File the Declaration of Solvency with the relevant authorities
26. Monitoring and Maintaining the Declaration of Solvency
27. Ensure that all relevant parties are aware of the Declaration of Solvency
28. Monitor the financial status of the company and adjust the Declaration of Solvency as needed
29. Rescinding or Amending the Declaration of Solvency
30. Understand the process for rescinding or amending the Declaration of Solvency
31. Prepare the necessary documents and information
32. Submit the request to the relevant authorities
33. Summary and Conclusion
34. Review the key points of the Declaration of Solvency
35. Consider the implications of making a Declaration of Solvency
36. Outline any remaining steps and considerations

Get started

Understanding the Financial Responsibility of a Declaration of Solvency

• Read and understand the Companies Act 2006 (Part 15) and the Insolvency Act 1986 (Section 74) to become familiar with the legal requirements for a Declaration of Solvency
• Understand the potential implications of making a Declaration of Solvency, such as directors’ potential personal liability if the company is unable to pay its debts
• Understand that the company’s financial position must be sound in order to make a Declaration of Solvency
• Know that a Declaration of Solvency is a legally binding document

After completing these steps, you will have a solid understanding of the financial responsibility and potential implications of making a Declaration of Solvency, and you can move on to the next step.

Researching the legal requirements of a Declaration of Solvency

• Research the Companies Act 2006 and any other relevant legislation to understand the legal requirements of a Declaration of Solvency
• Read up on any recent case studies or judgments related to Declarations of Solvency to gain more insight
• Consult a solicitor or other legal expert to ensure all necessary legal requirements are met
• Once research is complete and all legal requirements understood, you can move on to the next step.

Examining the potential financial implications of making a Declaration of Solvency

• Analyze the company’s current financial situation, including its assets, liabilities, and cash flows
• Assess the potential financial implications of the Declaration of Solvency, including the risk of insolvency
• Consider the impact of the Declaration of Solvency on the company’s ability to pay creditors
• Seek professional advice in order to understand the potential financial implications of making the Declaration of Solvency
• Review the company’s financial records to ensure they are accurate and up-to-date

When you can check this off your list and move on to the next step:

• Once you have a full understanding of the financial implications of making a Declaration of Solvency, you can move on to the next step in the process.

Preparing for a Declaration of Solvency

• Estimate the company’s assets and liabilities
• Consider the company’s expected income and expenditure
• Review the company’s financial history and performance
• Determine the company’s current solvency

When you have made estimates of the company’s assets and liabilities, considered its expected income and expenditure, reviewed its financial history and performance, and determined its current solvency, you can move on to the next step of gathering financial documents and records.

Gather financial documents and records

• Collect the company’s financial documents such as bank statements, accounts, invoices, and other relevant financial records.
• Ensure that all records are up to date and accurate.
• Once all financial documents and records have been collected, you can move on to the next step.

Calculate the company’s liabilities and assets

• Examine company financial documents, such as balance sheets, profit and loss statements, and cash flow statements
• Calculate the company’s total liabilities and total assets
• Compare the total liabilities to the total assets to determine the solvency of the company
• When you have completed the calculation, you will know the company’s solvency and can move on to the next step.

Appoint a person to be responsible for making the Declaration of Solvency

• Choose an individual who is familiar with the financial records of the company and is able to accurately assess and calculate the company’s assets and liabilities
• This individual should be able to make a statement of solvency to the best of their knowledge, and sign the document as a declaration of solvency
• Once the individual has been chosen and accepted their responsibility, you can check this off your list and move on to the next step of preparing the documents and information needed for a declaration of solvency.

Preparing the Documents and Information Needed for a Declaration of Solvency

• Obtain the financial statements of the company for the past three years
• Obtain the company’s balance sheet for the current year
• Obtain the company’s projections for the next three years
• Obtain a list of all assets, liabilities and contingent liabilities of the company
• Obtain a list of all creditors, including their names and addresses
• Obtain a list of all shareholders, including their names and addresses
• Verify that all the above information is accurate and up-to-date

When you have all of the above documents and information, you can move on to the next step - drafting the Declaration of Solvency.

