Section 312 CAMA 2020
Section 312 Companies and Allied Matters Act is about Liabilities arising from contravention of section 310. It is under Chapter 11 (Directors) of the Act.
(1) An arrangement entered into by a company in contravention of section 310 of this Act and any transaction entered into in pursuance of the arrangement (whether by the company or any other person), is voidable at the instance of the company or voidable by a court on its decision on a claim by members, unless one or more of the conditions specified in subsection (2) is satisfied.
(2) The conditions are that—
(a) restitution of any money or other asset which is the subject-matter of the arrangement or transaction is no longer possible or the company has been indemnified in pursuance of this section by any other person for the loss or damage suffered by it ;
(b) any right acquired bona fide for value and without actual notice of the contravention by any person who is a party to the arrangement or transaction would be affected by its avoidance ; or
(a) to account to the company for any gain which he has made and any loss or damage suffered by the company, directly or indirectly by the arrangement or transaction,
(b) directly and derivatively to members of the company for any loss or damage suffered by them,
(c) jointly and severally with any other person liable under this subsection,to indemnify the company for any loss or damage resulting from the arrangement or transaction,where found guilty and convicted of an offence guilty of the office, disqualified to serve as a director of the company.
(4) In any action referred to in this section the plaintiff has the right to obtain any relevant documents from the defendant and the witnesses at trial,and may request categories of documents from such person without identifying specific documents.
(5) This section is without prejudice to any liability imposed than by this section, and is subject to subsections (6)-(7) and the liability under subsection(3) arises whether or not the arrangement or transaction entered into has been avoided under subsection (1) of this section.
(6) If an arrangement is entered into by a company and a person connected with a director of the company or its holding company in contravention of section 310 of this Act, that director is not liable under subsection (3) if he shows that he took all reasonable steps to secure the company’s compliance with that section.
(7) This section has effect with respect to references in sections 310,311 and 312 of this Act to a person being “connected” with a director of a company, and to a director being “associated with” or “controlling” a body corporate.
(8) A person is connected with another person if he is—
(a) that other person’s spouse, child or step-child, including illegitimate child ;
(b) a body corporate with which the person is associated ; or
(c) a person acting in his capacity as trustee of any trust, the beneficiaries of which include—
(i) the director, his spouse, any children or step-children, or
(ii) a body corporate with which he is associated, or of a trust whose terms confer a power on the trustees that may be exercised for the benefit of the person, his spouse or any children or step-children of his,or any such body corporate ; or
(d) a person acting in his capacity as partner of that director or of any person who, by virtue of paragraphs (a), (b) or (c), is connected with that director.
