It is a statutory requirement under the Insolvency Act 1986 to produce a Statement of Affairs (SOA) in a prescribed format in certain insolvency procedures. The document is generally prepared by a liquidator or appointed professional and then filed at Companies House, where it becomes available for public view.
A SOA is a picture of the company’s assets and liabilities as at the date of:
• Company Voluntary Arrangement
The SOA is effectively a balance sheet of the company, prepared on a break up rather than on a going concern basis, and provides detailed information for several interested parties such as creditors, shareholders, the Insolvency Practitioner, government agencies or even potential buyers.
A SOA must contain the following information:
• Debtor’s assets, debts and liabilities (book value and estimated to realise value of assets)
• Names and addresses of creditors
• Securities held by creditors
• Dates upon which the securities were given
• Any other information as may be prescribed
Since the document includes a professional opinion of the person completing it on how much can the assets be sold for or how much can be recovered, it shows how much will be available to pay creditors once assets have been sold. The SOA does not take account of costs of administering the sale.
The SOA serves another important purpose. It is used for the investigation into the conduct of the directors leading up to the insolvency of the company and into the affairs of the business by the Insolvency Practitioner as well as for monitoring performance in terms of how much money has been realised form each asset sale.
Failure to produce a SOA when required may result in fines and be a factor taken into account by the Department of Trade and Industry when considering whether a person is fit to be a company director in a disqualification proceeding.
|Procedure||Date prepared||Produced by|
|Administration||As at date of administration||Those who are or have been officers of the company|
|Administrative receivership||As at date of appointment||Those who are or have been officers of the company.|
Those in employment deemed able to give information
|Compulsory liquidation||At date of commencement||Officers of the company|
|Creditors voluntary liquidation||Not more than 14 days before date resolution to wind up||Directors|
|Company voluntary arrangement||Not more than 14 days before date of notice to nominee under||Directors|