A Declaration of Solvency is a statutory document signed by the majority of a company’s directors before a Members Voluntary Liquidation can proceed. By signing, the directors declare that they have made a full inquiry into the company’s affairs and are of the opinion that the company will be able to pay its debts in full within a period not exceeding twelve months from the start of the liquidation. The declaration must be supported by a statement of the company’s assets and liabilities. Signing a Declaration of Solvency without reasonable grounds is a criminal offence in Ireland, so directors should only proceed on the basis of proper financial advice.
