Companies Act, 1990

Civil consequences of acting contrary to the provisions of Chapter 1 or 2.

163.—(1) Subsections (2) and (3) apply to any person who acts, in relation to a company, in a manner or capacity which, by virtue of being a person to whom section 150 applies or being subject or deemed to be subject to a disqualification order, he is prohibited from doing.

(2) Where any consideration is given by or on behalf of a company for an act done or service performed by a person referred to in subsection (1) while he was acting in a manner or capacity described in that subsection, the company shall be entitled to recover from him, as a simple contract debt in any court of competent jurisdiction, the consideration or an amount representing its value.

(3) Where—

(a) a person referred to in subsection (1) acts, in relation to a company, in a manner or capacity described in that subsection, and

(b) the company concerned commences to be wound up—

(i) while he is acting in such a manner or capacity, or

(ii) within 12 months of his so acting, and

(c) the company is unable to pay its debts, within the meaning of section 214 of the Principal Act,

the court may, on the application of the liquidator or any creditor of the company, declare that such person shall be personally liable, without any limitation of liability, for all or any part of the debts or other liabilities of the company incurred in the period during which he was acting in such a manner or capacity.

(4) Where a company which has received a notification under section 155 (5) and which carries on business following such notification without the requirements of section 150 (3) being fulfilled within a reasonable period—

(a) is subsequently wound up, and

(b) is at the time of the commencement of the winding-up unable to pay its debts (taking into account the contingent and prospective liabilities),

the court may, on the application of the liquidator or any creditor or contributory of the company, declare that any person who was an officer of the company while the company so carried on business and who knew or ought to have known that the company had been so notified shall be personally responsible, without any limitation of liability, for all or any part of the debts or other liabilities of the company as the court may direct.

(5) In any proceedings brought against a person by virtue of this section the court may if, having regard to the circumstances of the case, it considers it just and equitable to do so, grant relief in whole or in part from the liability to which he would otherwise be subject thereunder and the court may attach to its order such conditions as it sees fit.