This is our annual reminder to all Fiji companies about passing annual solvency resolutions. These are due within two months after the end of each financial year. Most Fiji companies use the calendar year as their financial year, meaning that annual solvency resolutions must be passed by 28 February in the following year.
A company is solvent if it is able to pay all its debts as and when they become due[1]. Fiji’s Companies Act 2015 requires directors of companies incorporated in Fiji to pass a solvency resolution within two months of the company’s financial year-end. This resolution is not required for
- Fiji companies who have lodged annual reports with the Registrar of Companies or
- foreign companies registered in Fiji (i.e. branch registration).
The law would generally require directors, before passing this resolution, to review the company’s accounts, cash at bank, cash flow forecasts, indebtedness and critical ratios to satisfy themselves that the company is solvent. A solvency resolution may be positive or negative. If the directors pass a negative solvency resolution – in other words they do not believe the company is solvent – the Registrar of Companies must be informed within seven days of the resolution being passed. Insolvent companies may be wound up by the Court.
More information is set out in our 2019 Solvency Resolution Reminder Alert.
Please contact Glenis Yee, Janice Fong or Jesline Singh at Munro Leys if you have any queries.
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[1] s.514
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.