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much is owed and to whom, with a list of all creditors and shareholders being included.
The Statement of Affairs serves a further purpose at the end of the insolvency procedure, being used as part of the subsequent investigation into the conduct of directors leading up to company insolvency.
Failure by the directors to provide a Statement of Affairs during insolvency could lead to a fine, but will also negatively affect the Insolvency Practitioner’s opinion of their conduct overall.
The existence of this document also aids in monitoring how much money has been realised from each asset sale, and allows comparison with estimates provided by the IP.
[See ‘Insolvency Practitioner’, ‘IP’ and ‘Liquidation’.]
A statement of assets and liabilities is made up by directors at the beginning of a Members’ Voluntary Liquidation (MVL), and is a snapshot of the company’s assets and liabilities at the time of the swearing of the declaration of solvency under section 89 Insolvency Act 1986.
It is the MVL equivalent of the Statement of Affairs made up by the directors in, for example, a Creditors’ Voluntary Liquidation (CVL) [See ‘Members’ Voluntary Liquidation’, ‘MVL’, ‘Insolvency Act’, ‘Statement of Affairs’, ‘CVL’ and ‘Director’.]
A statement of concurrence is a statement, verified by a statement of truth, that a person concurs in the Statement of Affairs submitted by a nominated person(s) (which will be the directors in a Liquidation).
It is appropriate where not all of the directors are responsible for the making up of the statement of affairs, but they are all responsible for its content.
[See ‘Statement of Affairs’, ‘Statement of Truth’, ‘Liquidation’ and ‘Director’.]
