Change of liability

Corporate2024155 sections12 chapters

Chapter II REGISTRAR AND REGISTRATION

Statutory text

(1) Subject to the provisions of this Regulation and the rules made thereunder, a society may, by passing a resolution and by amending its bye-laws, change the form or extent of its liability.
(2) When a society has passed a resolution to change the form or extent of its liability, it shall give notice thereof in writing to all its members and creditors and, notwithstanding anything in any bye-laws or contract to the contrary, any member or creditor shall, during a period of thirty days from the date of service of such notice upon him, have the option of withdrawing his investment in its shares, and his deposits and loans, and of demanding the payment of his other dues, if any: Provided that conversion of society from limited to unlimited liability shall not be permitted in any circumstances.
(3) Any member or creditor who does not exercise his option within the period specified in sub-section (2), shall be deemed to have assented to the change.
(4) An amendment of the bye-laws of a society, changing the form or extent of its liability, shall not be registered or take effect until, either—
- (a) all members and creditors have assented, or deemed to have assented, thereto as aforesaid; or
- (b) all claims of members and creditors exercising the option, under sub-section (2) have been complied in toto.

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