What is a Declaration of Solvency and Who Needs One?

A Declaration of Solvency is a formal legal document required to begin a Members' Voluntary Liquidation (MVL) — the process used to close a solvent company in the UK. It is also referred to as the LIQ01 form.

What does a Declaration of Solvency say?

The Declaration of Solvency is a sworn statement by the majority of a company's directors confirming that the company is solvent — meaning it can pay all of its debts in full, plus interest, within 12 months of the date the declaration is made.

It must include:

• A statement of the company's assets and liabilities
• Confirmation that the directors have made a full enquiry into the company's affairs
• The directors' belief that the company can pay all debts within 12 months

Who needs to sign it?

The majority of the company's directors must sign the Declaration of Solvency. Each signing director must do so in front of a solicitor (or commissioner for oaths) who witnesses the signature.

For example, if a company has three directors, at least two must sign the declaration.

Why is it required?

Without a valid Declaration of Solvency, a company cannot proceed with a Members' Voluntary Liquidation. An MVL is the most tax-efficient way to close a solvent company, often allowing shareholders to receive retained profits at the Capital Gains Tax rate rather than Income Tax rates.

If the declaration is later found to be false, the directors who signed it may face personal liability for the company's debts.

What is the LIQ01 form?

The LIQ01 is the Companies House form that contains the Declaration of Solvency. Once signed and witnessed, it must be filed with Companies House as part of the MVL process. A licensed insolvency practitioner will typically handle the filing.

How is the declaration witnessed?

Each signing director must have their signature witnessed by a solicitor. This can now be done via secure video call, making the process faster and easier for directors who are in different locations.

At StatDec Hub, we witness Declarations of Solvency via video call at a fixed fee of £100 per appointment. Same-day appointments are available.

How to get your Declaration of Solvency witnessed

1. Obtain the LIQ01 form — your insolvency practitioner will usually provide this
2. Do not sign the form before the video call
3. Book a same-day appointment at StatDec Hub
4. Join the video call with your unsigned form and valid photo ID
5. Sign in front of the solicitor during the call
6. Retain the witnessed original and pass it to your insolvency practitioner

Book your appointment

Fixed fee £100. Same-day appointments available. Book now.