Change of Liability

(1) No society with limited liability shall change itself into a Society with unlimited liability. (2) Subject to the provision of sub-section (1), a society may change the form and extent of its liability by an amendment of its bye-laws in the manner prescribed. (3) When a society has amended its bye-laws under sub-section (2), it shall give notice thereof in writing to all its members and creditors and notwithstanding any bye-law or contract to the contrary any member or creditor shall, within a period of 30 days from the date of service of the notice upon him, have the option to withdraw his shares or deposits or recall the loans, as the case may be. (4) Any member or creditor who does not exercise his option within the period specified in sub-section (3) shall be deemed to have assented to the change. (5) An amendment of the bye-laws of a society changing the form or extend of its liability shall not be registered or take effect until either - (a) the assent thereto of all members and creditors has been obtained or is deemed to have been obtained; or (b) all claims of members and creditors who exercise the option referred to in sub-section (3) within the period specified therein have been met in full.