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A Declaration of Solvency is a form, signed by a DMCC company's directors, confirming that after full inquiry the company can settle its debts within the wind-up window — six months for Summary, twelve for Solvent. It is required only for Summary and Solvent winding-up, not for insolvent or court-ordered routes. Where there is more than one director, the majority must sign, and it must be signed within 20 business days before (or the same day as, but before) the winding-up resolution.
Before DMCC will accept a voluntary winding-up, the company's directors have to put their names to one short but consequential document: the Declaration of Solvency. It is the legal gateway to the Summary and Solvent routes — and it is a personal attestation, not a formality.
What it is
A directors' statement that the company can pay its way out
A Declaration of Solvency is a form, set by the DMCC Registrar, in which the directors confirm that — after a full inquiry into the affairs of the company — it is solvent for winding-up purposes. It is what allows the company to use a voluntary, members-driven close rather than a creditor- or court-driven one.
What it actually states
One of three positions
Having made that inquiry, the declaration states which of these is true:
- The company has no assets and no liabilities (the typical dormant-company position); or
- The company has assets and no liabilities; or
- The company has liabilities but can discharge them in full within the wind-up window — six months for Summary, twelve months for Solvent.
Who signs
The directors — and the majority of them if there is more than one
This is a common point of confusion: the Declaration of Solvency is signed by the directors of the company, not the shareholders. Where the company has more than one director, the majority must sign. DMCC's own guidance is explicit that the declaration is "applicable only for DMCC Companies and only for the Solvent and Summary Winding-up process," and is "to be signed by the Directors of the Company."
Only two routes need it
You provide a Declaration of Solvency for Summary and Solvent winding-up only. The insolvent and court-ordered routes do not use it — they follow a different process built around creditors. More on those routes →
When it must be signed
The 20-business-day timing rule
Timing matters. The declaration must be made within 20 business days before — or on the same day as, but before — the resolution to wind up the company is passed. In other words, the directors declare solvency first (or simultaneously), and the winding-up resolution follows. Signing it late, or after the resolution, creates a sequencing problem that can hold up the application.
Why it's not a rubber stamp
What the directors are taking on
A Declaration of Solvency is a representation that the directors have genuinely investigated the company's position and believe it can meet its obligations. If that turns out to be wrong:
- The winding-up cannot continue as Summary or Solvent — it must be converted to an insolvent winding-up, bringing creditors into the process.
- A declaration made without reasonable grounds is a serious matter for the directors who signed it.
The declaration has to match the numbers
The position the directors declare must be consistent with the company's financial statements and the liquidation audit report. This is where a DMCC-approved auditor earns their place — the report substantiates the declaration so it stands up. Get the accounts wrong and the declaration is built on sand.
Dormant companies
Yes, you still sign one
Even a company that never traded needs a Declaration of Solvency — it simply uses the "no assets and no liabilities" position. Pair that with a clean closing balance sheet and the approved-auditor report, and a dormant DMCC company can move cleanly through Summary Winding-Up.
For where the declaration sits in the wider close, see our full DMCC liquidation process guide, and for choosing between the two routes, see Summary vs Solvent.
We prepare the accounts your declaration stands on
Fastlane prepares the financial statements and the DMCC-approved liquidation audit report that support your Declaration of Solvency — so the directors sign with confidence and the application clears. AED 1,999 all-inclusive.
Continue the DMCC winding-up series
Summary vs Solvent Winding-Up →Insolvent & Involuntary Winding-Up →Related Fastlane services
FAQ
Who signs the DMCC Declaration of Solvency — directors or shareholders?
The directors sign it, not the shareholders. Where a DMCC company has more than one director, the majority of directors must sign. It confirms that, after a full inquiry into the company's affairs, the company is solvent for winding-up purposes. The shareholders separately pass the resolution to wind up.
When must the Declaration of Solvency be signed?
It must be made within 20 business days before the winding-up resolution is passed, or on the same day but before the resolution. The directors declare solvency first or simultaneously, and the resolution follows. Signing it after the resolution creates a sequencing issue that can delay the DMCC application.
Is a Declaration of Solvency needed for a dormant DMCC company?
Yes. A dormant company still provides a Declaration of Solvency, using the 'no assets and no liabilities' position. Combined with a clean closing balance sheet and the approved-auditor liquidation report, this lets a dormant DMCC company proceed through Summary Winding-Up.
Is a Declaration of Solvency required for insolvent or court-ordered winding-up?
No. The Declaration of Solvency applies only to the Solvent and Summary winding-up routes. Insolvent voluntary winding-up and involuntary winding-up by the Court follow a different, creditor- or court-driven process and do not use a declaration of solvency.
What happens if the company can't actually pay its debts within the window?
If the company cannot discharge its liabilities within the declared window, the winding-up cannot remain Summary or Solvent — it must be converted to an insolvent winding-up, which brings creditors into the process. A declaration of solvency made without reasonable grounds is also a serious matter for the signing directors, which is why the declaration should be supported by proper financial statements.
This article is general information on the DMCC Company Regulations and winding-up process, current as of June 2026, and is not legal or financial advice. The DMCC Authority sets the governing regulations and may update procedures and forms. Examples are illustrative only. Confirm your specific position with a qualified adviser before acting.