• CHAPTER 2 CHAPTER 2 PROTECTED CELL COMPANIES

    • 1060. Status of cells of protected cell companies

      (1) A cell of a protected cell company is not a body corporate and has no legal identity separate from that of its cell company.
      (2) However, a cell of a protected cell company may enter into an agreement with its cell company or with another cell of the company that shall be enforceable as if each cell of the company were a body corporate that had a legal identity separate from that of its cell company.

    • 1061. Membership of protected cell company

      (1) In a protected cell company—
      (a) its non-cell members are members of the company but are not, by virtue of being such members, members of any cell of the company, and
      (b) the cell members of a cell created by the company are members of that cell but are not, by virtue of being such members, members of the company or of any other cell of the company.
      (2) In subsection (1)—

      "cell member", in respect of a protected cell company, means—
      (a) a registered holder of a share in a cell of the company, or
      (b) a guarantee member of a cell of the company,
      "non-cell member", in respect of a protected cell company, means—
      (a) a registered holder of a share in the company that is not a share in a cell of the company, or
      (b) a guarantor member of the company who is not a guarantor member of the company by virtue of being a guarantee member of a cell of the company.

    • 1062. Additional duties of directors of protected cell companies

      (1) A director of a protected cell company must exercise his powers and must discharge his duties in such a way as shall best ensure that—
      (a) the cellular assets of the company are kept separate and are separately identifiable from the non-cellular assets of the company, and
      (b) the cellular assets attributable to each cell of the company are kept separate and are separately identifiable from the cellular assets attributable to other cells of the company.
      (2) A director of a protected cell company must ensure, when the company enters into an agreement in respect of a cell of the company—
      (a) that the other party to the transaction knows or ought reasonably to know that the cell company is acting in respect of a particular cell, and
      (b) that the minutes of any meeting of directors held with regard to the agreement clearly record the fact that the company was entering into the agreement in respect of the cell and that the obligation imposed by subsection (a) was or will be complied with.
      (3) If a director fails to comply with the requirements of subsection (1) or subsection (2), a contravention of these Regulations is committed by him.
      (4) A person who commits the contravention referred to in subsection (3) shall be liable to a fine of up to level 4.
      (5) The duties of a director of a protected cell company under this section are in addition to those under Chapters 2 and 3 of Part 10 (general duties of directors, etc.) of these Regulations.

    • 1063. Names of protected cell companies

      (1) The name of a protected cell company must end with the words 'Protected Cell Company' or with the abbreviation 'PCC'.
      (2) A company that is registered with a name that ends with the words 'Protected Cell Company' or the abbreviation 'PCC' may, in setting out or using its name for any purpose under these Regulations, do so in full or in the abbreviated form, as it determines.
      (3) A protected cell company must assign a distinctive name to each of its cells that—
      (a) distinguishes the cell from any other cell of the company, and
      (b) ends with the words 'Protected Cell' or with the abbreviation 'PC'.
      (4) Sections 52 and 53 (specifying how the name of a limited company must end) shall not apply to a cell of a protected cell company where the cell has the features of a limited company.

