Hong Kong Ordinances

COMPANIES ORDINANCE - SECT 170

Liability as contributories of present and past members

Contributories

(1) In the event of a company being wound up, every present and past member
shall 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, subject to the provisions of subsection (2)
and the following qualifications-

   (a)  a past member shall not be liable to contribute if he has ceased to be
        a member for 1 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 existing members are unable to satisfy the
        contribution required to be made by them in pursuance of this
        Ordinance;

   (d)  in the case of a company limited by shares no contribution shall be
        required from any member exceeding the amount, if any, unpaid on the
        shares in respect of which he is liable as a present or past member;

   (e)  in the case of a company limited by guarantee, no contribution shall,
        subject to the provisions of subsection (3), be required from any
        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 Ordinance 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;

   (g)  a sum due to any member of a company, in his character of a member, 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 a member of the company,
        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, under the provisions of this Ordinance,
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 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 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 shall not be liable
        to make such further contribution unless the court deems 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. (Amended 6 of 1984 s. 127)

(3) 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 sums unpaid on
any shares held by him. [cf. 1929 c. 23 s. 157 U.K.]