Companies Act 2014 section 1223

Liability as contributories of past and present members and provision concerning winding up after certain re-registration

Section 1223 sets out the liability of current and past members of a company limited by guarantee (CLG) to contribute to the company's assets when it is wound up, and the qualifications that limit that liability.

• When a CLG is wound up, every present and past member may be required to contribute towards paying off its debts, liabilities, and winding-up costs, up to the amount they undertook to contribute under the guarantee.
• Past members are protected from liability if they left the CLG more than one year before the winding up commenced, or if the debt arose after they ceased to be a member.
• Past members can only be called upon to contribute if the court is satisfied that existing members are unable to meet the contributions required of them.
• Any amount owed by the CLG to a member in their capacity as a member (such as distributions or profits) does not rank as a debt of the company in competition with outside creditors, but may be taken into account when adjusting the rights of contributories among themselves.

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