Companies Act 1993

If you need more information about this Act, please contact the administering agency: Ministry of Business, Innovation, and Employment
386C Liability for debts of phoenix company

(1)

A person who contravenes section 386A(1)(a) or (b) is personally liable for all of the relevant debts of the phoenix company.

(2)

A person (A) who is involved in the management of a phoenix company is personally liable for all of the relevant debts of the company if—

(a)

in the management of the company A acts or is willing to act on instructions given by another person (B); and

(b)

at that time A knows that B is contravening section 386A(1)(a) or (b) in relation to the company.

(3)

In this section, relevant debts

(a)

in subsection (1), means the debts and liabilities incurred by the phoenix company during the period when the person liable was involved in the management of the company and the phoenix company was known by a pre-liquidation name of the failed company or a similar name:

(b)

in subsection (2), means the debts and liabilities incurred by the phoenix company during the period when A was acting or was willing to act on the instructions of B and the phoenix company was known by a pre-liquidation name of the failed company or a similar name.

(4)

Liability under this section is joint and several.

(5)

For the purposes of this section, a person who, as a person involved in the management of a company, has at any time acted on instructions given by a person who he or she knew at the time to be in contravention of section 386A is presumed, unless the contrary is shown, to have been willing at any later time to act on any instructions given by that person.

Compare: Insolvency Act 1986 s 217 (UK)

Section 386C: inserted, on 1 November 2007, by section 35 of the Companies Amendment Act 2006 (2006 No 56).