S.L. 386.15 Art. 23Transformation and division.

(1) A limited liability company may, by extraordinary resolution in accordance with article 79 of the Act and any other applicable provisions of the Act, and in compliance with these regulations, and provided it is authorised to do so by its memorandum of association, be transformed:

(a) from a non-cellular company into a recognised incorporated cell company or into an incorporated cell;

(b) from a recognised incorporated cell company having no incorporated cells or from an incorporated cell, into a non-cellular company;

(c) from a segregated multi-fund company established under the Act and regulation 9 of the SICAV Regulations into an incorporated cell;

(d) from an incorporated cell into a segregated multi-fund company: Provided that a transformation from a non-cellular SICAV into a recognised incorporated cell company, or vice versa, shall be prohibited.

(2) (a) A segregated multi-fund company established under the Act and regulation 9 of the SICAV Regulations which has one or more segregated sub-funds may, in accordance with Part IX of the Act and any other applicable provisions of the Act, and in compliance with these regulations, be divided into one or more incorporated cells of a recognised incorporated cell company.

(b) Where a segregated multi-fund company is divided in accordance with paragraph (a), the non-cellular assets, rights, liabilities and obligations of the company and all claims, actions and legal proceedings concerning the non-cellular part of the company shall be allocated and delivered to the recipient incorporated cell; and the assets, rights, liabilities and obligations of each segregated sub-fund and all claims, actions and legal proceedings concerning each segregated sub-fund shall be allocated and delivered to a separate recipient company constituting an incorporated cell.

(3) (a) A company shall not carry out any of the operations mentioned in sub-regulation (1), except with the approval of the board of directors.

(b) In a division of a segregated multi-fund company as referred to in sub-regulation (2), each of the directors of the company shall sign a declaration stating that he has made a full enquiry into the affairs of the company and each of its segregated sub-funds, and that, having so done, he is of the opinion that the company and each of its segregated sub-funds are able to discharge their liabilities as they fall due and that there are no creditors of the company or of the segregated sub-funds whose interests will be unfairly prejudiced by the division.

(4) The operations mentioned in sub-regulations (1) and (2) shall not be carried out except with the prior written approval of the competent authority and in accordance with such terms and conditions as the competent authority may establish and such directives as the competent authority may issue.

(5) (a) A non-cellular company that intends to transform itself into an incorporated cell shall enter into an incorporation agreement with a recognised incorporated cell company. The incorporation agreement shall be approved by:

(i) the board of directors and by an extraordinary resolution of both the non-cellular company and the recognised incorporated cell company; and

(ii) the competent authority.

(b) An incorporated cell that intends to transform itself into a non-cellular company shall, within fourteen days of the extraordinary resolution taken to so transform, notify its recognised incorporated cell company in writing of such decision.

(6) In addition to any document which is required to be delivered to the Registrar for registration in accordance with the applicable provisions of the Act, a company which intends to carry out:

(a) any of the operations mentioned in sub-regulations (1) and (2), shall deliver to the Registrar for registration evidence of the written approval of the competent authority required under sub-regulation (4);

(b) any of the operations mentioned in sub-regulation (1), shall deliver to the Registrar for registration evidence of the approval by the board of directors required under sub-regulation (3)(a);

(c) the operation mentioned in sub-regulation (2), shall deliver to the Registrar for registration the declaration mentioned in sub-regulation (3)(b).