law: Companies Act, 2013 
  305.
  
    Declaration
  
  of solvency in case of proposal to wind up voluntarily.
  1.      Where it is proposed
  
  to wind up a company voluntarily, its director or directors, or in case the
  
  company has more than two directors, the majority of its directors, shall, at a
  
  meeting of the Board, make a declaration verified by an affidavit to the effect
  
  that they have made a full inquiry into the affairs of the company and they
  
  have formed an opinion that the company has no debt or whether it will be able
  
  to pay its debts in full from the proceeds of assets sold in voluntary winding
  
  up.
  2.      A declaration made
  
  under sub-section (1 ) shall have no effect for the purposes of this Act,
  
  unless—
  a.     
  
    it
  
  is made within five weeks immediately preceding the date of the passing of the
  
  resolution for winding up the company and it is delivered to the Registrar for
  
  registration before that date;
  b.    
  
    it
  
  contains a declaration that the company is not being wound up to defraud any
  
  person or persons;
  c.     
  
    it
  
  is accompanied by a copy of the report of the auditors of the company prepared
  
  in accordance with the provisions of this Act, on the profit and loss account
  
  of the company for the period commencing from the date up to which the last
  
  such account was prepared and ending with the latest practicable date immediately
  
  before the making of the declaration and the balance sheet of the company made
  
  out as on that date which would also contain a statement of the assets and
  
  liabilities of the company on that date; and
  d.    
  
    where
  
  there are any assets of the company, it is accompanied by a report of the
  
  valuation of the assets of the company prepared by a registered valuer.
  1.     
  2.     
  3.      Where the company is
  
  wound up in pursuance of a resolution passed within a period of five weeks
  
  after the making of the declaration, but its debts are not paid or provided for
  
  in full, it shall be presumed, until the contrary is shown, that the director
  
  or directors did not have reasonable grounds for his or their opinion under
  
  sub-section (1 ).
  4.      Any director of a
  
  company 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
  
  from the proceeds of assets sold in voluntary winding up shall be punishable
  
  with imprisonment for a term which shall not be less than three years but which
  
  may extend to five years or with fine which shall not be less than fifty
  
  thousand rupees but which may extend to three lakh rupees, or with both.