There are two circumstances
1) Under Section 2(55) when the number of members in a public are reduced below 7 and in a private company are reduced below 2 and if the company carries on business for more than 6 months then all the members who knew of this reduced membership are liable to an unlimited extent for all the debts of the company taken after the term of 6 months.
2) Under Section 339 if during winding up of the company it is found that business of the company was carried on to defraud the creditors or for a fraudulent purpose, the liability of all the members automatically becomes unlimited for all the debts incurred by the company.
1) Under Section 2(55) when the number of members in a public are reduced below 7 and in a private company are reduced below 2 and if the company carries on business for more than 6 months then all the members who knew of this reduced membership are liable to an unlimited extent for all the debts of the company taken after the term of 6 months.
2) Under Section 339 if during winding up of the company it is found that business of the company was carried on to defraud the creditors or for a fraudulent purpose, the liability of all the members automatically becomes unlimited for all the debts incurred by the company.
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