In what situation must a director contribute to the assets of a company?

A director must contribute to the assets of a company primarily in situations where the company is being wound up. This obligation stems from the principle that directors have a fiduciary duty to act in the best interests of the company and its creditors, particularly when it is facing financial difficulties.

During the winding-up process, the assets of the company are liquidated to pay off its debts. If a director has engaged in any misconduct, mismanagement, or failed to fulfill their fiduciary duties leading to the company's insolvency, they might be required to contribute to the company's assets to settle outstanding obligations. This is particularly important for protecting creditor interests and ensuring that directors are held accountable for their actions.

In healthy conditions or during profitable operations, there is no such requirement for directors to contribute their personal assets, as the company is capable of managing its liabilities and obligations independently. Directors retain a degree of protection from personal liability under normal circumstances unless specific misconduct is proven. This clarifies why the other options do not apply in the same manner as the obligation that arises in the context of winding up a company.