Section 386: Phoenix company

386. Phoenix company (1) In subsection (2)— “director of a failed company” means a person who was a director of a failed company at any time in the period of 12 months before the commencement of its winding up; “failed company” means a company that was placed in liquidation at a time when it was unable to pay its due debts; “phoenix company”, in relation to a failed company, means a company that, at any time before or within 5 years after the commencement of the winding up of the failed company or within the period prescribed by regulations, is incorporated with or changes its name to the name of the failed company or a name that is substantially the same; I14 – 211 [Issue 2] Insolvency Act “pre-liquidation name” means any name (including any trading name) of a failed company in the 12 months before the commencement of that company’s winding up; “similar name” means a name that is so similar to a pre-liquidation name of a failed company as to reasonably suggest an association with that company. (2) Subject to section 387 except with the leave of the Court, a director of a failed company shall not, for a period of 5 years after the date of commencement of the winding up of the failed company— (a) be a director of a phoenix company; or (b) be directly or indirectly concerned or take part in the promotion, formation or management of a phoenix company; or (c) be directly or indirectly concerned in or take part in the carrying on of a business that has the same or substantially the same name as the failed company’s pre-liquidation name or a similar name. (3) A person who contravenes subsection (2) commits an offence and is liable on conviction to a fine not exceeding 1,000,000 rupees and to imprisonment not exceeding 2 years. (4) A person who contravenes subsection (2) (a) or (b) is personally liable for all of the relevant debts of the phoenix company. (5) A person who is involved in the management of a phoenix company is personally liable for all of the relevant debts of the company where— (a) in the management of the company the person acts or is willing to act on instructions given by another person; and (b) at that time the person knows that the other person is contravening subsection (2) (a) or (b) in relation to the company. (6) For the purposes of this section— “relevant debt”— (a) in subsection (4) means the debts and liabilities incurred by the phoenix company while the person liable was involved in the management of the company and the phoenix company was known by a pre-liquidation name of a failed company or a similar name; and (b) in subsection (5) means the debts and liabilities incurred by the phoenix company while a person was acting or was willing to act on the instructions of another person and the phoenix company was known by a pre-liquidation name of a failed company or a similar name. (7) Any liability under subsections (4) and (5) is joint and several. [Issue 2] I14 – 212 Revised Laws of Mauritius (8) For the purposes of subsections (4) and (5), a person who, as a person involved in the management of a company, has at any time acted on instructions given by a person whom he knew at the time to be in contravention of subsection (2) is presumed, unless the contrary is shown, to have been willing at any later time to act on any instructions given by that person.