Cap. 386 Art. 217Liability of past directors and shareholders.

(1) The provisions of sub-articles (2) and (3) shall only apply following the dissolution of a company where a company before its dissolution -

(a) has made a payment out of capital in respect of the redemption or purchase of any of its own shares, which payment is referred to in the following provisions of this article as "the relevant payment"; and

(b) the aggregate amount of the company’s assets and the amounts paid by way of contribution to its assets in terms of article 216, apart from the provisions of this article, is not sufficient for payment of its debts and liabilities, and the expenses of the winding up.

(2) Where the dissolution has occurred within twelve months of the date on which the relevant payment was made, then -

(a) the person from whom the shares were redeemed or purchased, and

(b) the directors who authorised the redemption or purchase, shall, so as to enable the insufficiency referred to in sub-article (1)(b) to be met, be liable to contribute to the company’s assets to the extent referred to in sub-article (3).

(3) A person from whom any of the shares were redeemed or purchased shall be liable to contribute an amount not exceeding so much of the relevant payment as was made by the company in respect of his shares; and the directors shall be jointly and severally liable with that person to contribute that amount.

SUB-TITLE I - WINDING UP BY THE COURT

Chapter I - General Provisions