Section 385 of Insolvency Act CAP 53: Liability as contributories of present and former members
(1) When a company is being liquidated, every present and former member is liable to contribute to its assets to any amount sufficient for payment of its debts and liabilities, and the expenses of the liquidation, and for the adjustment of the rights of the contributories among themselves.
(2) Subsection (1) is subject to the following provisions—
(a) a person who was formerly a member of the company is not liable to contribute if the person has ceased to be a member for twelve months or more before the commencement of the liquidation;
(b) a person who was formerly a member of the company is not liable to contribute in respect of any debt or liability of the company contracted after the person ceased to be a member;
(c) a former member is not liable to contribute, unless it appears to the Court that the existing members are unable to satisfy the contributions required to be made by them;
(d) in the case of a company limited by shares, a contribution is not required from a member exceeding the amount (if any) unpaid on the shares for which the member is liable as a present or former member;
(e) nothing in the Companies Act (Cap. 486) or this Act invalidates any provision contained in a policy of insurance or other contract whereby the liability of individual members on the policy or contract is restricted, or because of which the funds of the company are alone made liable in respect of the policy or contract;
(f) an amount due to a member of the company as dividends, profits or otherwise is taken not to be a debt of the company, that is payable to the member in a case of competition between the member and any other creditor who is not a member of the company, but any such amount can be taken into account for the purpose of the final adjustment of the rights of the contributories among themselves.
(3) In the case of a company limited by guarantee, a member is not liable to contribute more than the amount that that the member has undertaken to contribute under the company's guarantee.
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