Section 294 — Liability as contributories of present and past members

(1) In
the event of a company being wound up, every present and past member shall,
subject to the provisions of section 295, be liable to contribute to the assets of the
company to an amount sufficient for payment of its debts and liabilities and the
costs, charges and expenses of the winding up, and for the adjustment of the rights
of the contributories among themselves, with the following qualifications, that is to
say—

(a) a past member shall not be liable to contribute if he has ceased to be
member for one year or upwards before the commencement of the
winding up;

(b) a past member shall not be liable to contribute in respect of any debt
or liability of the company contracted after he ceased to be a
member;

(c) a past member shall not be liable to contribute unless it appears to
the Court that the present members are unable to satisfy the
contributions required to be made by them in pursuance of this Act;

(d) in the case of a company limited by shares, no contribution shall be
required 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 or present member exceeding the amount undertaken to be
contributed by him 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 any
policy of insurance or other contract whereby the liability of
individual members 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; and

(g) a sum due to any past or present member of a company in his
character as such, by way of dividends, profits or otherwise, shall
not be deemed to be a debt of the company payable to that member
in a case of competition between himself and any other creditor not
being a member of the company, but any such sum may be taken
into account for the purpose of the final adjustments of the rights of
the contributories among themselves.

(2) 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 sum unpaid on any
shares held by him, as if the company were a company limited by shares.