426. Liability as contributories of present and past members.-.
(1)In the event of a company being wound up, every present and past membershall be liable to contribute to the assets of the company to an amount sufficientfor payment of its debts and liabilities and the costs, charges and expenses of thewinding up, and for the adjustment of the rights of the contributories amongthemselves, subject to the provisions of section 427 and subject also to thefollowing qualifications, namely :-(a)a past member shall not be liable to contribute if he has ceased to be amember for one year or upwards before the commencement of thewinding up ;(b)a past member shall not be liable to contribute in respect of any debt orliability of the company contracted after he ceased to be a member ;(c)no past member shall be liable to contribute unless it appears to the [Tribunal] [ Substituted by Act 11 of 2003, Section 49, for " Court" .] that the present members are unable to satisfy the contributionsrequired to be made by them in pursuance of this Act ;(d)in the case of a company limited by shares, no contribution shall berequired from any past or present member exceeding the amount, if any,unpaid on the shares in respect of which he is liable as such member ;(e)in the case of a company limited by guarantee, no contribution shall,subject to the provisions of sub-section (2), be required from any past orpresent member exceeding the amount undertaken to be contributed byhim to the assets of the company in the event of its being wound up ;(f)nothing in this Act shall invalidate any provision contained in anypolicy of insurance or other contract whereby the liability of individualmembers on the policy or contract is restricted, or whereby the funds of the company are alone made liable in respect of the policy or contract ;(g)a sum due to any past or present member of the company in hischaracter as such, by way of dividends, profits or otherwise, shall not bedeemed to be a debt of the company payable to that member, in a case ofcompetition between himself and [any creditor claiming otherwise than in the character of a past or present member of the company] [ Substituted by Act 65 of 1960, Section 161, for certain words (w.e.f. 28.12.1960).] ; but any suchsum shall 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 company limited by guarantee which has a sharecapital, every member of the company shall be liable, in addition to the amountundertaken to be contributed by him to the assets of the company in the event ofits being wound up, to contribute to the extent of any sums unpaid on any sharesheld by him as if the company were a company limited by shares.
