S.L. 386.14 Art. 9Establishment of incorporated cells.

(1) An incorporated cell company may establish an incorporated cell by virtue of a resolution of the board of directors (the "cell resolution") which:

(a) approves the name of the incorporated cell being established;

(b) approves the terms of the memorandum and articles of association of the incorporated cell and resolves that the said memorandum and articles of association are to be entered into by the incorporated cell company; and

(c) authorises, if applicable, the subscription by the incorporated cell company of a share or shares in the incorporated cell.

(2) An incorporated cell shall not be validly constituted unless a copy of the resolution shall be delivered to the Registrar and the memorandum and articles is entered into as is described in sub-regulation (3) and a certificate of registration is issued in terms of the Act in respect thereof.

(3) The memorandum and articles of association of an incorporated cell shall be entered into by:

(a) the incorporated cell company, whether the incorporated cell company is subscribing to a share or shares in the incorporated cell or otherwise; and

(b) such persons, other than the incorporated cell company, subscribing to shares in the incorporated cell.

(4) The memorandum of association of an incorporated cell shall state that it is an incorporated cell.

(5) The memorandum or articles of association of an incorporated cell shall contain a provision that the incorporated cell may not own shares in its incorporated cell company.

(6) Without prejudice to article 110 of the Act and unless expressly prohibited by the articles of association of the incorporated cell, an incorporated cell shall be permitted to own shares in any other incorporated cell of its incorporated cell company.