A Statement of Affairs (SOA) is a document produced by the company directors for use in a Creditors’ Voluntary Liquidation (CVL).
The Statement of Affairs is presented to the company’s creditors during a physical creditors’ meeting if one is held or is sent to creditors if deemed consent or a virtual meeting is to be used to approve the CVL. Once the Statement of Affairs has been presented to the company’s creditors, it will then be registered at Companies House where it is available for public view.
Intended to show a Company’s Position Prior to Liquidation
A Statement of Affairs is intended to show a company’s position prior to liquidation. It details the company’s assets and liabilities as well as any fixed or floating charges that are secured against company assets.
It also contains the full details of all the company’s creditors, including their names and addresses and the value of their claims. There will also be the details of employees or ex-employees who are owed money by the insolvent company and any advance payments that have been paid by customers for goods and services.
The Statement of Affairs also includes an estimate of the realisable value of company assets alongside their book value. As a result, it shows the creditors how much there could be left from the sale of assets to pay the company’s creditors. For this reason, the document is of interest to company creditors, shareholders and the liquidator, but also potential buyers.
The Role of the SOA in Company Investigations
Potentially, the SOA can also have some impact on the insolvency practitioner’s investigation into the conduct of the company directors. It is the responsibility of the company directors to produce the Statement of Affairs. Failure to do so is likely to negatively affect the opinion of the directors’ conduct in the liquidation. For this reason, it is advisable to seek assistance from professional experts when preparing this complex document.
Do you need help preparing a Statement of Affairs? Perhaps you’d like to discuss whether a Creditors’ Voluntary Liquidation is right for you? Whatever your circumstances, please call 08000 746 757 or email: [email protected] for the no-obligation assistance you need.