Section 420 of The Companies Act No. 17 of 2015: What is a solvency statement?
(1) A solvency statement is a statement that each of the directors—
(a) has formed the opinion, as regards the company's situation at the date of the statement, that no ground exists on which the company could then be found to be unable to pay (or otherwise discharge) its debts; and
(b) has also formed the opinion—
(i) if it is intended to commence the liquidation of the company within twelve months after that date—that the company will be able to pay (or otherwise discharge) its debts in full within twelve months of the commencement of the liquidation; or
(ii) in any other case, that the company will be able to pay (or otherwise discharge) its debts as they fall due during the year immediately following that date.
(2) In forming those opinions, the directors shall take into account all the company’s liabilities (including any contingent or prospective liabilities).
(3) The directors shall ensure that the solvency statement contains the prescribed information (if any) and states— (a) the date on which it is made; and
(b) the name of each director of the company.
(4) If the directors make a solvency statement without having reasonable grounds for the opinions expressed in it, and the statement is lodged with the Registrar, each of the directors who is in default commits an offence and on conviction is liable to a fine not exceeding one million shillings.
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