§ 215I — Solvency statement in relation to amalgamating company and offence for making false statement

215I.—(1) For the purposes of section 215C(2)(b), “solvency statement”, in relation to an amalgamating company, means a statement by the board of directors of the amalgamating company that it has formed the opinion —(a)

that, as regards the amalgamating company’s situation at the date of the statement, there is no ground on which the amalgamating company could then be found to be unable to pay its debts; and

(b)

that, at the date of the statement, the value of the amalgamating company’s assets is not less than the value of its liabilities (including contingent liabilities),

being a statement which complies with subsection (2).

(2) The solvency statement —(a)

if the amalgamating company is exempt from audit requirements under section 205B or 205C, must be in the form of a written declaration; or

(b)

if the amalgamating company is not such a company, must be in the form of a written declaration or must be accompanied by a report from its auditor that the auditor has inquired into the affairs of the amalgamating company and is of the opinion that the statement is not unreasonable given all the circumstances.[36/2014]

(3) In forming an opinion for the purposes of subsection (1)(a) and (b), the directors must take into account all liabilities of the amalgamating company (including contingent liabilities).

(4) In determining, for the purposes of subsection (1)(b), whether the value of the amalgamating company’s assets is or will become less than the value of its liabilities (including contingent liabilities), the board of directors of the amalgamating company —(a)

must have regard to —(i)

the most recent financial statements of the amalgamating company that comply with section 201(2) and (5), as the case may be; and

(ii)

all other circumstances that the directors know or ought to know affect, or may affect, the value of the amalgamating company’s assets and the value of the amalgamating company’s liabilities (including contingent liabilities); and

(b)

may rely on valuations of assets or estimates of liabilities that are reasonable in the circumstances.[36/2014]

(5) In determining, for the purposes of subsection (4), the value of a contingent liability, the board of directors of the amalgamating company may take into account —(a)

the likelihood of the contingency occurring; and

(b)

any claim the amalgamating company is entitled to make and can reasonably expect to be met to reduce or extinguish the contingent liability.

(6) Any director of an amalgamating company who votes in favour of or otherwise causes a solvency statement under this section to be made without having reasonable grounds for the opinions expressed in it shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $100,000 or to imprisonment for a term not exceeding 3 years or to both.

—(1) For the purposes of section 215C(2)(b), “solvency statement”, in relation to an amalgamating company, means a statement by the board of directors of the amalgamating company that it has formed the opinion —(a)

that, as regards the amalgamating company’s situation at the date of the statement, there is no ground on which the amalgamating company could then be found to be unable to pay its debts; and

(b)

that, at the date of the statement, the value of the amalgamating company’s assets is not less than the value of its liabilities (including contingent liabilities),

being a statement which complies with subsection (2).

(2) The solvency statement —(a)

if the amalgamating company is exempt from audit requirements under section 205B or 205C, must be in the form of a written declaration; or

(b)

if the amalgamating company is not such a company, must be in the form of a written declaration or must be accompanied by a report from its auditor that the auditor has inquired into the affairs of the amalgamating company and is of the opinion that the statement is not unreasonable given all the circumstances.[36/2014]

(3) In forming an opinion for the purposes of subsection (1)(a) and (b), the directors must take into account all liabilities of the amalgamating company (including contingent liabilities).

(4) In determining, for the purposes of subsection (1)(b), whether the value of the amalgamating company’s assets is or will become less than the value of its liabilities (including contingent liabilities), the board of directors of the amalgamating company —(a)

must have regard to —(i)

the most recent financial statements of the amalgamating company that comply with section 201(2) and (5), as the case may be; and

(ii)

all other circumstances that the directors know or ought to know affect, or may affect, the value of the amalgamating company’s assets and the value of the amalgamating company’s liabilities (including contingent liabilities); and

(b)

may rely on valuations of assets or estimates of liabilities that are reasonable in the circumstances.[36/2014]

(5) In determining, for the purposes of subsection (4), the value of a contingent liability, the board of directors of the amalgamating company may take into account —(a)

the likelihood of the contingency occurring; and

(b)

any claim the amalgamating company is entitled to make and can reasonably expect to be met to reduce or extinguish the contingent liability.

(6) Any director of an amalgamating company who votes in favour of or otherwise causes a solvency statement under this section to be made without having reasonable grounds for the opinions expressed in it shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $100,000 or to imprisonment for a term not exceeding 3 years or to both.