As a company Director you have more than likely signed an annual solvency resolution, but have you wondered what it is that you are signing?

The solvency resolution is an important annual requirement of company directors to attend to as it is a requirement of the Corporations Act.

Specifically, section 347a of the Corporations Act 2001 requires that the Directors of a company must pass a solvency resolution within two months after each review date for the company.

Additionally, in accordance with the Corporations Act 2001, the Directors of the company have an obligation to pass a solvency resolution within two months of each review date. If the Directors do not pass a solvency resolution – positive or negative – within two months after the review date, then the company is obliged to notify ASIC within 7 days after the end of the two-month period following the review date.

In summary a solvency resolution is a requirement of company director’s annually. It is important to know your annual review date. You may incur fees or penalties if this is not done.

If you are unsure of these requirements or need further advice, please contact us for assistance.

We offer a full corporate secretarial service that takes the confusion out of this for company Directors as we handle the entire process for you annually.

This blog is intended to give an overview of the legal issues involved and does not constitute legal advice. It is important that you consider appropriate legal advice that suits your circumstances.

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