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Section 472 of The Companies Act No. 17 of 2015: Directors’ statement and auditor’s report

    

(1) The company’s directors shall make a statement that complies with subsection (2).
(2) A statement complies with this subsection only if it specifies the amount of the permissible capital payment for the relevant shares and states that, having made full inquiry into the affairs and prospects of the company, the directors have formed the opinion—
(a) with respect to its initial situation immediately following the date on which the payment out of capital is proposed to be made—that there will be no grounds on which the company could then be found unable to pay its debts; and
(b) with respect to the company's prospects for the year immediately following that date—that, having regard to—
(i) their intentions with respect to the management of the company’s business during that year; and
(ii) the amount and character of the financial resources that will in their view be available to the company during that year, the company will be able to continue to carry on business as a going concern (and will accordingly be able to pay its debts as they fall due) throughout that year.
(3) In forming their opinion for the purposes of subsection (2)(a), the directors shall take into account all of the company's liabilities (including any contingent or prospective liabilities).
(4) The directors shall ensure that their statement contains such information with respect to the nature of the company's business as is prescribed by regulations made for the purposes of this section.
(5) The directors shall attach to their statement the report prepared by the company's auditor in accordance with subsection (6).
(6) To enable the directors to comply with subsection (5), the company's auditor shall prepare a report addressed to the directors stating that— (a) the auditor has inquired into the company's financial position;
(b) the auditor is satisfied that the amount specified in the statement as the permissible capital payment for the relevant shares is properly determined in accordance with sections 468 to 471; and
(c) the auditor is not aware of anything to indicate that the opinion expressed by the directors in their statement as to any of the matters referred to in subsection (3) is unreasonable in all the circumstances.

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Disclaimer: This document is not to be taken as legal advise.

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