Draft the Declaration of Solvency

• Gather all documents and financial information needed to draft the declaration
• Create a draft of the declaration using the provided template
• Check the draft against the proof of solvency criteria
• Make any necessary changes to the declaration
• Confirm that all of the content is accurate and up-to-date
• You’ll know you’ve completed this step when you have a finished draft of the declaration that meets the proof of solvency criteria.

Obtain signatures from all relevant parties

• Contact all parties involved in the declaration of solvency and arrange for them to sign the document.
• Ensure all parties sign the document at the same time to avoid any disputes.
• Collect all the signed documents in one place and check that all signatures have been obtained.
• Once all signatures have been collected, you can move on to the next step of filing the document with the relevant authorities.

Ensure the document is properly filed with the relevant authorities

• Ensure that the Declaration of Solvency has been fully completed and signed by the relevant parties.
• Check with the relevant authorities to ensure that the Declaration of Solvency is compliant with the required regulations and legislation.
• Submit the Declaration of Solvency to the relevant authorities.
• After the Declaration of Solvency has been accepted and filed, you can check this step off your list and move on to the next step.

The Process of Making a Declaration of Solvency

• Create a document that describes the company’s financial position and its ability to meet its liabilities as they fall due
• Include the details of the company’s assets and liabilities, along with any assumptions that have been made
• Have the document signed by the company directors
• File the document with the relevant authorities (e.g. Companies House)
• Once the document has been filed, a confirmation of its acceptance should be received
• This confirms the declaration of solvency has been accepted and is legally binding
• The process is complete and the company can move on to the next step

Obtain permission from the court or other relevant body

• Check the relevant legislation and regulations to determine which court or body you need to approach for permission
• Contact the relevant court or body and provide them with the necessary documentation
• Wait for the court or body to assess the application for permission and provide a response
• If the permission is granted, make a record of the permission and the date it was obtained
• Once you have obtained permission from the court or body, you can check this off your list and move on to the next step: submitting the Declaration of Solvency to the relevant body.

Submit the Declaration of Solvency to the relevant body

• Gather all documents and information necessary to complete the Declaration of Solvency.
• Prepare the Declaration of Solvency and ensure all information is accurate and complete.
• Submit the Declaration of Solvency to the relevant body, such as the court or other relevant authority.
• Keep a copy of the Declaration of Solvency for your records.
• You will know you have completed this step when you have received confirmation or acknowledgement of receipt of the Declaration of Solvency from the relevant body.

Provide proof of service to the relevant parties

• Contact the relevant parties, either by mail or email, to inform them of the declaration of solvency.
• Include a copy of the declaration in your communication.
• Keep records of all correspondence and communication with the relevant parties, including any acknowledgement of the declaration.
• Once the relevant parties have acknowledged the declaration of solvency, you can check this step off your list and move on to the next step.

Receive confirmation of acceptance or rejection of the Declaration of Solvency

• Contact the relevant parties to ensure the Declaration of Solvency has been received
• Ask each party to confirm their acceptance or rejection of the Declaration
• Record any responses you receive in writing
• Once all parties have responded, you will know if the Declaration has been accepted or rejected
• You can then check this step off your list and move on to the next step

The Consequences of Making a Declaration of Solvency

• Understand that a Declaration of Solvency places a personal debt on the directors of the company
• Be aware of the potential for legal action if you make a false declaration of solvency
• Understand that a Declaration of Solvency is binding on the directors and the company
• Recognize that the company may be liable to a penalty if the declaration is false or misleading
• It’s important to take advice from a qualified insolvency practitioner or lawyer before making a Declaration of Solvency

Once you have a full understanding of the consequences of making a Declaration of Solvency, you can check this step off your list and move on to the next step: Understand the legal implications of making a Declaration of Solvency.

Understand the legal implications of making a Declaration of Solvency

• Consult legal advice to understand the legal implications of making a declaration of solvency
• Review relevant legal documents and regulations to understand the legal obligations of making a declaration of solvency
• Be aware of any potential liabilities that may arise in making a declaration of solvency
• Obtain a full understanding of the legal implications and obligations of making a declaration of solvency before proceeding
• Once you have a full understanding of the legal implications and obligations of making a declaration of solvency, you can check this off your list and move on to the next step.

