COMPANIES ACT (NORTHERN IRELAND) 1960 - SECT 298 Liability where proper accounts not kept.

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COMPANIES ACT (NORTHERN IRELAND) 1960 - SECT 298

Liability where proper accounts not kept.

298.(1) If in the course of the winding up of a company it appears that any
business of the company has been carried on with intent to defraud creditors
of the company or creditors of any other person or for any fraudulent purpose,
the court, on the application of [the Official Assignee or] the liquidator or
any creditor or contributory of the company, may, if it thinks proper so to
do, declare that any persons who were knowingly parties to the carrying on of
the business in manner aforesaid shall be personally responsible, without any
limitation of liability, for all or any of the debts or other liabilities of
the company as the court may direct.

On the hearing of an application under this sub-section [the liquidator] may
himself give evidence or call witnesses.

(2) Where the court makes any such declaration, it may give such further
directions as it thinks proper for the purpose of giving effect to that
declaration, and in particular may make provision for making the liability of
any such person under the declaration a charge on any debt or obligation due
from the company to him, or on any mortgage or charge or any interest in any
mortgage or charge on any assets of the company held by or vested in him, or
any company or person on his behalf, or any person claiming as assignee from
or through the person liable or any company or person acting on his behalf,
and may from time to time make such further order as may be necessary for the
purpose of enforcing any charge imposed under this sub-section.

For the purpose of this sub-section, "assignee" includes any person to whom or
in whose favour, by the directions of the person liable, the debt, obligation,
mortgage or charge was created, issued or transferred or the interest created,
but does not include an assignee for valuable consideration (not including
consideration by way of marriage) given in good faith and without notice of
any of the matters on the ground of which the declaration is made.

[(2A) Where, on making a declaration under sub-section (1), the court so
directs, the liability of any person under the declaration shall be deemed to
be a debt payable to the liquidator or to a creditor, as the court may
determine.]

(3) Where any business of a company is carried on with such intent or for such
purpose as is mentioned in sub-section (1), every person who was knowingly a
party to the carrying on of the business in manner aforesaid, shall be liable
on conviction on indictment to imprisonment for a term not exceeding two years
or to a fine not exceeding five hundred pounds or to both.

(4) This section shall have effect notwithstanding that the person concerned
may be criminally liable in respect of the matters on the ground of which the
declaration is to be made.

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Northern Irish Legislation

COMPANIES ACT (NORTHERN IRELAND) 1960 - SECT 298