Before a company can be would up by its shareholders, its directors must make a declaration of solvency.This is a declaration that:

Question

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A declaration of solvency is a statement made by the directors of a company that they believe the company will be able to pay its debts in full within 12 months after the commencement of the winding up. This statement is required before the company can be wound up voluntarily by its shareholders. Option A is incorrect as it refers to the opposite of what a declaration of solvency means. Option C is also incorrect as it assumes that the company has no debts, which is not a requirement for making a declaration of solvency. Option D is also incorrect as it contradicts the purpose of a declaration of solvency.

Before a Company Can Be Would Up by Its Shareholders