Section 125: Liability of present and past shareholders

125. Liability of present and past shareholders (1) Subject to this section, where a company is wound up, every present and past shareholder shall be liable to contribute to the assets of the company to an amount sufficient for the payment of its debts and liabilities and the costs, charges and expenses of the winding up and for the adjustment of the rights of the contributories among themselves. [Issue 9] I14 – 76 Revised Laws of Mauritius (2) Subject to subsection (3)— (a) a past shareholder shall not be liable to contribute under subsection (1)— (i) where he has ceased to be a member for one year or more before the commencement of the winding up; and (ii) unless it appears to the Court that the existing shareholders are unable to satisfy the contributions required to be made by them under this Act; (b) in the case of a company limited by shares, no contribution under subsection (1) shall be required from a shareholder in excess of the amount, if any, unpaid on the shares in respect of which he is liable as a present or past shareholder; (c) in the case of a company limited by guarantee, no contribution under subsection (1) shall be required from a shareholder in excess of the amount undertaken to be contributed by him to the assets of the company in the event of its being wound up; (d) nothing in this Act shall invalidate a provision contained in any policy of insurance or other contract whereby— (i) the liability of individual shareholders on the policy or contract is restricted; or (ii) the funds of the company are alone made liable in respect of the policy or contract; (e) a sum due to a shareholder in that capacity by way of dividend, profit or otherwise shall not be a debt of the company payable to that shareholder in a case of competition between himself and any other creditor who is not a member, but any such sum may be taken into account for the purpose of the final adjustment of the rights of the contributories among themselves. (3) Where a company which has been converted from an unlimited to a limited company is wound up— (a) a past shareholder of the company who was a shareholder at the time of re-registration shall, if the winding up commences within the period of 3 years beginning with the day on which the company is re-registered, be liable to contribute to the assets of the company in respect of its debts and liabilities contracted before that time; (b) where no person who was a shareholder at the time of reregistration is an exiting shareholder, a person, who, at the time, was a present or past shareholder shall, subject to subsection (2) (a) and to paragraph (a), be liable to contribute in accordance with paragraph (a); (c) there shall be no limit on the amount which a person who, at that time, was a past or present shareholder of the company, is liable to contribute in accordance with paragraph (a). I14 – 77 [Issue 3] Insolvency Act (4) (a) A past director shall not be liable to make a further contribution— (i) where he has ceased to hold office for a year or more before the commencement of the winding up; or (ii) in respect of any debt or liability of the company contracted after he ceased to hold office. (b) Subject to the constitution of the company, a director shall not be liable to make a further contribution unless it appears to the Court that the director and the other person are unable to satisfy the contributions required to be made by them under subsection (1). (5) The liability of a contributory shall cr ceased to hold office for a year or more before the commencement of the winding up; or (ii) in respect of any debt or liability of the company contracted after he ceased to hold office. (b) Subject to the constitution of the company, a director shall not be liable to make a further contribution unless it appears to the Court that the director and the other person are unable to satisfy the contributions required to be made by them under subsection (1). (5) The liability of a contributory shall create a debt becoming due from him at the time when this liability commenced but payable at the time when a call is made for enforcing the liability. (6) In this section, “shareholder” includes a member of a company limited by guarantee or a company without a share capital.