What Is a List of Contributories? Section 285

A list of contributories is the Tribunal's answer to a single question in a winding up: who, apart from the company, has to put money in. Section 285 of the Companies Act, 2013 has the Tribunal settle that list after the winding up order, sets five conditions limiting who goes on it and for how much, and section 296 then lets the Tribunal make calls against the people named. This page reads sections 285, 286, 295, 296 and 297 as printed.

What is a list of contributories, and who settles it?

The Tribunal does, and it does three things at the same time. Section 285(1) requires that As soon as may be after the passing of a winding up order by the Tribunal, the Tribunal shall settle a list of contributories, cause rectification of register of members in all cases where rectification is required in pursuance of this Act and shall cause the assets of the company to be applied for the discharge of its liability.

Settling the list, rectifying the register of members and applying the assets are one composite duty in that sentence, not three optional steps. The rectification limb matters because the list is built from the register, and a register that is wrong would otherwise make the list wrong.

The proviso lets the whole exercise be skipped: where it appears to the Tribunal that it would not be necessary to make calls on or adjust the rights of contributories, the Tribunal may dispense with the settlement of a list of contributories. The test is stated as a forward looking one, whether calls or an adjustment will be needed, rather than whether the company is solvent.

Section 285(2) then requires a division inside the list. In settling it, the Tribunal shall distinguish between those who are contributories in their own right and those who are contributories as being representatives of, or liable for the debts of, others. Two classes, kept apart on the face of the list.

Who goes on the list, and what limits their liability?

Section 285(3) casts the net wide and then pulls five conditions across it. The Tribunal shall include every person, who is or has been a member, who shall be liable to contribute to the assets of the company an amount sufficient for payment of the debts and liabilities and the costs, charges and expenses of winding up, and for the adjustment of the rights of the contributories among themselves.

Note what the contribution is measured against. It is not the company's debts alone: it also covers the costs, charges and expenses of winding up and the internal adjustment between contributories.

The five conditions then follow.

Conditions (a), (b) and (c) apply only to past members, and they stack: a former shareholder inside the one year window is still shielded by (b) for debts contracted after he left, and by (c) unless the present members cannot pay. Conditions (d) and (e) apply to present and past members alike, and they are the ones that cap the amount.

The one year in condition (a) runs to the commencement of the winding up, and commencement is earlier than the order. Section 357 states that a winding up by the Tribunal shall be deemed to commence at the time of the presentation of the petition for the winding up, which is one of the dates that the effect of a winding up order turns on.

Are directors ever liable beyond their shares?

Only where their liability is already unlimited. Section 286 applies In the case of a limited company to any person who is or has been a director or manager, whose liability is unlimited under the provisions of this Act. Such a person is liable, in addition to his liability, if any, to contribute as an ordinary member, to make a further contribution as if he were at the commencement of winding up, a member of an unlimited company.

Three provisos then mirror the past member conditions in section 285(3). A former director or manager is not liable to the further contribution if he has ceased to hold office for a year or upwards before the commencement of the winding up; not liable in respect of any debt or liability of the company contracted after he ceased to hold office; and, subject to the articles of the company, not liable unless the Tribunal deems it necessary to require the contribution to satisfy the debts and liabilities and the costs, charges and expenses of the winding up.

How is the money actually called in?

By an order, then by calls. Section 295(1) lets the Tribunal, at any time after passing of a winding up order, order any contributory for the time being on the list of contributories to pay, in the manner directed by the order, any money due to the company, from him or from the estate of the person whom he represents, and it says what that order excludes: any money payable by virtue of any call in pursuance of this Act. Calls are a separate track.

Section 295(2) allows set-off in two situations, and both sit inside an order made under sub-section (1). In an unlimited company the Tribunal may allow the contributory set-off of any money due to him or to the estate which he represents, from the company, on any independent dealing or contract with the company, but expressly not any money due to him as a member of the company in respect of any dividend or profit. In a limited company the same set-off may be allowed to any director or manager whose liability is unlimited, or to his estate, which is the section 286 class again.

Section 295(3) opens set-off to everyone, but only at the end: In the case of any company, whether limited or unlimited, when all the creditors have been paid in full, any money due on any account whatever to a contributory from the company may be allowed to him by way of set-off against any subsequent call.

Section 296 is the call power itself. The Tribunal may, at any time after the winding up order, and either before or after it has ascertained the sufficiency of the assets of the company, (a) make calls on all or any of the contributories for the time being on the list of the contributories, to the extent of their liability, for money the Tribunal considers necessary to satisfy the debts and liabilities, the costs, charges and expenses of winding up, and the adjustment of rights among contributories; and (b) make an order for payment of any calls so made.

The words either before or after it has ascertained the sufficiency of the assets are the operative ones. A call does not have to wait for the shortfall to be quantified. What a call cannot do is exceed the extent of their liability, which is what section 285(3)(d) and (e) fixed.

Calls can also be compromised, but not by the liquidator alone. Section 343(1)(iii) puts compromising any call or liability to call among the acts requiring the Tribunal's sanction, which is covered with the rest of the powers of a Company Liquidator.

What happens if money is left over?

Section 297 is one sentence and covers both directions: The Tribunal shall adjust the rights of the contributories among themselves and distribute any surplus among the persons entitled thereto. The same body that settled who owes what settles who gets what back.

Reading a list of contributories therefore means reading it against four things: whether the person is a present or past member, which of the five section 285(3) conditions applies to him, what his shares or guarantee cap the amount at, and whether section 286 adds an unlimited further contribution on top. The list exists because a winding up order was made on one of the section 271 grounds, and it is the document the Tribunal's calls are made against.

Flock reports the filings themselves, each stamped with its date and linked back to the exchange or regulator that published it. What any of it means for you is your call to make.