Incorporated Cell Companies Act 2010

Link to law: https://legislation.gov.im/cms/images/LEGISLATION/PRINCIPAL/2010/2010-0013/IncorporatedCellCompaniesAct2010_1.pdf
Published: 2012-09-01

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Incorporated Cell Companies Act 2010

c i e
AT 13 of 2010

INCORPORATED CELL COMPANIES ACT

2010

Incorporated Cell Companies Act 2010 Index


c AT 13 of 2010 Page 3

c i e
INCORPORATED CELL COMPANIES ACT 2010

Index Section Page

PART 1 – OPENING PROVISIONS 5

1 Short title .......................................................................................................................... 5
2 Commencement .............................................................................................................. 5
3 Interpretation ................................................................................................................... 5
PART 2 – FORMATION AND NATURE OF ICC 7

4 Formation of ICC ............................................................................................................ 7
5 Name of ICC .................................................................................................................... 8
6 Memorandum of ICC ..................................................................................................... 8
7 Incorporation of ICC ...................................................................................................... 8
8 Nature of ICC .................................................................................................................. 9
PART 3 – FORMATION AND NATURE OF IC 9

9 Formation of IC ............................................................................................................... 9
10 Name of IC ....................................................................................................................... 9
11 Memorandum of IC ...................................................................................................... 10
12 Incorporation of IC ....................................................................................................... 10
13 Nature of IC ................................................................................................................... 10
PART 4 – SEPARATE NATURE OF ICC AND ITS ICS 11

14 Separation of assets and liabilities .............................................................................. 11
15 Transactions ................................................................................................................... 11
PART 5 – WINDING UP 12

16 Winding up of ICC not to prejudice its ICs............................................................... 12
17 Directors of IC during winding up of its ICC ........................................................... 12
18 No dissolution of ICC until position of its ICs resolved ......................................... 12
19 Alternative dissolution procedure ............................................................................. 12
PART 6 – MODIFICATIONS 13

20 Amendment of constitution of ICs ............................................................................. 13
Index Incorporated Cell Companies Act 2010


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21 Conversion of company into ICC .............................................................................. 13
22 Conversion of PCC into ICC ....................................................................................... 14
23 Conversion of IC into company ................................................................................. 17
24 Transfer of ICs between ICCs ..................................................................................... 18
25 Conversion of company into IC and transfer to ICC .............................................. 20
26 Expulsion of IC from ICC ............................................................................................ 21
27 Documents provided to Department ........................................................................ 22
28 Conversions, transfers or expulsions not a default ................................................. 22
PART 7 – GENERAL PROVISIONS 22

29 Application for directions ........................................................................................... 22
30 False and misleading statements ............................................................................... 22
31 Offences by bodies corporate ..................................................................................... 23
32 Subordinate legislation ................................................................................................ 23
33 Tynwald procedure ...................................................................................................... 24
34 Fees and forms .............................................................................................................. 25
35 Financial provisions ..................................................................................................... 25
36 Amendment of the Financial Services Act 2008 ......................................................... 25
SCHEDULE 1 27

APPLICATION OF THE 1931 LEGISLATION TO ICS 27
SCHEDULE 2 31

APPLICATION OF THE 2006 LEGISLATION TO ICS 31
ENDNOTES 33

TABLE OF LEGISLATION HISTORY 33
TABLE OF RENUMBERED PROVISIONS 33
TABLE OF ENDNOTE REFERENCES 33

Incorporated Cell Companies Act 2010 Section 1


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c i e
INCORPORATED CELL COMPANIES ACT 2010

Received Royal Assent: 14 December 2010
Passed: 14 December 2010
Commenced: 1 June 2011
AN ACT
to provide for the incorporation of companies as incorporated cell
companies and incorporated cells; for the conversion of companies into
incorporated cell companies and incorporated cells; and for connected
purposes.
PART 1 – OPENING PROVISIONS

1 Short title

The short title of this Act is the Incorporated Cell Companies Act 2010.
2 Commencement

(1) This Act (other than this section and section 1) comes into operation on
such day as the Treasury by order appoints and different days may be
appointed for different provisions and for different purposes.1

(2) An order under subsection (1) may make such transitional and saving
provisions as the Treasury considers necessary or expedient.
3 Interpretation