Consider the potential impact on creditors and shareholders

• Assess the company’s current financial position and the potential impact on creditors and shareholders of a Declaration of Solvency.
• Consider the longer-term effect a Declaration of Solvency may have on the company’s financial position.
• Assess the potential impact on the company’s ability to raise finance in the future.
• Consider the potential impact of a Declaration of Solvency on the company’s relationships with its creditors.

Once you have considered the potential impact on creditors and shareholders, you can check this off your list and move on to the next step.

How to Find Help With a Declaration of Solvency

• Search for specialist advisors who have experience with Declaration of Solvency requirements in the UK.
• Contact relevant advisors and ask for an estimate of the cost and time involved in working with them.
• Check their credentials to make sure they are qualified and experienced in the Declaration of Solvency process.
• Research online reviews to get a sense of their reputation and customer service.
• Compare estimates to find the best value for money.
• Once you have chosen an advisor, negotiate any terms or conditions.
• When you are happy with the advisor, sign a contract or agreement.

When you can check this off your list and move on to the next step:

• When you have found and agreed to work with a suitable advisor for the Declaration of Solvency process.

Research advisors who specialize in Declaration of Solvency

• Look for firms who specialize in insolvency, particularly those that are regulated by the Insolvency Practitioners Association (IPA)
• Review profiles and case studies of advisors to get an idea of their experience
• Check the advisor’s website to see if they mention the Declaration of Solvency specifically
• Ask the advisor if they have experience in filing a Declaration of Solvency
• Ask for references or contact their previous clients to get feedback on the services they offer

Once you have identified a few advisors with experience in Declaration of Solvency, you can move on to the next step.

Contact relevant legal and financial professionals for assistance

• Identify the necessary legal and financial professionals involved in making the Declaration of Solvency. These may include a qualified insolvency practitioner, accountant, barrister, and solicitor.
• Contact the professionals to obtain a quote for their services.
• Make arrangements to hire the professionals needed to assist in the Declaration of Solvency.
• When all the necessary advisors are hired, you can complete this step and move on to the next step.

Executing the Declaration of Solvency

• Prepare the document with all of the necessary information and declarations, and ensure that all of the requirements of the Companies Act 2006 have been met.
• Make sure to provide any additional information and documents requested by creditors, shareholders or the court.
• File the Declaration of Solvency with Companies House.
• You will know you have successfully completed this step when you have received confirmation from Companies House that the Declaration of Solvency has been successfully filed.

Obtain all required signatures

• Ensure that the Declaration of Solvency is signed by all the directors or the company secretary.
• Have the Declaration of Solvency witnessed and signed by a qualified accountant or lawyer.
• Check to make sure that all signatures are included in the document, and that all signatures are legible and valid.
• Once all signatures are obtained, the Declaration of Solvency is ready to be filed with the relevant authorities.

File the Declaration of Solvency with the relevant authorities

• Gather the original signed Declaration of Solvency document and any other required forms.
• Contact the court and/or other authorities to find out the correct filing procedure.
• Follow the instructions provided and submit the documents.
• Pay any required fees.
• Once the documents are accepted, you will receive a confirmation from the court or other authorities.
• Keep a copy of all documents for your records.

How you’ll know when this step is complete:

• You will have received a confirmation from the court or other authorities that the Declaration of Solvency has been filed.

Monitoring and Maintaining the Declaration of Solvency

• Monitor the company’s financial statements and ensure that the Declaration of Solvency remains up to date
• Keep any changes to the company’s financial situation or structure updated in the Declaration of Solvency
• Ensure that all relevant parties (e.g. creditors, shareholders, directors) are aware of any changes to the Declaration of Solvency
• Review the Declaration of Solvency regularly (at least every 6 months) to ensure that all relevant information is kept up to date
• When all information is up to date and all relevant parties are aware, you can check this step off your list and move onto the next step.

Ensure that all relevant parties are aware of the Declaration of Solvency

• Notify company directors, shareholders and creditors of the Declaration of Solvency
• Ask each party to sign the Declaration of Solvency
• File the signed Declaration of Solvency with Companies House
• Once each party has signed and the Declaration of Solvency has been filed with Companies House, the step is complete.

