TAXAJ

Solvency Certificate by Chartered Accountant

A solvency certificate is required by the government and commercial offices to be sure about the financial position of individuals/entities. A solvency certificate is required for the following reasons:

  • Applying for tenders
  • Obtaining contracts,
  • Visa interviews,
  • Legal/court matters etc.

A solvency certificate supports the financial strength of the individual/entity.

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About This Plan

Get the Solvency Certificate easily with TAXAJ

Created by potrace 1.15, written by Peter Selinger 2001-2017

Timeline

It usually takes 1 to 2 working days.

Buy Now @ INR 10,000/-
Services Covered
Who Should Buy
How It's Done
Documents Required
Services Covered
  • Discussion about the matter with an Expert
  • Preparation & Filing of Certificate
Who Should Buy
  • Resident & Non Resident Individuals
How It's Done

    • Submit the documents as per the Checklist
    • Documents are verified by the CA
    • A Draft copy of the turnover certificate is shared
    • Once the draft is approved a final certified copy is issued by the Chartered Accountant
Documents Required
  • Request form.
  • Copy of passport.
  • Current account statement, if any.
  • Savings account statement, if any.
  • Mutual funds investment, if any.
  • Investment in shares, if any.
  • Property valuation certificate from Chartered Engineer, if applicable.
  • Gold valuation certificate, issued by Banker based on the weight and value of gold.
  • Insurance, if any.
  • Provident fund account statement, if any.
  • Chartered Accountant Net worth Certificate.

Issuance of a Solvency Certificate

A solvency certificate is generally issued by the revenue department and banks on request. Banks usually issue this certificate to their customers based on the account transactions and property documents available to them.

A report from a chartered accountant attesting the financial status of the individual/entity also helps in obtaining the solvency certificate from banks. In most cases, the certificate obtained by the customers from their banks is used for submitting tender applications/contracts to government offices.

Documents Required by a Bank to Issue a Solvency Certificate

In order to gauge an individual/entity’s financial position a public sector bank will need the following documents from its customers:

  • Application form: Banks generally have pre-specified application forms to be filled by the customer requesting a solvency certificate.
  • Identity/address proof: Current address proof of the individual or the entity’s registered address proof will be required.
  • Bank statement (savings/current): Banks issue such certificates only for their customers who have been transacting with the bank for a specific number of years. This period might vary from one bank to another and the bank officials will analyze the bank statements (either current/savings account) to understand the customer’s financial background. Any other loan accounts or fixed deposit accounts may also be checked in detail for this purpose.
  • Income tax returns: Income tax returns for a certain number of years are requested by the banks from its customers to understand their overall financial status.
  • Audited financial statements (companies/partnership firms):
    With respect to companies/partnership firms, banks will have to assess their net worth after considering all liabilities to determine the financial stability of the entity. Audited balance sheet, profit/loss account, cash flow statements for a certain number of years will be required for this purpose.
  • Property documents: Properties are considered to be the preferred security by banks. Individuals and entities who own properties such as land and buildings can prove their financial status through these property documents.
  • Gold valuation certificate: Individuals generally hold gold in their possession which is an important security that a bank may consider while issuing a certificate. If that is the case, gold is usually valued by the bank’s in-house valuer.
  • Certificate of Net Worth by a Chartered Accountant: Most banks ask for a net worth statement from a Chartered Accountant to issue this certificate. A net worth certificate generally lists all the assets and liabilities of an entity till date.
  • Any other investment certificate: Apart from the documents listed above, customers can produce any other investment statements to the bank such as mutual funds, shares, provident fund statement, etc. Usually, once the Bank analyses these supporting documents and is satisfied with the solvency of the individual/entity with respect to the liabilities held/to be held, it will issue the solvency certificate to the customer.

However, the bank does not take any responsibility for any liability that may occur in the future based on this solvency certificate. Generally, the Bank Manager will have restricted powers to issue only a certain number/value of solvency certificates. If, issuing the certificate is over and above the discretionary powers of the bank manager, this request will be forwarded to higher officials for approval. A solvency certificate is issued only to renowned and reliable customers and banks will levy a charge for the same.

Applying for Solvency Certificate

The application for solvency certificate must be submitted to the bank in which a savings or current account is maintained. However, the banker would rely on various other documents and information to prepare the solvency certificate. Hence, the application for solvency certificate must be submitted with the following details:

Property Valuation

In case you would like the value of your property to be taken into consideration, submit a property valuation report from a Chartered Engineer or Bank Panel Valuer. While submitting the application, the Banker could request to view the original documents of the property.

Gold Valuation

In case gold value is to be taken into account, value the gold in your possession through the bank panel valuer. Bank’s normally have in-house gold valuers for processing gold loans.

Bank Statement

In case you have money in your savings account, provide details of all bank statements under your control.

Fixed Deposit Receipts

Provide details of all fixed deposit receipts in your name, if any.

Provident Fund Statement

In case there is money saved in the provided fund account, submit a stamped provident fund account statement.

Mutual Funds or Shares

In case you have any savings in mutual funds or shares, provide details of the investment. The surrender value of such investment would be taken into account while issuing the solvency certificate.

Chartered Accountant Net Worth Certificate

Finally, obtain a net worth certificate from a Chartered Accountant with a list of all assets and liabilities. Most banks insist on a Chartered Accountant Net Worth statement to issue the certificate.

Submitting the Application

While applying for the certificate, the photocopy of all the documents stated by the bank official must be attached along with the filled in the solvency certificate request form. Original documents must be carried along while submitting the form and photocopy of all documents for verification purposes carried out by the bank.

Once the application is submitted with the required documents, the bank would process the application within a week and issue solvency certificate.