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CS Professional · Corporate Restructuring, Valuation and Insolvency · Voluntary Liquidation

Meghna Engineering Ltd was incorporated three years ago. Its directors file a declaration of solvency for voluntary liquidation. Which financial documents must accompany the declaration as to period covered?

The declaration must be accompanied by audited financial statements and a record of business operations for the previous two years, or since incorporation if that is later, along with a registered valuer's asset valuation report, if any is prepared. A company three years old therefore gives two years.

  1. AAudited financial statements and record of business operations for the previous two years, together with a valuation report of assets, if any, prepared by a registered valuerCorrect
  2. BAudited financial statements for the last five years, with a valuation report from any chartered accountant
  3. CUnaudited financial statements for the previous year and a list of creditors
  4. DAudited financial statements for the previous two years only, with no valuation report in any case

Explanation

Section 59(3)(b) requires audited financial statements and record of business operations for the previous two years or the period since incorporation, whichever is later, plus a registered valuer's report on assets, if any is prepared. Since the company is three years old, the two-year period is later. Five years or unaudited statements are not what the Code requires.

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