Section 113. Solvency statement

(1) A solvency statement shall be made by the directors—

(a) in a manner as may be determined by the Registrar;

(b) stating—

(i) the date on which the statement is made; and

(ii) the name of each director making the statement; and

(c) which shall be—

(i) signed by each director making the statement; and

(ii) supported by a declaration to the effect that the directors have made an inquiry into the affairs of the company.

(2) A solvency statement referred to in subsection (1) shall be made by—

(a) in the case of a transaction relating to a reduction of share capital or redemption of preference shares, all of the directors; and

(b) in the case of a transaction relating to a financial assistance or share buyback, the majority of the directors.

(3) A solvency statement in relation to a transaction is a statement that each director making the statement has formed the opinion that the company satisfies the solvency test in relation to the transaction.

(4) In forming an opinion for the purpose of making a solvency statement, a director shall—

(a) inquire into the company’s state of affairs and prospects; and

(b) take into account all the liabilities of the company, including contingent liabilities.

(5) Where a company proposes to purchase its own shares under a share buyback, the directors shall make a declaration that—

(a) it is necessary for the company to buy back its own shares; and

(b) the share buyback is made in good faith and in the interests of the company.