As enacted

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Companies Act 2007 · As enacted · Part VII · Management and Administration Registered Office

219. Duty of directors on insolvency

Official English translation. Where it differs from the Sinhala or Tamil text, the Act itself says which text prevails.

(1)

A director of a company who believes that the company is unable to pay its debts as they fall due, shall forthwith call a meeting of the board to consider whether the board should apply to court for the winding up of the company and the appointment of a liquidator or an administrator or carry on further the business of the company.

(2)

Where a director referred to in subsection (1) fails to comply with the requirement of that subsection and at the time of that failure the company was unable to pay its debts as they fell due, and the company is subsequently placed in liquidation, the court may on the application of the liquidator or of a creditor of the company, make and order that the director shall be liable for the whole or any part of any loss suffered by creditors of the company as a result of the company continuing to carry on its business.

(3)

If—

(a)

at a meeting called under subsection (1) the board does not resolve to apply to court for the winding up of the company and for the appointment of a liquidator or an administrator;

(b)

at the time of that meeting there were no reasonable grounds for believing that the company was able to pay its debts as they fell due; and

(c)

the company is subsequently placed in liquidation, the court may, on the application of the liquidator or of a creditor of the company, make an order that the directors, other than those directors who attended the meeting and voted in favour of applying to court for the winding up of the company and for the appointment of the liquidator or an administrator, shall be liable for the whole or any part of any loss suffered by creditor of the company as a result of the company continuing to carry on its business.

Read on from s 220

Part VIII

Amalgamations

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Part IX

Compromises with Creditors

Read on from Part IX

Part X

Approval of Arrangements, Amalgamations, and Compromises by Court

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Part XI

Provisions Relating to Offshore Companies

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Part XII

Winding Up

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Part XIII

Administrators Appointment of Administrator

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Part XIV

Floating Charges

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Part XV

Receivers and Managers

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Part XVI

Registrar-General of Companies and Registration Appointment of Officers

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Part XVII

Application of Act to Existing Companies

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Part XVIII

Overseas Companies

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Part XIX

Advisory Commission

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Part XX

Companies Disputes Board

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Part XXI

Offences Miscellaneous Offences

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Part XXII

Miscellaneous Prohibition of Partnership with More Than Twenty Members

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Part XXIII

Repeals and Amendments

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