Section 407, The Companies Act, 2009

(1) Where it is proposed to wind up a companyvoluntarily, the directors may (or in the case of a company having more than two directors, the majority of them) at a directors’ meeting make a statutory declaration to the effect that they have made a full inquiry into the company’s affairs and that they have formed the opinion that the company will be able to pay its debts in full within such period, not exceeding 12 months from the commencement of the winding up, as may be specified in the declaration. (2) A declaration by the directors has no effect for the purposes of this Act unless– (a) it is made within the 5 weeks immediately preceding the date of the passing of the resolution for winding up, or on that date but before the passing of the resolution; (b) it embodies a statement of the company’s assets and liabilities as at the latest practicable date before the making of the declaration; (c) it is delivered to the Commission before the expiration of 15 days immediately following the date on which the resolution for the winding up is passed or such further date as may be determined by the Commission. (3) A director making a declaration under this section without having reasonable grounds for the opinion that the company will be able to pay its debts in full within the specified period shall be guilty of an offence and be liable to a fine not exceeding Le.5,000,000 or to a term of imprisonment not exceeding 6 months or to both the fine and imprisonment. (4) If the company is wound up in pursuance of a resolution passed within 5 weeks after the making of the declaration and its debts are not paid or provided for in full within the period specified, it shall be presumed (unless the contrary is shown) that the director did not have reasonable grounds for his opinion.