declaration of solvency

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A declaration made by the directors of a company seeking voluntary liquidation that it will be able to pay its debts within a specified period, not exceeding 12 months from the date of the declaration. It must contain a statement of the company's assets and liabilities, and a copy must be sent to the Registrar of Companies. A director who participates in a declaration of solvency without reasonable grounds will be liable to a fine or imprisonment on conviction. See members' voluntary liquidation.

Subjects: Financial Institutions and Services.

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