(1) In this Act —
“the 1931 Act
” means the Companies Act 1931;
“the 1931 legislation
” means the Companies Acts 1931 to 2004;
“the 1968 Act
” means the Companies Act 1968;
“the 1982 Act
” means the Companies Act 1982;
“the 1992 Act
” means the Companies Act 1992;
“the 2004 Act
” means the Protected Cell Companies Act 2004;
Section 3 Incorporated Cell Companies Act 2010


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“the 2006 Act
” and “the 2006 legislation
” means the Companies Act 2006;
“cell resolution
” means —
(a) a special resolution of an ICC incorporated under the 1931 legislation; or
(b) a members’ resolution of an ICC incorporated under the 2006 legislation,
complying with the requirements of section 9, creating an incorporated cell;
“certificate of conversion from PCC into ICC
” means a certificate issued by the
Department under section 22(11);2

“certificate of conversion into IC
” means a certificate issued by the Department
under section 25(10);3

“certificate of conversion into ICC
” means a certificate issued by the
Department under section 21(9);4

“certificate of conversion of IC into company
” means a certificate issued by the
Department under section 23(7);5

“certificate of transfer of IC
” means a certificate issued by the Department
under section 24(8);6

“Commission
” [Repealed]7

“Court
” means the High Court;
“creditors
” includes present, future and contingent creditors;
“Department
” means the Department of Economic Development;8

“IC
” and “incorporated cell
” means a cell of an ICC;
“ICC
” and “incorporated cell company
” means a company incorporated as, or
converted into, an incorporated cell company in accordance with this
Act;
“liability
” includes any debt or obligation;
“members’ resolution
” has the same meaning as in section 65 of the 2006 Act;
“non-cellular company
” means a company which is neither an ICC nor a PCC;
“prescribed
” means prescribed by order or regulations of the Treasury under
section 32;
“PCC
” and “protected cell company
” have the same meaning as in —
(a) the 2004 Act, in the case of a company incorporated under the
1931 legislation; or
(b) the 2006 Act, in the case of a company incorporated under the
2006 legislation;
“published
” means published by the Department in a manner likely to bring it
to the attention of those affected;9

“special resolution
” has the same meaning as in section 116 of the 1931 Act;
Incorporated Cell Companies Act 2010 Section 4


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“transaction
” means anything (including, without limitation, any agreement,
arrangement, dealing, disposition, circumstance, event or relationship)
where any liability arises or is imposed;
“transfer agreement
” means an agreement either between —
(a) two ICCs setting out the terms of the transfer of an IC between
them, in accordance with section 24; or
(b) an ICC and a non-cellular company setting out the terms of the
transfer of the non-cellular company as an IC to the ICC, in
accordance with section 25;
“transfer of domicile
” means —
(a) the continuation of foreign companies as companies incorporated
under the 1931 legislation or the 2006 legislation (as the context
requires);
(b) the discontinuation of companies incorporated under the 1931
legislation or the 2006 legislation (as the context requires) and the
continuation of such companies in countries or territories outside
the Island.
(2) Expressions used in this Act have the same meanings as in —
(a) the 1931 legislation, in the case of a company incorporated under
the 1931 legislation; and
(b) the 2006 legislation, in the case of a company incorporated under
the 2006 legislation,
unless the context requires otherwise.
PART 2 – FORMATION AND NATURE OF ICC

4 Formation of ICC

(1) A company may be incorporated as an incorporated cell company (an
“ICC
”) under the 1931 legislation or the 2006 legislation.
(2) A company may be incorporated as an ICC only if it is a company
limited by shares.
(3) The 1931 legislation applies in respect of an ICC incorporated under the
1931 legislation as it applies in respect of any other company
incorporated under the 1931 legislation.
(4) The 2006 legislation applies in respect of an ICC incorporated under the
2006 legislation as it applies in respect of any other company
incorporated under the 2006 legislation.
(5) This section is subject to this Act.
Section 5 Incorporated Cell Companies Act 2010


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5 Name of ICC

(1) The name of an ICC must include the expression “Incorporated Cell
Company” or “ICC”.
(2) A company that does not comply with this section is not an ICC.
(3) This section does not limit —
(a) in the case of a company incorporated under the 1931 legislation,
section 2(1)(a) of the 1931 Act (use of the word “Limited”) and
sections 29 and 30 of the 1992 Act (names of public companies);
and
(b) in the case of a company incorporated under the 2006 legislation,
section 11 of the 2006 Act (required part of company name).
6 Memorandum of ICC

