n Without Prejudice - Obligations of a surety : company law

Volume 15, Issue 1
  • ISSN : 1681-178X



While s120(3) and s129(1)(b) of the Insolvency Act, 1936, expressly provide that the liability of a surety shall not be affected by a composition or the rehabilitation of an insolvent respectively, the situation is not as clearly defined in the Companies Act, 2009. The obligations of a surety are expressly preserved notwithstanding an arrangement or compromise in s311 of the 1973 Companies Act and s155(9) of the "new" Companies Act, but the Companies Act does not address whether the obligations of a surety are discharged in the context of business rescue proceedings.

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