Solvency Test

published by admin on Tue, 03/06/2012 - 12:22

57. (1) A company shall be deemed to have satisfied the solvency test, if—

(a) it is able to pay its debts as they become due in the normal course of business; and

(b) the value of the company’s assets is greater than —

(i) the value of its liabilities; and

(ii) the company’s stated capital.

 (2) In determining whether a company satisfies the solvency test, the board—

(a) shall take into account the most recent financial statements of the company prepared in accordance with section 151 of the Act ;

(b) shall take into account circumstances the directors know or ought to know which affect the value of the company’s assets and liabilities ;

(c) may take into account a fair valuation or other method of assessing the value of assets and liabilities.