Section 427 – The Companies Act,1956

The Companies Act, 1956

427. Obligations of directors and managers whose liability is unlimited.

427. Obligations of directors 1[***] and managers whose liability is unlimited.In the winding up of a limited company, any director 2[***] or manager, whether past or present, whose liability is, under the provisions 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 company:

Provided that

(a)a past director 2[***] 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;

(b)a past director 2[***] or manager shall not be liable to make such further contribution in respect of any debt or liability of the company contracted after he ceased to hold office;

(c)subject to the articles of the company, a director 2[***] or manager shall not be liable to make such further contribution, unless the 3[Tribunal] deems it necessary to require the contribution in order to satisfy the debts and liabilities of the company, and the costs, charges and expenses of the winding up.

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1. The words “, managing agents” omitted by Act 53 of 2000, sec. 187 (w.e.f. 13-12-2000).

2. The words “, managing agent, secretaries and treasurers” omitted by Act 53 of 2000, sec. 187 (w.e.f. 13-12-2000).

3. Subs. by Act 11 of 2003, sec. 49, for “Court”.

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