Solvecy & Liquidity Test

Validating that Companies, Close Corporations, SOCs and NPCs meet the Solvency & Liquidity Test of Section 4 of the Companies Act 2008 with an accurate and detailed Solvency & Liquidity calculation and report

Section 4 of Companies Act 71 of 2008 requires that every company and close corporations must be both solvent and liquid at all times.

Genesis' Solvency and Liquidity Test online calculator (S&L Test) computes the Solvency Element and the Liquidity Element to confirm that the company is able to pay its debts as they become due and payable in the normal course of business after 

i) giving financial assistance to third parties / directors / prescribed officers for a period of 12 months after the date that the board has authorised financial assistance

ii) making a distribution for a period of 12 months after the date of the distribution (date of payment of dividends).

 

Strategic Uses and Requirements For:

  • Liquidation
  • Business Rescue
  • Turnarounds
  • Financing structures
  • Performance management

Feature and Benefits

  • Detailed and accurate Solvency and Liquidity Test Report
  • Ensure entity meets the Solvency and Liquidity Test
  • To minimise reckless trading
  • For CIPC Compliance Checklist Section 4 Verification

 

Required For Companies Act

  • Section 4 - General S&L Test application and
  • Section 4 - Distributions
  • Section 44 - Financial Assistance
  • Section 45 – Loans to Directors & Prescribed Officers
  • Section 47 – Capitalisation Shares
  • Section 48 – Share Buy-backs
  • Sections 113/116 – M & As
  • Section 164 – Dissenting Shareholder Appraisal Rights
  • Section 128 – Business Rescue
  • Section 39 CC Act – Payments by CC for Member's interest
  • Section 40 CC Act – Financial Assistance
  • Section 51 CC Act – Payments by CC to Members

 

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