(1) The memorandum of association of an ICC must state that it is an ICC.
(2) In order to comply with subsection (1), an ICC may alter its
memorandum by —
(a) special resolution, in the case of a company incorporated under
the 1931 legislation; or
(b) members’ resolution, in the case of a company incorporated under
the 2006 legislation.
(3) A company that does not comply with subsection (1) is not an ICC.
7 Incorporation of ICC

(1) To incorporate a company as an ICC there must be delivered to the
Department —
(a) a statement in the published form signed by or on behalf of the
subscribers of the memorandum;
(b) all other documents, consents and information as are required for
the registration of the memorandum of a company under the 1931
legislation or the 2006 legislation (as the context requires); and
(c) the published fee.10

(2) A company cannot be incorporated as an ICC unless —
(a) it is authorised to carry on or will, when incorporated, be
authorised to carry on, insurance business within the meaning of
the Insurance Act 2008; or
(b) it is (or will be) of such class or description, or carries on (or will
carry on) such business or class of business as is prescribed.
(3) Subsection (2) is subject to section 4(2).
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8 Nature of ICC

An ICC is a legal person.
PART 3 – FORMATION AND NATURE OF IC

9 Formation of IC

(1) Subject to subsections (2) and (3), a company may be incorporated as an
incorporated cell (an “IC”) under the 1931 legislation or the 2006
legislation.
(2) Where an ICC is incorporated under the 1931 legislation, an IC of that
ICC may only be incorporated under the 1931 legislation.
(3) Where an ICC is incorporated under the 2006 legislation, an IC of that
ICC may only be incorporated under the 2006 legislation.
(4) A company may be incorporated as an IC only if it is a company limited
by shares.
(5) The 1931 legislation applies in respect of an IC incorporated under the
1931 legislation in accordance with Schedule 1.
(6) The 2006 legislation applies in respect of an IC incorporated under the
2006 legislation in accordance with Schedule 2.
(7) The Treasury may by order amend Schedules 1 and 2 so as to modify the
application of the 1931 legislation and the 2006 legislation to ICs.
(8) This section is subject to this Act.
(9) An IC may not be incorporated unless a cell resolution which complies
with the requirements of this section has been passed by an ICC
resolving to incorporate one or more ICs of that ICC.
(10) The cell resolution must —
(a) state the name of the IC; and
(b) specify the terms of its memorandum and articles.
10 Name of IC

(1) The name of an IC must include the expression “Incorporated Cell”
or “IC”.
(2) A company that does not comply with this section is not an IC.
(3) This section does not limit —
(a) in the case of a company incorporated under the 1931 legislation,
section 2(1)(a) of the 1931 Act (use of the word “Limited”) and
sections 29 and 30 of the 1992 Act (names of public
companies); and
Section 11 Incorporated Cell Companies Act 2010


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(b) in the case of a company incorporated under the 2006 legislation,
section 11 of the 2006 Act (required part of company name).
11 Memorandum of IC

(1) The memorandum of association of an IC must state that it is an IC.
(2) In order to comply with subsection (1), an IC may alter its
memorandum by —
(a) special resolution, in the case of a company incorporated under
the 1931 legislation; or
(b) members’ resolution, in the case of a company incorporated under
the 2006 legislation.
(3) A company that does not comply with subsection (1) is not an IC.
12 Incorporation of IC

To incorporate a company as an IC there must be delivered to the
Department —
(a) a statement in the published form signed by or on behalf of the
subscribers of the memorandum;
(b) all other documents, consents and information as are required for
the registration of the memorandum of a company under the 1931
legislation or the 2006 legislation (as the context requires); and
(c) the published fee.11

13 Nature of IC

(1) An IC is a legal person.
(2) Despite the provisions of any other enactment, an IC is not a subsidiary
of its ICC by virtue only of the fact that it is an incorporated cell of its
incorporated cell company.
(3) An IC may not itself be an ICC or a protected cell company (“PCC”).
(4) An IC must have the same registered office as its ICC.
(5) The directors of an ICC must also be directors of each of its ICs.
(6) Subject to its memorandum and articles, an IC may appoint additional
directors to those required by subsection (5).
(7) But the number of directors appointed as required by subsection (5) must
at all times exceed the number of directors appointed under subsection
(6).
(8) The memorandum and articles of an IC are to be taken to include a
provision that the IC may not own shares in its ICC.
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(9) Unless the contrary intention appears, the articles of an IC incorporated
under the 1931 legislation are to be taken to include a provision that the
IC may own shares in any other incorporated cell of its ICC.
(10) Unless the contrary intention appears, the memorandum and articles of
an IC incorporated under the 2006 legislation are to be taken to include a
provision that the IC may own shares in any other incorporated cell of its
ICC.
PART 4 – SEPARATE NATURE OF ICC AND ITS ICS

