Singapore legislation
Clause 121
Clause 121
Liability of present and past members as contributories, and unlimited liability of directors
(1)
On a company being wound up, every present and past member is liable to contribute to the assets of the company to an amount sufficient for payment of the debts and liabilities of the company and the costs, charges and expenses of the winding up, and for the adjustment of the rights of the contributories among themselves, subject to subsection (2) and the following qualifications:
a past member is not liable to contribute if the past member has ceased to be a member for one year or more before the commencement of the winding up;
a past member is not liable to contribute in respect of any debt or liability of the company contracted after the past member ceased to be a member;
a past 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 the existing members under the Companies Act;
in the case of a company limited by shares, no contribution is required from any member exceeding the amount, if any, unpaid on the shares in respect of which that member is liable as a present or past member;
in the case of a company limited by guarantee, subject to subsection (4), no contribution is required from any member exceeding the amount undertaken to be contributed by that member to the assets of the company in the event the company is wound up;
nothing in this Act invalidates any provision contained in any policy of insurance or other contract under which the liability of individual members on the policy or contract is restricted, or under which the funds of the company are alone made liable in respect of the policy or contract;
a sum due to any member in that member’s character of a member by way of dividends, profits or otherwise is not a debt of the company payable to that member, in a case of competition between that member 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.
(2)
In the winding up of a limited company, any director, whether past or present, whose liability is unlimited is, in addition to the director’s liability, if any, to contribute as an ordinary member, liable to make a further contribution as if the director were, at the commencement of the winding up, a member of an unlimited company.
(3)
Despite subsection (2) —
a past director is not liable to make a further contribution if the past director has ceased to hold office for one year or more before the commencement of the winding up;
a past director is not liable to make a further contribution in respect of any debt or liability of the company contracted after the past director ceased to hold office; and
subject to the constitution of the company, a director is not liable to make a further contribution unless the Court considers it necessary to require that contribution in order to satisfy the debts and liabilities of the company and the costs, charges and expenses of the winding up.
(4)
On the winding up of a company limited by guarantee, every member is liable, in addition to the amount undertaken to be contributed by the member to the assets of the company in the event the company is wound up, to contribute to the extent of any sums unpaid on any shares held by the member.