Declaration of Solvency

In our article  here https://www.vinelegal.com.ng/2024/06/corporate-insolvency-in-nigerian.html

What is a Declaration of Solvency

• Where 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 so done, they have formed the opinion that the company will be able to pay its debts in full within such period, NOT EXCEEDING 12 MONTHS from the commencement of the winding up, as is specified in the declaration S. 625 of CA

Also referring to our previous article Voluntary winding-up is of two types, namely:

• Members voluntary winding-up; and
• Creditors voluntary winding-up.

Members Voluntary Winding Up happens in any case where a declaration of solvency has been made and delivered in accordance with the provisions above is referred to as a members’ voluntary winding up. On the other hand, Creditors Voluntary Winding Up occurs in any case where a declaration of solvency has NOT been made and delivered as aforesaid is referred to as a creditors voluntary winding up. See S.457 CAMA