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CORPORATIONS ACT 2001 - SECT 254M

Liability on partly - paid shares

General rule about shareholder's liability for calls

  (1)   If shares in a company are partly - paid, the shareholder is liable to pay calls on the shares in accordance with the terms on which the shares are on issue. This subsection does not apply to a no liability company.

Note:   The shareholder may also be liable as a contributory under sections   514 - 529 if the company is wound up.

No liability companies

  (2)   The acceptance by a person of a share in a no liability company, whether by issue or transfer, does not constitute a contract by the person to pay:

  (a)   calls in respect of the share; or

  (b)   any contribution to the debts and liabilities of the company.


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