    • 1064. Liability of protected cell company and its cells

      (1) Except as provided by subsections (2) and (4), a protected cell company has no power—
      (a) to meet any liability attributable to a particular cell of the company from the non-cellular assets of the company, or
      (b) to meet any liability, whether attributable to a particular cell or not, from the cellular assets of another cell of the company.
      (2) If—
      (a) a protected cell company is permitted to do so under its articles, and
      (b) the requirement set out in subsection (3) is satisfied,
      the company may meet any liability attributable to a particular cell of the company from the company's non-cellular assets.
      (3) The requirement mentioned in subsection (2)(b) is that prior to the protected cell company meeting any liability attributable to the particular cell from the company's non-cellular assets the directors who are to authorise the liability being met in such a way must make a statement that, having made full enquiry into the affairs and prospects of the company, they reasonably believe—
      (a) that the company will be able to discharge its liabilities as they fall due, and
      (b) that, having regard to—
      (i) the prospects of the company,
      (ii) the intentions of the directors with respect to the management of the company's business, and
      (iii) the amount and character of the financial resources that will in the directors' view be available to the company,
      the company will be able to—
      (A) continue to carry on business, and
      (B) discharge its liabilities as they fall due,
      until the expiry of the period of 12 months immediately following the date on which the statement is signed.
      (4) A protected cell company may meet any liability, whether attributable to a particular cell or not, from the cellular assets of another cell if—
      (a) it is permitted to do so by the articles of that other cell, and
      (b) the requirement set out in subsection (5) is satisfied.
      (5) The requirement mentioned in subsection (4)(b) is that prior to the protected cell company meeting any liability from the cellular assets of that other cell the directors who are to authorise the liability being met in such a way must make a statement that, having made full enquiry into the affairs and prospects of that cell, they reasonably believe—
      (a) that the cell will be able to discharge its liabilities as they fall due, and
      (b) that, having regard to—
      (i) the prospects of the cell,
      (ii) the intentions of the directors with respect to the management of the cell's business, and
      (iii) the amount and character of the financial resources that will in the directors' view be available to the cell,
      the company will be able to—
      (A) continue to carry on business, and
      (B) discharge its liabilities as they fall due,
      until the expiry of the period of 12 months immediately following the date on which the statement is signed.
      (6) If a director makes a statement under subsection (3) or subsection (5) without having reasonable grounds for the opinion expressed in the statement, a contravention of these Regulations is committed by him.
      (7) A person who commits the contravention referred to in subsection (6) shall be liable to a fine of up to level 4.

    • 1065. Protection of cellular and non-cellular assets of protected cell companies

