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Declaration of Solvency
The directors must thoroughly review
the financial position of the company and when satisfied they
swear an affidavit known as a 'declaration of solvency'.
That declaration sets out:
- the estimated realisable value
of the companys assets
- the value of creditors claims
- an estimate of the cost of the
liquidation process
- and a balancing figure being
the estimated monetary return to shareholders after all
creditors have been paid in full and the costs of the process
have been settled.
Appointment of Liquidator
Once the declaration of solvency has
been signed there is then very little further formality. Certain
forms have to be signed at a shareholders meeting to resolve
to wind up the company and appoint a liquidator.
The Liquidator
The liquidator so appointed:
- advertises his appointment
- realises all assets
- settles creditors
- pays the costs of the proceedings
- returns the surplus to the shareholders
When all of these actions have
been completed the liquidator calls a final meting of shareholders
to provide a report on all of his actions and a receipts and
payments account to particularise the transactions undertaken
by him.
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