Insolvency Practitioners Regulation (Amendments) Act 2019

  • This version was replaced on 29 September 2020 to make corrections to Schedules 1 and 3 under section 25(1)(j)(iv) of the Legislation Act 2012.
33 New section 243A inserted

The following section is inserted after section 243:

243A Directors’ declaration that debts will be paid within 12 months

(1)

This section applies to a company if—

(a)

a liquidator is appointed under section 241(2)(a) or (b); and

(b)

before the appointment of the liquidator, a copy of a declaration described in this section is made by a majority of the company’s directors and delivered to the Registrar for registration.

(2)

The declaration must—

(a)

be to the effect that the directors have made an inquiry into the affairs of the company and have formed the opinion, on reasonable grounds, that the company will be able to pay its debts in full within a period of not more than 12 months after the appointment of the liquidator; and

(b)

be in writing; and

(c)

be made within 20 working days before the appointment of the liquidator; and

(d)

include a statement of the affairs of the company that contains the prescribed information and shows, as at the latest practicable date before the making of the declaration,—

(i)

the property of the company, and the total amount expected to be realised from that property; and

(ii)

the liabilities of the company; and

(iii)

the estimated expenses of the liquidation.

(3)

A director who makes a declaration under this section without having reasonable grounds for their opinion that the company will be able to pay or otherwise provide for its debts within the period stated in the declaration commits an offence and is liable on conviction to the penalty set out in section 373(2).

(4)

If, at any time, the liquidator considers, or has reasonable grounds to consider, that the company will not be able to pay or otherwise provide for its debts in full within the period stated in the declaration,—

(a)

this section ceases to apply to the company; and

(b)

the liquidator must, as soon as practicable, notify the Registrar that this section no longer applies to the company.

(5)

A liquidator who fails to comply with subsection (4)(b) commits an offence and is liable on conviction to the penalty set out in section 373(2).

(6)

The fact that this section ceases to apply to a company does not limit or affect subsection (3).