14 Separation of assets and liabilities

(1) The directors of an ICC and its ICs must —
(a) keep the assets and liabilities of the ICC separate and separately
identifiable from the assets and liabilities of its ICs; and
(b) keep the assets and liabilities of each IC separate and separately
identifiable from the assets and liabilities of the other ICs of the
ICC.
(2) The duty imposed by subsection (1) is not breached by reason only that
the directors cause or permit assets of the ICC or any of its ICs to be
collectively invested, or collectively managed by an investment manager,
provided that the assets in question remain separately identifiable in
accordance with subsection (1).
15 Transactions

(1) An ICC does not have power, by virtue only of its position as an
incorporated cell company, to enter into transactions on behalf of any of
its ICs.
(2) An IC does not have power, by virtue of its position as an incorporated
cell, to enter into transactions on behalf of —
(a) its ICC; or
(b) another IC of its ICC.
(3) The directors of an ICC and its ICs must ensure that, in respect of every
transaction that the ICC or IC enters into, it is stated whether the
transaction is being entered into by the ICC or by an IC and, if it is by an
IC, which IC.
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PART 5 – WINDING UP

16 Winding up of ICC not to prejudice its ICs

(1) The winding up of an ICC must be carried out in such a way as not to
prejudice the affairs, business and property of any of its ICs.
(2) Accordingly, during the winding up, the ICC may continue to carry on
business to the extent necessary for the continuance of business of its ICs.
17 Directors of IC during winding up of its ICC

(1) In the course of a winding up, the appointment of a liquidator in respect
of an ICC does not affect the position of the directors of its ICs, subject to
any contrary direction by —
(a) the liquidator;
(b) the IC in general meeting; or
(c) the Court.
(2) The Department may make an application to the Court for the Court to
give a direction under subsection (1).12

18 No dissolution of ICC until position of its ICs resolved

An ICC that is being wound up must not be dissolved unless each of its ICs
is either —
(a) converted into a company independent of its ICC under section
23;
(b) transferred to another ICC under section 24;
(c) expelled from its ICC under section 26;
(d) continued as a body corporate under the law of another
jurisdiction; or
(e) wound up,
and the Court may stay the dissolution on such terms as it thinks fit.
19 Alternative dissolution procedure

(1) An ICC may not apply for a declaration of dissolution unless each of
its ICs —
(a) is —
(i) converted into a company independent of its ICC under
section 23;
(ii) transferred to another ICC under section 24;
(iii) expelled from its ICC under section 26;
Incorporated Cell Companies Act 2010 Section 20


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(iv) continued as a body corporate under the law of another
jurisdiction; or
(v) wound up; or
(b) makes an application for a declaration of dissolution at the same
time as the ICC.
(2) In subsection (1), “declaration of dissolution” means a declaration of
dissolution under —
(a) section 273A(1) of the 1931 Act, in the case of a company
incorporated under the 1931 legislation; or
(b) section 190(1) of the 2006 Act, in the case of a company
incorporated under the 2006 legislation.
PART 6 – MODIFICATIONS

20 Amendment of constitution of ICs

The articles of an IC may be amended —
(a) in the manner set out in its memorandum or articles of
association; or
(b) in the absence of a provision in the memorandum or articles,
by —
(i) special resolution of both the IC and of its ICC, in the case
of a company incorporated under the 1931 legislation; or
(ii) members’ resolution of both the IC and of its ICC, in the
case of a company incorporated under the 2006 legislation.
21 Conversion of company into ICC

(1) A company that is not an ICC may be converted into an ICC in
accordance with this section.
(2) A company which is incorporated under the 1931 legislation may only be
converted into an ICC incorporated under the 1931 legislation.
(3) A company which is incorporated under the 2006 legislation may only be
converted into an ICC incorporated under the 2006 legislation.
(4) A company must not be converted into an ICC unless —
(a) it is authorised to carry on or will, when converted, be authorised
to carry on, insurance business within the meaning of the
Insurance Act 2008; or
(b) it is (or will be) of such class or description, or carries on (or will
carry on) such business or class of business as is prescribed.
Section 22 Incorporated Cell Companies Act 2010


