In the winding-up of a company upon established insolvency, the next step is to typically come after persons deemed liable for the wound up company’s debts be they members, directors or guarantors.
This article will be focused on contributories under the CAMA 2020, particularly on the topics of :-
– Who constitutes a contributory under CAMA 2020.
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– The extent of liabilityfor contributories under CAMA 2020.
– Contributories in the event of death of members of the company.
– Contributories in the event of bankruptcy of the members of the company.
What is a contributory under CAMA 2020?
The term, “contributory” means every person liable to contribute to the assets of a company in the event of its being wound up, and for the purposes of all proceedings prior to the final determination of the persons who are to be deemed contributories, the expression includes any person alleged to be a contributory.
What does CAMA 2020 say about the liability of a contributory?
In the event of a company being wound up, every present and past member is liable to contribute to the assets of the company as provided in Section 117 of this Act.
What does CAMA 2020 say about the nature of liability of a contributory?
The liability of a contributory creates a debt of the nature of an ordinary contract debt accruing and due from him at the time when his liability commenced, but payable at the time when calls are made for enforcing the liability.
An action to recover a debt created by this section shall not be brought after the expiration of six years from the date on which the cause of action accrued.
What does CAMA 2020 say on contributories in the case of death of death of a company member?
If a contributory dies either before or after he has been placed on the list of contributories, his personal representatives, heirs and devisees, are liable in due course of administration to contribute to the assets of the company in discharge of his liability and they are contributories accordingly.
Where the personal representatives are placed on the list of contributories, the heirs or devisees need not be added but they may be added as and when the Court deems fit.
If the personal representatives make default in paying any money ordered to be paid by them, proceedings may be taken for administering the whole or any part of the estate of the deceased contributory, and for compelling payment out of it of the money due.
What does CAMA 2020 say on contributories in the case of bankruptcy of a member?
If a contributory becomes bankrupt, either before or after he has been placed on the list of contributories, then:
(a) his trustee in bankruptcy shall represent him for the purposes of the winding-up, and shall be a contributory accordingly, and may be called—
(i) on to admit to proof against the estate of the bankrupt,
(ii) to allow to be paid out of his assets, any money due from the bankrupt in respect of his liability to contribute to the assets of the company ; and
(b) there may be proved against the estate of the bankrupt the estimated value of his liability to future calls as well as calls already made.
The provisions of this section extend and apply with all necessary changes to the case of an insolvent person.