This is our annual reminder on solvency resolutions.
Solvency resolutions
Directors of Fiji incorporated companies must pass a solvency resolution within two months of the company’s financial year-end. As most companies’ financial years coincide with calendar years, solvency resolutions for those companies must be passed by 28 February 2025. If your company’s year-end is a different date, the resolution must be passed within two months of that date.
This resolution is not required for:
- foreign companies registered in Fiji (i.e branches), or
- Fiji companies which lodge annual reports under Part 32 of the Act.
Positive or negative?
A solvency resolution may be positive or negative:
(a) if (as in most cases) the company is positive (ie the company is in a position to pay its debts as they fall due) the directors need only to record the resolution in the company minute book and do nothing more.
(b) if the resolution is negative (ie that the directors consider the company is not currently in a position to pay its debts as they fall due), then the Registrar of Companies must be informed within seven days of the resolution being passed.
If the resolution is not passed in time
If the company is solvent but does not pass the resolution within the two-month deadline, then the company must notify the Registrar by filing the prescribed form, within seven days of the end of the two-month period.
Our 2019 Solvency Resolution Reminder Alert sets out some of the relevant law in more detail.
Please contact Glenis Yee, Janice Fong or Jesline Singh for further information on this Alert.
Disclaimer
The information and opinions in this Legal Alert are for general information purposes only. They are not intended as specific legal or other professional advice and should not be relied upon or treated as a substitute for specific advice. Munro Leys can accept no responsibility for any loss arising from reliance on the general information contained in this Legal Alert.