Monitor the financial status of the company and adjust the Declaration of Solvency as needed

• Monitor the financial status of the company on a regular basis
• Check that all financial information is up-to-date and accurate
• Compare the current financial status of the company to the information included in the Declaration of Solvency
• Make any necessary changes to the Declaration of Solvency based on the financial status of the company
• Ensure that any changes to the Declaration of Solvency are properly documented and filed

You can check this off your list and move on to the next step when all appropriate changes have been made to the Declaration of Solvency and all necessary documents have been filed.

Rescinding or Amending the Declaration of Solvency

• Seek advice from a qualified insolvency practitioner
• Consider the financial implications of rescinding or amending the Declaration of Solvency
• Notify all shareholders of the proposed changes
• Hold a meeting of creditors and shareholders to obtain approval
• Notify the Registrar of Companies and other relevant authorities of the changes
• File the appropriate documents with Companies House
• Monitor the financial status of the company and adjust the Declaration of Solvency as needed

You will know when you can check this off your list and move on to the next step when you have received approval from the Registrar of Companies and have filed the appropriate documents with Companies House.

Understand the process for rescinding or amending the Declaration of Solvency

• Contact the relevant Registrar of Companies to find out what documents and information are required to rescind or amend the Declaration of Solvency
• Familiarize yourself with the relevant legislation, such as the Companies Act 2006 and the Insolvency Act 1986
• Consider if there are any conflicts of interests between yourself and other creditors or shareholders
• When you have collected the necessary documents and information, you can move on to the next step of preparing them for submission.

Prepare the necessary documents and information

• Gather the company’s financial information, such as profit and loss accounts, balance sheets and cash flow statements
• Obtain copies of the company’s bank statements and other relevant documents
• Provide details of the company’s assets and liabilities
• Collect details of the company’s creditors, including their names and addresses
• Gather copies of the company’s invoices, contracts and other agreements
• If applicable, provide a copy of the company’s business plan

Once you have gathered all the necessary documents and information, you can move on to the next step.

Submit the request to the relevant authorities

• Contact the registrar at the Companies House to make the Declaration of Solvency.
• Provide the completed and signed documents, along with the appropriate fee.
• Wait for the Companies House to review and accept the Declaration of Solvency.
• You will receive confirmation once the Declaration of Solvency has been accepted.

Summary and Conclusion

• Review the key points of the Declaration of Solvency
• Make sure the content of the Declaration is accurate, complete and up to date
• Ensure that the Declaration meets the requirements of the relevant legislation
• Sign and date the Declaration
• Submit the Declaration to the relevant authorities
• Once the Declaration is submitted and accepted, you have completed the Declaration of Solvency process.

Review the key points of the Declaration of Solvency

• Understand the purpose of the Declaration of Solvency and the legal requirements before signing
• Ensure that the company has the ability to pay its debts as and when they fall due
• Confirm that the company has sufficient assets to pay its debts
• Check the accuracy of the data and information provided in the Declaration of Solvency
• Confirm that the Declaration of Solvency is legally binding and that all directors understand the implications
• When you have reviewed the key points of the Declaration of Solvency and are satisfied that it is accurate, you can check it off your list and proceed to the next step.

Consider the implications of making a Declaration of Solvency

• Understand the implications of making a Declaration of Solvency, such as the financial and legal responsibilities of directors
• Be aware of the potential consequences of declaring solvency, such as creditor claims and disqualification of directors
• Seek legal advice if needed to understand the implications fully
• Ensure the directors are aware of the consequences of making a Declaration of Solvency
• When you have considered the implications of making a Declaration of Solvency, you can check this step off your list and move on to the next step.

Outline any remaining steps and considerations

• Prepare a written statement of solvency that includes details of assets, liabilities, and details of the company’s financial position
• File the statement of solvency with Companies House
• Notify creditors of the company’s intention to make a Declaration of Solvency
• Give notice to creditors that they have 28 days to object to the Declaration
• Consider any objections and decide whether to amend or withdraw the Declaration
• Once the 28 days has expired, the company can submit the Declaration of Solvency to Companies House
• Once accepted by Companies House, the Declaration of Solvency is binding
• The company must then comply with the terms set out in the Declaration of Solvency
• The company must also monitor its financial position to ensure that it is able to comply with the Declaration of Solvency at all times
• Once the Declaration of Solvency has been accepted, the company must file an annual solvency statement with Companies House

FAQ

Q: What is a Declaration of Solvency?