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(5) A company must not be converted into an ICC unless the conversion is
authorised by —
(a) its articles of association, in the case of a company incorporated
under the 1931 legislation; or
(b) its memorandum or articles of association, in the case of a
company incorporated under the 2006 legislation.
(6) The company must —
(a) pass —
(i) a special resolution, in the case of a company incorporated
under the 1931 legislation; or
(ii) a members’ resolution, in the case of a company
incorporated under the 2006 legislation,
to authorise the conversion and to alter its memorandum and
articles to state that it is an ICC; and
(b) change its name, to comply with section 5, in accordance with —
(i) section 19(1) of the 1931 Act, in the case of a company
incorporated under the 1931 legislation; or
(ii) section 14 of the 2006 Act, in the case of a company
incorporated under the 2006 legislation.
(7) Each director must sign a declaration that the director believes, on
reasonable grounds, that the requirements of this section have been
fulfilled.
(8) The company must deliver to the Department —
(a) a statement of conversion in the published form signed by a
director of the company;
(b) a copy of the special resolution or members’ resolution referred to
in subsection (6)(a);
(c) a copy of its amended memorandum and articles;
(d) a copy of the special resolution or members’ resolution
authorising its change of name;
(e) the declaration referred to in subsection (7); and
(f) the published fee.13

(9) Upon receipt of the documents and fee specified in subsection (8) the
Department must issue a certificate of conversion into ICC, and the
certificate must state the date upon which the conversion has effect.14

22 Conversion of PCC into ICC

(1) A PCC may be converted into an ICC in accordance with this section.
Incorporated Cell Companies Act 2010 Section 22


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(2) A PCC which is incorporated under the 1931 legislation may only be
converted into an ICC incorporated under the 1931 legislation.
(3) A PCC which is incorporated under the 2006 legislation may only be
converted into an ICC incorporated under the 2006 legislation.
(4) A PCC must not be converted into an ICC unless —
(a) it is authorised to carry on or will, when converted, be authorised
to carry on, insurance business within the meaning of the
Insurance Act 2008; or
(b) it is (or will be) of such class or description, or carries on (or will
carry on) such business or class of business as is prescribed.
(5) A PCC must not be converted into an ICC unless the conversion is
authorised by —
(a) its articles of association, in the case of a company incorporated
under the 1931 legislation; or
(b) its memorandum or articles of association, in the case of a
company incorporated under the 2006 legislation.
(6) The PCC must —
(a) pass —
(i) a special resolution in the case of a PCC incorporated
under the 1931 legislation; or
(ii) a members’ resolution, in the case of a PCC incorporated
under the 2006 legislation,
to authorise the conversion and to alter its memorandum and
articles to state that it is an ICC; and
(b) change its name, to comply with section 5, in accordance with —
(i) section 19(1) of the 1931 Act, in the case of a PCC
incorporated under the 1931 legislation; or
(ii) section 14 of the 2006 Act, in the case of a PCC
incorporated under the 2006 legislation.
(7) The holders of cell shares of each cell of the PCC must pass —
(a) a special resolution in the case of a PCC incorporated under the
1931 legislation; or
(b) a members’ resolution, in the case of a PCC incorporated under
the 2006 legislation,
authorising the conversion of the cell into an IC of the ICC and
specifying its new name (which must comply with the requirements of
section 10).
(8) The special resolution or members’ resolution referred to in subsection
(6) is to be treated as a cell resolution for the purposes of section 9(9) and
accordingly section 9(10) applies in relation to it.
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(9) Each director must sign a declaration that the director believes, on
reasonable grounds, that —
(a) the PCC is able to discharge its liabilities as they fall due;
(b) there are no creditors of the PCC whose interests will be unfairly
prejudiced by the conversion; and
(c) the requirements of this section have been fulfilled.
(10) The PCC must deliver to the Department —
(a) a statement of conversion in the published form signed by a
director of the PCC;
(b) a copy of the special resolutions or members’ resolutions referred
to in subsection (6)(a) and (7);
(c) a copy of its amended memorandum and articles;
(d) a copy of the special resolution or members’ resolution
authorising its change of name;
(e) the declaration referred to in subsection (9); and
(f) the published fee.15

