Solvency ResolutionA Solvency Resolution is a declaration made by a company’s directors that the company is able or unable to pay their debts as they fall due.
In accordance with the Corporations Act 2001, the majority of decisions your company makes must be made using a resolution. In order for your resolution to comply with these laws, the document must be signed by all shareholders who are entitled to vote.
It’s important to remember that despite the fact legislation allows you to pass a resolution in this way, your company constitution or shareholders agreement may require a different process. For example, your constitution might state that shareholders must hold a meeting for all resolutions. Therefore it is recommended that you review these documents first to check whether your company has a specific procedure regarding passing resolutions.
Use this Resolution If:
- You want to formally acknowledge that the company is solvent.
- All relevant directors agree the company is solvent.
- Your company constitution or shareholder’s agreement does not have any conflicting procedures concerning passing resolutions
What does this Resolution cover?
- Confirms the company is solvent/
- Signatures by the relevant directors confirming the company’s solvency.