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As enacted
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Part IV · Shares and Debentures Prospectus

57. Solvency test

Official English translation. Where it differs from the Sinhala or Tamil text, the Act itself says which text prevails.

(1)

A company shall be deemed to have satisfied the solvency test, if—

(a)

it is able to pay its debts as they become due in the normal course of business; and

(b)

the value of the company’s assets is greater than —

(i)

the value of its liabilities; and

(ii)

the company’s stated capital.

(2)

In determining whether a company satisfies the solvency test, the board—

(a)

shall take into account the most recent financial statements of the company prepared in accordance with section 151 of the Act ;

(b)

shall take into account circumstances the directors know or ought to know which affect the value of the company’s assets and liabilities ;

(c)

may take into account a fair valuation or other method of assessing the value of assets and liabilities.

Read on from s 58

Part V

Shareholders and Their Rights and Obligations

Read on from Part V

Part VI

Registration of Charges Registration of Charges with Registrar

Read on from Part VI

Part VII

Management and Administration Registered Office

Read on from Part VII

Part VIII

Amalgamations

Read on from Part VIII

Part IX

Compromises with Creditors

Read on from Part IX

Part X

Approval of Arrangements, Amalgamations, and Compromises by Court

Read on from Part X

Part XI

Provisions Relating to Offshore Companies

Read on from Part XI

Part XII

Winding Up

Read on from Part XII

Part XIII

Administrators Appointment of Administrator

Read on from Part XIII

Part XIV

Floating Charges

Read on from Part XIV

Part XV

Receivers and Managers

Read on from Part XV

Part XVI

Registrar-General of Companies and Registration Appointment of Officers

Read on from Part XVI

Part XVII

Application of Act to Existing Companies

Read on from Part XVII

Part XVIII

Overseas Companies

Read on from Part XVIII

Part XIX

Advisory Commission

Read on from Part XIX

Part XX

Companies Disputes Board

Read on from Part XX

Part XXI

Offences Miscellaneous Offences

Read on from Part XXI

Part XXII

Miscellaneous Prohibition of Partnership with More Than Twenty Members

Read on from Part XXII

Part XXIII

Repeals and Amendments

Read on from Part XXIII

Schedules