      (1) Where a creditor of a protected cell company has a claim against the company in respect of a particular cell of the company (in this section called "the relevant cell") by virtue of a transaction to which section 1050(10) applies, only the cellular assets of the company held by it in respect of the relevant cell shall be available to the creditor.
      (2) Where a creditor of a protected cell company has a claim against the company by virtue of a transaction to which section 1050(10) does not apply, the cellular assets of the company shall not be available to the creditor.
      (3) Accordingly—
      (a) a creditor of the company to whom subsection (1) applies only has the right to seek by proceedings or by any other means, whether in the Abu Dhabi Global Market or elsewhere, to make or attempt to make the cellular assets of the company held by it in respect of the relevant cell available for all or any part of the amount owed to the creditor, and
      (b) a creditor of the company to whom subsection (2) applies has no right to seek by proceedings or by any other means, whether in the Abu Dhabi Global Market or elsewhere, to make or attempt to make the cellular assets of the company available for all or any part of the amount owed to the creditor.
      (4) If a creditor of a protected cell company to whom subsection (1) applies succeeds, whether in the Abu Dhabi Global Market or elsewhere, in making available for all or any part of the amount owed to the creditor any assets of the company that are not its cellular assets held by it in respect of the relevant cell, the creditor shall be liable to pay to the company an amount equal to the benefit so obtained.
      (5) If a creditor of a protected cell company to whom subsection (2) applies succeeds, whether in the Abu Dhabi Global Market or elsewhere, in making available for all or any part of the amount owed to the creditor any cellular assets of the company, the creditor shall be liable to pay to the company an amount equal to the benefit so obtained.
      (6) Any amount recovered by a protected cell company in respect of a cell of the company by virtue of subsection (4) or subsection (5), and the right to claim that amount, shall form part of the cellular assets of the company held by it in respect of the cell.
      (7) If a creditor of a protected cell company to whom subsection (1) applies succeeds, whether in the Abu Dhabi Global Market or elsewhere in seizing or attaching or otherwise levying execution against any assets of the company, that are not its cellular assets held by it in respect of the relevant cell, for all or any part of the amount owed to the creditor, the creditor shall hold those assets or their proceeds on trust for the company or, as the case may be, the cell of the company whose cellular assets were wrongfully seized or attached.
      (8) If a creditor of a protected cell company to whom subsection (2) applies succeeds, whether in the Abu Dhabi Global Market or elsewhere in seizing or attaching or otherwise levying execution against any cellular assets of the company for all or any part of the amount owed to the creditor, the creditor shall hold those assets or their proceeds on trust for the cell of the company whose cellular assets were wrongfully seized or attached.
      (9) Where subsection (7) or subsection (8) applies, the creditor must—
      (a) keep the assets so held on trust separated and identifiable as trust property, and
      (b) pay or return them on demand to the protected cell company.
      (10) If a creditor fails to comply with the provisions of subsection (9), a contravention of these Regulations is committed by him.
      (11) A person who commits the contravention referred to in subsection (10) shall be liable to a level 3 fine.
      (12) Any amount recovered by a protected cell company by virtue of a trust mentioned in subsection (7) shall form part of the non-cellular assets of the company or, as the case may be, the cellular assets of the cell of the company whose cellular assets were wrongfully seized or attached.
      (13) Any amount recovered by a protected cell company by virtue of a trust mentioned in subsection (8) shall form part of the cellular assets of the cell of the company whose cellular assets were wrongfully seized or attached.
      (14) If a creditor becomes liable to pay an amount or to return assets to a protected cell company under subsection (4), subsection (5) or subsection (9)(b) and no amount or an insufficient amount is received, or no assets or less than all the assets are recovered, the company must cause or procure an auditor, acting as an expert and not as an arbitrator, to certify the loss suffered by the company and then, as the case may be—
      (a) transfer to the company from the cellular assets of the relevant cell, if the liability was attributable to it, an amount sufficient to make good the loss suffered by the company's cellular or non-cellular assets, as the case may be, or
      (b) transfer from its non-cellular assets, if the liability was attributable to them an amount sufficient to make good the loss suffered by its the cellular assets.
      (15) Where an amount transferred by virtue of subsection (14)(a) was in respect of a loss suffered by the company's cellular assets, the amount transferred shall be transferred to the cell of the company whose cellular assets were wrongfully made available to a creditor or seized, attached or executed against.
      (16) An amount transferred by virtue of subsection (14)(b) shall be transferred to the cell of the company whose cellular assets were wrongfully made available to a creditor or seized, attached or executed against.
      (17) If a company fails to comply with subsection (14), (15) or (16), a contravention of these Regulations is committed by the company and every officer of it who is in default.
      (18) A person who commits the contravention referred to in subsection (17) shall be liable to a level 3 fine.
      (19) Subsections (4) to (16) do not apply to any payment made to a creditor by a protected cell company in accordance with section 1064(2) or section 1064(4).

    • 1066. Effect of commencement of summary winding up of protected cell company

      (1) Where a protected cell company is being wound up, section 195(1) (effect on business and status of company) of the Insolvency Regulations 2015 (effect on business and status of company) shall not apply in respect of any cell of the company.
      (2) Where a cell of a protected cell company is being wound up, section 195(1) (effect on business and status of company) of the Insolvency Regulations 2015 shall not apply in respect of the company or any other cell of the company.

    • 1067. Court may determine liability of protected cells companies

      The Court, on the application of a protected cell company, may determine, in accordance with this Part, if a liability of the company is to be met by its non-cellular assets, by the cellular assets of a specific cell of the company or by a combination of those assets.

    • 1068. Definitions relevant to this Part

      In this Part:

      "cell" means a cell of a cell company,

      "cell company" means a company that is an incorporated cell company or a protected cell company,

      "cellular assets", in respect of a protected cell company, means the assets of the company attributable solely to the cell or cells of the company,

      "cellular liabilities", in respect of a protected cell company, means the liabilities of the company attributable solely to a cell or cells of the company,

      "class of members", in respect of a protected cell company, includes—

      (a) the members of a cell of the company, and
      (b) any class of members of a cell of the company,

      "incorporated cell company" means a company to which section 1047(1) applies,

      "non-cellular assets", in respect of a protected cell company, means its assets that are not its cellular assets,

      "non-cellular liabilities", in respect of a protected cell company, means its liabilities that are not its cellular liabilities.

      "protected cell company" means a company to which section 1047(2) applies.