ADVOKS GLOBAL · KENYA
Insolvency Act
509. Circumstances in which persons are personally liable for debts of company
Edition: 2022-12-31 · In force
509. Circumstances in which persons are personally liable for debts of company
(1)A person is personally responsible for all the relevant debts of a company if at any time—(a)the person is involved in the management of the company in contravention of section 508; or(b)while involved in the management of the company, the person acts or is willing to act on instructions given (without the approval of the Court) by a person to whom subsection (2) applies.(2)This subsection applies to the following persons—(a)a person who is involved in the management of the company in contravention of section 508;(b)a person who is subject to a disqualification order or disqualification undertaking, or foreign restrictions, under the Companies Act (Cap. 486);(c)a person who is subject to any other restriction or disability prescribed by the insolvency regulations for the purposes of this section.(3)If, because of subsection (1), a person is personally responsible for the relevant debts of a company, the person is jointly and severally liable for those debts with the company and any other person who, whether under this section or otherwise, is so liable.(4)For the purposes of this section, the relevant debts of a company are—(a)in relation to a person who is personally responsible under paragraph (a) of subsection (1), such debts and other liabilities of the company as are incurred at a time when the person was involved in the management of the company; and(b)in relation to a person who is personally responsible under paragraph (b) of that subsection, such debts and other liabilities of the company as are incurred at a time when the person was acting or was willing to act on instructions given as referred to in that paragraph.(5)For the purposes of this section, a person is involved in the management of a company if the person—(a)is a director of the company; or(b)is concerned, whether directly or indirectly, or takes part, in the management of the company.(6)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 (without the approval of the Court) by a person to whom subsection (2) applies is presumed, unless the contrary is shown, to have been willing at any later time to act on any instructions given by that person.(7)In this section, "company" includes a company to which Part VII applies.