(11) Upon receipt of the documents and fee specified in subsection (10) the
Department must —
(a) in respect of the PCC, issue a certificate of conversion from PCC
into ICC, and the certificate must state the date upon which the
conversion has effect; and
(b) in respect of each cell of the PCC, issue a certificate of
incorporation (which is conclusive evidence of due
incorporation).16

(12) Where a PCC is converted into an ICC under this section —
(a) all property and rights of the PCC which were non-cellular assets
of the PCC within the meaning of the 2004 Act or Part VII of the
2006 Act (as the context requires) immediately before its
conversion remain the property and rights of the ICC;
(b) the ICC remains subject to all criminal and civil liabilities to which
the PCC was subject immediately before its conversion;
(c) the ICC remains liable for all contracts, debts and other
obligations, which would have fallen to be discharged from the
PCC’s non-cellular assets immediately before the conversion;
(d) all actions and other legal proceedings which, immediately before
the conversion, were pending by or against the core of the PCC
may be continued by or against the ICC;
(e) all property and rights attributable to a cell of the PCC
immediately before its conversion become the property and rights
of the IC which it has become;
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(f) an IC becomes subject to all criminal and civil liabilities, and all
contracts, debts and other obligations, which immediately before
the conversion were attributable to the cell of the PCC which it
used to be;
(g) all actions and other legal proceedings which, immediately before
the conversion, were pending by or against the PCC in respect of
a cell of the PCC may be continued by or against the IC which that
cell has become.
(13) A creditor or member of the PCC (including a creditor or member in
respect of any of its cells) may apply to the Court, within 30 days
following the date upon which the conversion has effect, for an order to
set aside the conversion on the grounds that it is, or its terms are,
oppressive or unfairly prejudicial to that person’s interests.
(14) The Court on hearing an application under subsection (13) may make an
order on such terms as it thinks fit.
23 Conversion of IC into company

(1) An IC may be converted into a company independent of its ICC in
accordance with this section.
(2) An IC which is incorporated under the 1931 legislation may only be
converted into a company incorporated under the 1931 legislation.
(3) An IC which is incorporated under the 2006 legislation may only be
converted into a company incorporated under the 2006 legislation.
(4) The IC must —
(a) pass —
(i) a special resolution in the case of an IC incorporated under
the 1931 legislation; or
(ii) a members’ resolution, in the case of an IC incorporated
under the 2006 legislation,
to authorise the conversion and to alter its memorandum and
articles so that they no longer state that it is an IC; and
(b) change its name, to remove the expression required by section 10,
in accordance with —
(i) section 19(1) of the 1931 Act, in the case of an IC
incorporated under the 1931 legislation; or
(ii) section 14 of the 2006 Act, in the case of an IC incorporated
under the 2006 legislation.
(5) Each director must sign a declaration that the director believes, on
reasonable grounds, that the requirements of this section have been
fulfilled.
(6) The IC must deliver to the Department —
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(a) a statement of conversion in the published form signed by a
director of the IC;
(b) a copy of the special resolution or members’ resolution referred to
in subsection (4)(a);
(c) a copy of the special resolution or members’ resolution
authorising its change of name;
(d) a copy of its amended memorandum and articles;
(e) the declaration referred to in subsection (5), and
(f) the published fee.17

(7) Upon receipt of the documents and fee specified in subsection (6), the
Department must issue a certificate of conversion of IC into company,
and the certificate must state the date upon which the conversion has
effect.18

(8) Where an IC is converted into a company under this section —
(a) all property and rights to which it was entitled immediately
before its conversion remain its property and rights;
(b) it remains subject to all criminal and civil liabilities, and all
contracts, debts and other obligations to which it was subject
immediately before its conversion; and
(c) all actions and other legal proceedings which, immediately before
its conversion, were pending by or against it may be continued by
or against it.
(9) A member of the IC may apply to the Court, within 30 days following
the date upon which the certificate comes into effect, for an order to set
aside the conversion on the grounds that it is, or its terms are, oppressive
or unfairly prejudicial to the member’s interests.
(10) The Court on hearing an application under subsection (9) may make an
order on such terms as it thinks fit.
24 Transfer of ICs between ICCs

