Section 70 — Companies Act 1993: Company must satisfy solvency test

70 Company must satisfy solvency test (1) A company must not exercise an option to redeem a share unless the board of the company is satisfied on reasonable grounds that the company will, immediately after the share is redeemed, satisfy the solvency test in accordance with section 52 of this Act. (2) The directors who vote in favour of exercising the option must sign a certificate stating that, in their opinion, the company will, immediately after the share is redeemed, satisfy the solvency test and the grounds for that opinion. (3) If, after a resolution is passed under subsection (1) of this section and before the option is exercised, the board ceases to be satisfied on reasonable grounds that the company will, immediately after the share is redeemed, satisfy the solvency test in accordance with section 52 of this Act, any redemption of the share is deemed not to have been authorised for the purpose of that section. (4) Every director who fails to comply with subsection (2) of this section commits an offence and is liable on conviction to the penalty set out in section 373(1) of this Act. (5) The provisions of section 56 of this Act apply in relation to the redemption of a share at the option of the company with such modifications as may be necessary.