1056. Transfer of cells of cell companies

(1) A cell of a cell company may be transferred to another cell company.
(2) The cell companies shall enter into a written agreement that sets out the terms of the transfer (in this section referred to as the "transfer agreement").
(3) A transfer of a cell is approved when the directors of each cell company have approved the transfer agreement and the agreement is approved by a special resolution of the cell company to which the cell is being transferred and—
(a) when the transfer agreement is consented to by all the members of the cell being transferred and all the creditors (if any) of that cell, or
(b) if the agreement of all the creditors of the cell cannot be obtained, when the transfer is authorised by a special resolution of the cell and sanctioned by the Court on it being satisfied that no creditor of the cell will be materially prejudiced by the transfer.
(4) Within 14 days of a transfer agreement being approved, the cell company to which the cell is being transferred must deliver to the Registrar in accordance with section 27 (resolutions or agreements to be forwarded to Registrar) a copy of the special resolution of that company approving the transfer agreement together with—
(a) a copy of the transfer agreement,
(b) a copy of any new articles of the cell being transferred,
(c) such evidence as the Registrar may require that the transfer of such cell has been approved by the Financial Services Regulator, and
(d) a declaration made in accordance with subsection (5), signed by each director of the cell company transferring the cell.
(5) The declaration must state that each such director believes on reasonable grounds that—
(a) the cell being transferred is able to discharge its liabilities as they fall due,
(b) there are no creditors of the cell company from which the cell is being transferred whose interests will be unfairly prejudiced by the merger, and
(c) the transfer agreement has been approved in accordance with this section.
(6) If a cell company fails to deliver the documents set out in subsection (4) within the period mentioned in that subsection, a contravention of these Regulations is committed by it and every officer of it in default.
(7) A person who commits the contravention referred to in subsection (6) shall be liable to a level 2 fine.
(8) If a director makes a declaration under subsection (5) without having the grounds to do so, a contravention of these Regulations is committed by him.
(9) A person who commits the contravention referred to in subsection (8) shall be liable to a fine of up to level 5.
(10) Section 1049(2) shall apply in respect of the documents delivered to the Registrar in accordance with subsection (4) as if the documents were a special resolution filed in accordance with section 1049(1).
(11) Upon delivery to the Registrar of the documents referred to in subsection (4), the Registrar shall, if those documents comply with this section—
(a) register the transfer of the cell and any new articles of the cell,
(b) issue to the cell a new certificate of incorporation or recognition in accordance with section 1049(1), and
(c) record that the cell has ceased to be a cell of the company that transferred the cell.
(12) Upon the issue of the new certificate of incorporation or recognition, by virtue of such issue—
(a) the cell ceases to be a cell of the cell company that transferred it,
(b) the cell becomes a cell of the company to which it has been transferred,
(c) the articles of the cell shall be as provided for in the transfer agreement,
(d) where the cell was a cell of an incorporated cell company, all property and rights to which the cell was entitled immediately before the issue of the new certificate remain the property and rights of the cell if the transfer is to an incorporated cell company or, if the transfer is to a protected cell company, become the property and rights of that company in respect of the cell,
(e) where the cell was a cell of an incorporated company, the liabilities, and all contracts, debts and other obligations to which the cell was subject immediately before the issue of the new certificate remain the liabilities, contracts, debts and other obligations of the cell if the transfer is to an incorporated cell company or if the transfer is to a protected cell company, become the liabilities, contracts, debts and other obligations of that company in respect of the cell,
(f) where the cell was a cell of an incorporated cell company, all actions and other legal proceedings which, immediately before the issue of the new certificate were pending by or against the cell may be continued by or against the cell if the transfer is to an incorporated cell company or, if the transfer is to a protected cell company by or against that company in respect of the cell,
(g) where the cell was a cell of a protected cell company, all property and rights of that company in respect of the cell immediately before the issue of the new certificate become the property and rights of the cell if the transfer is to an incorporated cell company or, if the transfer is to a protected cell company, the property and rights of that company in respect of that cell,
(h) where the cell was a cell of a protected cell company, all liabilities, contracts, debts and other obligations of that company in respect of the cell, to which the protected cell company was subject immediately before the issue of the new certificate, become the liabilities, contracts, debts and other obligations of the cell if the transfer is to an incorporated cell company or, if the transfer is to a protected cell company, the liabilities, contracts, debts and other obligations of that company in respect of the cell, and
(i) where the cell was a cell of a protected cell company, all actions and other legal proceedings that, immediately before the issue of the new certificate, were pending by or against the protected cell company in respect of the cell may be continued by or against the cell if the transfer is to an incorporated cell company or, if the transfer is to a protected cell company, against that company is respect of the cell.
(13) The operation of subsection (12) shall not be regarded as giving rise to any —
(a) breach of contract or confidence or otherwise as a civil wrong,
(b) breach of any contractual provision prohibiting, restricting or regulating the assignment or transfer of rights or liabilities, or
(c) remedy by a party to a contract or other instrument, as an event of default under any contract or other instrument or as causing or permitting the termination of any contract or other instrument, or of any obligation or relationship.
(14) A cell may not be transferred under this section if the transfer would be inconsistent with the articles of the cell, the cell company transferring the cell or the cell company to which it is to be transferred.
(15) A company that is not a cell company and a cell company may enter into an agreement to provide that the company that is not a cell company shall become a cell of the cell company.
(16) Where subsection (15) applies—
(a) the agreement mentioned in that paragraph shall have effect for the purpose of this section as if it were a transfer agreement, and
(b) this section shall otherwise apply in respect of the transfer as if the company that is not a cell company were a cell of an incorporated cell company.