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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.