Asked by Maria on 15th March 2022.
A: A Declaration of Solvency is a legal declaration which must be made by a company in the UK when the company is unable to pay its debts. It is a form of insolvency which is used to try and resolve the company’s financial difficulties and is often seen as a last resort. The declaration must be made by the directors of the company and must be presented to creditors at least seven days before a meeting of creditors is held. The purpose of this declaration is to provide creditors with information about the company’s financial situation and to allow them to make an informed decision about whether or not to accept an offer of payment or restructuring proposed by the company.

Q: Is there a difference between a Declaration of Solvency in the UK and other jurisdictions?

Asked by William on 6th April 2022.
A: Yes, there are subtle differences between the insolvency laws in different jurisdictions such as the UK, USA and EU. In the UK, a Declaration of Solvency is only applicable to companies registered in England and Wales. In contrast, in the USA, a Declaration of Solvency may also be applicable to companies registered in other states depending on their particular situation. Similarly, in the EU, different countries may have different insolvency laws which apply depending on where the company is incorporated.

Q: What are the implications for directors who make a Declaration of Solvency?

Asked by Ashley on 29th March 2022.
A: Directors who make a Declaration of Solvency are making a legally binding commitment to creditors that they will pay off any outstanding debts with their own money if necessary. This means that if the company fails to meet its obligations or if creditors do not accept an offer of payment or restructuring proposed by the directors, then they may be liable for any losses incurred as a result. Making this declaration is therefore a very serious decision and should not be taken lightly by directors. It is important that they seek professional advice before taking this step.

Q: What information must be included in a Declaration of Solvency?

Asked by Matthew on 23rd April 2022.
A: A Declaration of Solvency must include information about the company’s assets and liabilities, current trading results and foreseeable future trading prospects, any significant changes that have been made to the company’s business since it was last solvent and any other matters that could affect its solvency (such as any pending legal action). This information must be provided to creditors at least seven days before any meeting of creditors is held so that they can make an informed decision about whether or not to accept an offer of payment or restructuring proposed by the company.

Q: How does someone go about making a Declaration of Solvency?

Asked by Jessica on 18th April 2022.
A: Making a Declaration of Solvency involves completing certain forms provided by Companies House (in England and Wales) and submitting these along with all relevant supporting documents (such as financial statements) at least seven days before any meeting with creditors is held. It is important that all information provided is accurate and up-to-date as this will form part of the basis upon which any decisions made are based upon. It is also important for those making this declaration to seek professional advice before doing so in order to ensure that they meet all legal requirements and avoid potential personal liability for any losses incurred as a result.

Q: Are there any consequences for making false declarations?

Asked by Jacob on 27th April 2022.
A: Yes, it is against the law for anyone to knowingly make false statements or declarations when providing information relating to their company’s financial situation as part of a Declaration of Solvency process. This could result in criminal penalties being imposed upon those responsible including fines, imprisonment or both depending on the severity of the offence committed. Therefore it is important that all information provided as part of this process is accurate and up-to-date in order to avoid these potential consequences.

Q: How long do companies have after making this declaration before creditors must meet?

Asked by Sarah on 20th April 2022.
A: Companies who make this declaration must provide all relevant information (including financial statements) at least seven days before any meeting with creditors will take place so that they can make an informed decision about whether or not to accept an offer of payment or restructuring proposed by the company. Once creditors have had time to review all relevant documents, then they will decide when (or if) they wish to meet with representatives from the company in order to discuss potential solutions for resolving their financial difficulties.

Q: What happens if creditors reject an offer from directors?

Asked by David on 7th May 2022.
A: If creditors reject an offer from directors then it may mean that they have decided not to accept any resolution proposed by them and instead choose another option such as liquidation or administration instead. In this situation, it may be necessary for directors to consider other options such as seeking additional investment or restructuring their finances in order to try and resolve their financial difficulties without having to resort to insolvency proceedings such as liquidation or administration. Alternatively, if directors decide not to pursue either option then they may need to consider entering into voluntary liquidation proceedings instead (if it appears that this would be more beneficial than continuing trading).

Q: Can I use a third party provider for advice when making my Declaration of Solvency?

