Companies Act 2014 section 204

Declaration to be made in the case of a reduction in company capital or variation of company capital on reorganisation

Section 204 sets out the specific information that must be included in a directors' declaration when a company seeks to reduce its share capital or transfer or dispose of assets as part of a corporate reorganisation under the summary approval procedure.

• The declaration must describe the circumstances, nature and beneficiaries of the proposed transaction, along with the company's total assets and liabilities at a date no more than three months before the declaration and the anticipated position immediately after the activity takes place.
• The directors making the declaration must confirm that, after a full inquiry into the company's affairs, they believe the company will be able to pay its existing debts and liabilities in full as they fall due during the twelve months following the activity.
• The directors must also confirm they are not aware of any material, extraordinary future liability the company might incur within twelve months of the declaration date.
• A copy of the declaration must be filed with the Registrar within 21 days of the restricted activity commencing; if this deadline is missed, the court may nonetheless declare the activity valid if it considers it just and equitable to do so.