Section 625 - Declaration Of Solvency

(1) Where on or after the commencement of this Act, it is proposed to wind up a company voluntarily, the directors of the company or, in the case of a company having more than two directors, the majority of the directors, may at a meeting of the directors make a statutory declaration to the effect that they have made a full inquiry into the affairs of the company and that, having do so, they have formed the opinion that the company will be able to pay its debts in full within a period, not exceeding 12 months from the commencement of the winding up, as is specified in the declaration.

(2) A declaration made under subsection (1) does not have effect for the purposes of this Act unless it -

(a) is made within the five weeks immediately preceding the date of the passing of the resolution for winding-up the company and the statutory declaration and resolution are delivered to the Commission for registration within 15 days after passing the resolution; and

(b) embodies a statement of the company's assets and liabilities as at the latest practicable date before the making the declaration.

(3) A director of a company making 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 specified in the declaration, commits an offence and is liable on conviction to a fine as the Court deems fit or to imprisonment for a term of three months, or to both, and if the company is wound-up under a resolution passed within the period of five weeks after making the declaration, and if its debts are not paid or provided for in full within the period stated in the declaration, it is presumed, until the contrary is shown, that the director did not have reasonable grounds for his opinion.

(4) A winding-up in any case where a declaration has been made and delivered in accordance with this section, shall in this Act be referred to as "a members' voluntary winding-up" and a winding up in any case where a declaration has not been made and delivered as aforesaid shall in this Act be referred to as "a creditors' voluntary winding up".

(5) Subsections (1) - (3) shall not apply to a winding up commenced before the commencement of this Act.