Companies Act 2014 section 654

Liability of contributory

Section 654 establishes when a contributory's financial obligation arises, when it becomes payable, and the time limit for recovering the debt.

• A contributory's liability creates a debt that begins accruing from the moment the liability first commences.
• Although the debt starts accruing at that point, it only becomes payable when calls are actually made to enforce the liability.
• Any legal action to recover this debt must be brought within 12 years from the date the cause of action accrued.
• If the 12-year limitation period expires without action being taken, the debt can no longer be recovered through legal proceedings.