Asked by Elizabeth on 3rd June 2022.
A: Yes, you can use third party providers such as solicitors or insolvency practitioners when making your Declaration of Solvency as they will be able to provide you with expert legal advice which could help you avoid potential pitfalls during this process such as personal liability for any losses incurred as a result of misleading information being provided about your company’s financial situation. It may also be beneficial for you to use third party providers in order to ensure that your documents are completed correctly and submitted within the required timescales in order for your creditors to receive them seven days prior to any meeting being held with them regarding your proposed resolution plans.

Q: Is there an official government website where I can find out more about Declarations of Solvency?

Asked by Joseph on 13th May 2022.
A: Yes, there are several government websites which provide detailed information regarding Declarations of Solvency including Companies House (in England & Wales), Insolvency Service (in Scotland) and Companies Registration Office (in Northern Ireland). These websites contain detailed guidance notes which explain what companies need to do when making these declarations and provide practical advice on areas such as how best to prepare documents prior submission, what information needs providing as part of these declarations and what options may be available should creditors reject offers put forward by directors during negotiations with them regarding potential resolutions for resolving their financial difficulties.

Q: What happens if I do not make a Declaration of Solvency?

Asked by Michael on 1st July 2022.
A: If you do not make a Declaration of Solvency then you may face serious consequences such as being personally liable for any losses incurred due to your failure to declare your company’s financial situation accurately or within the required timescales set out under UK insolvency law (which requires all relevant documents including financial statements etc., need submitting at least seven days prior to any meeting being held with creditors). You may also face criminal penalties depending upon circumstances related details such as whether you knowingly withheld relevant information etc., so it is important that you seek professional advice prior taking this step in order ensure you meet legal requirements and avoid potential penalties associated with non-compliance with UK insolvency law.

Q: Can I appeal against decisions made regarding my Declaration of Solvency?

Asked by Christopher on 7th May 2022.
A: Yes, it is possible for companies who feel that decisions made regarding their Declarations of Solvency were unfair or unjustified can appeal against these decisions via judicial review proceedings which are conducted via courts in England & Wales (or other courts depending upon where your registered office) who will consider whether these decisions were made lawfully or not according UK insolvent law principles set out within The Insolvent Companies Regulations 1986 (as amended). However due complexities involved with judicial reviews, it may be advisable for companies considering taking this route seek professional advice first prior filing papers within court in order ensure that all steps taken during proceedings comply with legal requirements set out within relevant legislation/regulations governing insolvent companies within UK jurisdiction so that appeals stands best chance succeeding if lodged correctly/timely manner etc.,

                                         ### Q: Are there specific timescales associated with making Declarations Of Solvency?    Asked by Melissa on 19th June 2022   A: Yes, there are certain timescales associated with making Declarations Of Solvency which must be adhered too strictly otherwise individuals/companies risk facing penalties related non-compliance/breaching regulations set out within relevant legislation governing insolvent companies operating within UK jurisdiction such The Insolvent Companies Regulations 1986 (as amended). These timeframes include providing all relevant information/financial statements etc., at least seven days prior meeting being held between debtor/creditors where offer repayment/restructuring proposal put forward discussed such well submitting forms containing required details Companies House/other relevant authorities time specified therein regulations governing insolvent companies operating within UK jurisdiction so best practice adhered too minimise risk non-compliance/breaching regulations set out within Insolvent Companies Regulations 1986 (as amended).

Example dispute

Lawsuit for Breach of Declaration of Solvency

• A plaintiff may bring a lawsuit for breach of a declaration of solvency if the company has made a false statement in its declaration of solvency, or if the company has acted in a manner that is not consistent with the declaration of solvency.
• In the lawsuit, the plaintiff may seek to recover damages, including a return of any money or assets they have invested in the company.
• The plaintiff may also seek an injunction to prevent the company from continuing to make false statements in the declaration of solvency.
• The court may also order that the company pay the plaintiff’s legal fees and expenses.
• The court may also award punitive damages if it finds that the company has acted fraudulently or recklessly in making false statements in the declaration of solvency.
• The court may also award damages for any losses suffered as a result of the false statement.
• If the court finds that the company has acted in bad faith, it may also impose a penalty on the company for its breach of the declaration of solvency.

Templates available (free to use)

Standard Declaration Of Solvency Members Voluntary Liquidation

‍