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Contributories

company, liable, past, contribute, winding and liability

CONTRIBUTORIES. In the event of a joint stock company being wound up, the persons who are liable to contribute to the assets are called the contributories. Sec tion 123 of the Companies (Consolidation) Act, 190S deals with the liability of present and past members and is as follows : " (1) In the event of a company being wound up, every present and past member shall, subject to the pro visions of this Section, be liable to contribute to the assets of the company to an amount sufficient for payment of its debts and lia bilities and the costs, charges, and expenses of the winding up, and for the adjustment of the rights of the contributories among themselves, with the qualifications following (that is to say) : ' (i) A past member shall not be liable to contribute if he has ceased to be a member for one year or upwards before the commencement of the winding up : " (ii) A past member shall not be liable to contribute in re spect of any debt or liability of the company contracted after he ceased to be a member : " (iii) A past member shall not be liable to contribute unless it appears to the Court that the existing members are unable to satisfy the con tributions required to be made by them in pursuance of this Act : " (iv) In the case of a company limited by shares no contri bution shall be required from any member exceeding the amount, if any, unpaid on the shares in respect of which he is liable as a present or past member : " (v) In the case of a company limited by guarantee, no contribution shall be re quired from any member exceeding the amount under taken to be contributed by him to the assets of the company in the event of its being wound up : " (yi) Nothing in this Act shall invalidate any provision contained in any policy of insurance or other contract whereby the liability of individual members on the policy or contract is stricted, or whereby the funds of the company are alone made liable in respect of the policy or contract : " (vii) A sum due to any member of a company, in his character of a member, by way of dividends, profits, or wise, shall not be deemed to be a debt of the company, payable to that member in a case of competition tween himself and any other creditor not a member of the company ; but any such sum may be taken into account for the purpose of the final adjustment of the rights of the contributories among themselves.

" (2) In the winding up of a limited com pany, any director or manager, whether past or present, whose liability is, in pursuance of this Act, unlimited, shall, in addition to his liability (if any) to contribute as an ordinary member, be liable to make a further contribution as if he were at the commencement of the winding up a member of an unlimited com pany : Provided that " (i) A past director or manager shall not be liable to make such further contribution if he has ceased to hold office for a year or upwards before the commencement of the winding up : " (ii) A past director or manager shall not be liable to make such further contribution in respect of any debt or liability of the company con tracted after he ceased to hold office : " (iii) Subject to the articles of the company, a director or man ager shall not be liable to make such further contribu tion unless the court deems it necessary to require that contribution in order to satisfy the debts and liabili ties of the company, and the costs, charges, and expenses of the winding lip.

" (3) In the winding up of a company limited by guarantee which has a share capital, every member of the company shall be liable, in addition to the amount undertaken to be contributed by him to the assets of the company in the event of its being wound up, to contribute to the extent of any sums unpaid on any shares held by him." In making up the list of contributories, he liquidator puts the names of present umbers in one list called " A " List, ind of past members who are liable (see section 123, above), in another list, the " B "