Cap. 386 Art. 360Division of a company by acquisition or by formation of new companies.

(1) Division of a company into two or more companies may be effected by -

(a) division by acquisition; or

(b) division by formation of new companies; or

(c) division by a combination of a division by acquisition with a division by the formation of one or more new companies.

(2) Division by acquisition is the operation whereby a company (referred to in this Part as "the company to be divided") delivers to two or more existing companies (referred to in this Part as "the recipient companies") all its assets and liabilities in exchange for the allocation to the shareholders of the company to be divided of shares in the recipient companies and a cash payment, if any, not exceeding ten per cent of the nominal value of the shares so issued.

(3) Division by formation of new companies is the same as the operation described in sub-article (2) except that the recipient companies are formed as new companies for the purposes of taking part in the division. The expression "the companies involved in a division" used in the case of a division by formation of new companies in this Part shall be interpreted as referring only to the company to be divided.

(4) Division by a combination of a division by acquisition with a division by formation of one or more new companies is the same as the operation described in sub-article (2) combined with the operation as described in sub-article (3).

(5) The company to be divided shall be dissolved without having to be wound up in accordance with the provisions of Title II of Part V of this Act; dissolution shall be deemed to take place when the division becomes effective in accordance with the provisions of article 370.

(6) The fact that the company to be divided has been dissolved voluntarily by an extraordinary resolution, and a declaration of solvency has been filed, shall not prevent that company taking part in the division provided that none of its assets have been distributed to shareholders after dissolution. Any provision of this Part requiring the directors of a company to act shall be interpreted in relation to a company which has been dissolved as requiring the liquidator to act.

(7) The fact that the company to be divided has been dissolved by the court in terms of article 214, and in the case of a voluntary winding up a declaration of solvency has not been filed, shall invalidate the division with respect to all the companies involved in the division.

(8) A division of a company may only be effected into two or more companies, and it shall not be possible to effect a division involving any other kind of commercial partnership. Chapter I - Division by acquisition