Section 162: Duty of directors on insolvency

162. Duty of directors on insolvency (1) A director of a company who believes that the company is unable to pay its debts as they fall due shall forthwith call a meeting of the Board to consider whether the Board should appoint a liquidator or an administrator. (2) Where a meeting is called under this section, the Board shall consider whether to appoint a liquidator or an administrator, or to carry on the business of the company. [Issue 1] C35 – 106 Revised Laws of Mauritius (3) Where— (a) a director fails to comply with subsection (1); (b) at the time of that failure, the company was unable to pay its debts as they fell due; and (c) the company is subsequently placed in liquidation, the Court may, on the application of the liquidator or a creditor of the company, make an order that the director shall be liable for the whole or any part of any loss suffered by creditors of the company as a result of the company continuing to trade. (4) Where— (a) at a meeting called under this section the Board does not resolve to appoint a liquidator or an administrator; (b) at the time of the meeting there were no reasonable grounds for believing that the company was able to pay its debts as they fell due; and (c) the company is subsequently placed in liquidation, the Court may, on the application of the liquidator or a creditor of the company, make an order that the directors, other than those directors who attended the meeting and voted in favour of appointing a liquidator or an administrator, shall be liable for the whole or any part of any loss suffered by creditors of the company as a result of the company continuing to trade. Sub-Part G – Secretaries