Learn about the purpose and content of a Statement of Affairs in insolvency proceedings and how it helps assess a company’s financial position.

What’s a Statement of Affairs in Insolvency?

A Statement of Affairs (SOA) is an important document within the insolvency process that provides an overview of assets and liabilities[1]Trusted Source – GOV.UK – Guidance on requiring and submission of statements of affairs and further accounts. It is prepared by the liquidator and must be verified by a statement of truth.

Its basic use is to provide a concise summary of the business situation for creditors, shareholders, and the insolvency practitioner.

This document lists all of the company’s assets, liabilities, and other pertinent financial information, including details of any fixed or floating charges secured on company assets.

Once completed, the Statement of Affairs must be filed at Companies House by the Insolvency Practitioner and is available for public view.


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What is Included in a Statement of Affairs?

Here’s what a typical Statement of Affairs document will include:

  1. Basic Company Details: For companies, it includes the registered name, address, company number, and the names of directors.
  2. All assets owned by the individual or company. Assets are classified as either realisable or non-realisable. Realisable assets are those that can be converted into cash (e.g., property, vehicles, inventory, machinery, patents, investments, and cash in hand or in bank accounts). Non-realisable assets might include items that cannot be easily sold or are exempt from sale.
  3. Liabilities: This part details all the debts owed at the date of insolvency, including secured debts (e.g., mortgages, charges over assets), preferential debts (such as certain taxes and employee-related debts), unsecured debts (e.g., loans, credit cards, trade creditors), and contingent liabilities (potential debts that depend on a future event).
  4. Security Interests: Information on any assets that are subject to security interests (e.g., collateral for loans) and their estimated value.
  5. Deficiency Account: A summary that reconciles the assets and liabilities, showing the net deficit that remains after all assets have been accounted for against the liabilities.
  6. Book Debts: Details of any money owed to the insolvent entity by its customers or clients, if applicable.
  7. List of Creditors: This is a detailed list of creditors, including the nature of their claims, the amount owed, and any security held by them.
  8. Employees: Information on any outstanding payments due to employees, including wages, salaries, and redundancy payments.
  9. Director’s Loan Account: For companies, details of any loans to or from directors.
  10. Summary: A summary sheet that provides an overview of the total assets, claims, and the expected return to creditors.

The government provides a template for a Statement of Affairs (company winding-up) which you can find here [2]Trusted Source – GOV.UK – Rule 7.41 Statement of Affairs (company winding-up).

Which Insolvency Events Require an SOA?

The SOA document is used in the following insolvency events:

How is a Statement of Affairs Presented in Liquidation?

During voluntary liquidation, the Statement of Affairs is presented at the initial creditors’ or shareholders’ meeting, which must be held within 14 days of the liquidator’s appointment[2]Trusted Source – GOV.UK – Rule 7.41 Statement of Affairs (company winding-up).

For compulsory liquidation, the SOA is submitted to the liquidator or the Official Receiver early in the process, often before the first meeting of creditors. Legally, directors must submit the SOA to the official receiver within 21 days of the winding-up order being made.

The official receiver will then present the SOA to creditors at the initial creditors’ meeting, which must be held within 12 weeks of the winding-up order.

What’s the Relevance of the SOA for the Investigations into Directors’ Conduct?

One key function of the statement of affairs is to provide a transparent audit trail so that insolvency practitioners can establish whether assets were sold in the period preceding liquidation.

The liquidator or official receiver will analyse the SOA and compare it with the company’s records and other available information. Discrepancies or irregularities may point to potential offences committed by the directors, such as:

  • Trading while insolvent
  • Fraudulent trading
  • Misfeasance or breach of fiduciary duties
  • Falsification of company records

Where this is found to be the case, it can lead to a director’s disqualification in some instances.

>>Read our full article on the directors conduct report

What Happens if You Refuse to Produce an SOA?

In the case of failure to submit the SOA without a reasonable excuse, the nominated person is liable to a one-off fine of £5,000 and/or a daily default fine set by the court (£500).

Help from Company Debt

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FAQs on Statement of Affairs

Yes, if errors are found or if additional information comes to light after the initial submission, amendments can be made with the approval of the insolvency practitioner overseeing the process.

The Statement of Affairs, once filed at Companies House, becomes a public document. Creditors, shareholders, and potential buyers of the insolvent company can access this information.

The Statement of Affairs helps insolvency practitioners trace the company’s financial movements and asset disposals.

It highlights any owed wages, redundancy pay, or other entitlements as liabilities, prioritising them in the order of repayment in line with insolvency regulations.

Yes, contingent liabilities, or debts that might become due based on future events, are included, providing a fuller picture of potential financial obligations.


The primary sources for this article are listed below, including the relevant laws and Acts which provide their legal basis.

You can learn more about our standards for producing accurate, unbiased content in our editorial policy here.

  1. Trusted Source – GOV.UK – Guidance on requiring and submission of statements of affairs and further accounts
  2. Trusted Source – GOV.UK – Rule 7.41 Statement of Affairs (company winding-up)