16 Memorandum of company with guarantee members

(1) Where a company is to be registered with a memorandum which provides
for guarantee members, the memorandum shall state that each guarantee

member is liable to contribute to the assets of the company, if it should be
wound up while he is a member or within 12 months after he ceases to be
a member, such fixed amount as may be required for the purposes specified
in subsection (2) but does not exceed a maximum amount to be specified
in the memorandum in relation to that member.

(2) The purposes to which subsection (1) refers are —

(a) payment of the debts and liabilities of the company contracted
before he ceases to be a member;

(b) payment of the costs, charges and expenses of winding up; and

(c) adjustment of the rights of the contributories among themselves.

(3) In the case of a company limited by shares and guarantee, the
memorandum or articles may —

(a) require a guarantee member also to be a shareholder; or

(b) prohibit a guarantee member from also being a shareholder.

(4) If the memorandum or articles of a company limited by shares and
guarantee do not make provision under subsection (3), a guarantee member
may also be a shareholder.

(5) A company limited by shares shall not amend its memorandum under Sub-
Part III of this Part to change its status into a company limited by guarantee
or company limited by shares and guarantee unless —

(a) there is no unpaid liability on any of its issued shares; and

(b) the company‘s proposed amended memorandum and change of
status, including any proposed cancellation of shares, has been
approved by unanimous resolution of members or, if permitted
by its memorandum, by ordinary resolution.