(1) An IC of an ICC may be transferred to another ICC in accordance with
this section.
(2) An IC which is incorporated under the 1931 legislation may only be
transferred to another ICC incorporated under the 1931 legislation.
(3) An IC which is incorporated under the 2006 legislation may only be
transferred to another ICC incorporated under the 2006 legislation.
(4) The ICCs must enter into a written agreement that sets out the terms of
the transfer (the “transfer agreement”).
(5) A transfer of an IC is approved when —
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(a) the directors of each ICC have approved the transfer agreement;
and
(b) the transfer agreement is approved by —
(i) a special resolution, in the case of an ICC or IC
incorporated under the 1931 legislation; or
(ii) a members’ resolution, in the case of an ICC or IC
incorporated under the 2006 legislation,
of the ICC to which the IC is being transferred and the IC which is
being transferred.
(6) Within one month of the transfer agreement being approved, the ICC to
which the IC is being transferred must deliver to the Department —
(a) a copy of the special resolution or members’ resolution of the ICC
approving the transfer agreement;
(b) a copy of the special resolution or members’ resolution of the IC
being transferred approving the transfer agreement;
(c) a copy of the transfer agreement;
(d) a copy of any amended memorandum and articles of the IC being
transferred;
(e) a declaration made in accordance with subsection (7), signed by
each director of the ICC transferring the IC; and
(f) the published fee.19

(7) The declaration referred to in subsection (6)(e) must state that each
director believes on reasonable grounds that —
(a) the IC being transferred is able to discharge its liabilities as they
fall due;
(b) the transfer agreement has been approved in accordance with this
section; and
(c) the requirements of this section have been fulfilled.
(8) Upon receipt of the documents and fee specified in subsection (6) the
Department must issue to the IC a certificate of transfer of IC, and the
certificate must state the date upon which the transfer has effect.20

(9) Where an IC is transferred under this section —
(a) it ceases to be an IC of the ICC which transferred it;
(b) it becomes an IC of the ICC to which it has been transferred;
(c) its memorandum and articles are those provided for in the
transfer agreement;
(d) all property and rights to which it was entitled immediately
before its transfer remain its property and rights;
Section 25 Incorporated Cell Companies Act 2010


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(e) it remains subject to all civil and criminal liabilities and all
contracts, debts and other obligations to which it was subject
immediately before its transfer; and
(f) all actions and other legal proceedings which, immediately before
its transfer were pending by or against it may be continued by or
against the it.
25 Conversion of company into IC and transfer to ICC

(1) A company that is neither an ICC nor a PCC (the “non-cellular
company”) may become an IC of an ICC in accordance with this section.
(2) A company which is incorporated under the 1931 legislation may only
become an IC of an ICC incorporated under the 1931 legislation.
(3) A company which is incorporated under the 2006 legislation may only
become an IC of an ICC incorporated under the 2006 legislation.
(4) The non-cellular company and the ICC must enter into a written
agreement that sets out the terms of the transfer (“the transfer
agreement”).
(5) The non-cellular company must change its name, to comply with
section 5, in accordance with —
(a) section 19(1) of the 1931 Act, in the case of a company
incorporated under the 1931 legislation; or
(b) section 14 of the 2006 Act, in the case of a company incorporated
under the 2006 legislation.
(6) A transfer of a non-cellular company is approved when —
(a) the directors of the non-cellular company and the ICC have
approved the transfer agreement; and
(b) the transfer agreement is approved by the non-cellular company
and the ICC by way of —
(i) special resolution, in the case of a company incorporated
under the 1931 legislation; or
(ii) members’ resolution, in the case of a company
incorporated under the 2006 legislation.
(7) Within one month of the transfer agreement being approved, the ICC
must deliver to the Department —
(a) a copy of the special resolution or members’ resolution of the non-
cellular company approving the transfer agreement;
(b) a copy of the special resolution or members’ resolution of the ICC
approving the transfer agreement;
(c) a copy of the transfer agreement;
Incorporated Cell Companies Act 2010 Section 26


c AT 13 of 2010 Page 21

(d) a copy of the amended memorandum and articles of the non-
cellular company;
(e) a declaration made in accordance with subsection (9), signed by
each director of the non-cellular company and the ICC; and
(f) the published fee.21

(8) The special resolution or members’ resolution referred to in subsection
(7)(a) is to be treated as a cell resolution for the purposes of section 9(9)
and accordingly section 9(10) applies in relation to it.
(9) The declaration referred to in subsection (7)(e) must state that each
director believes on reasonable grounds that —
(a) the non-cellular company is able to discharge its liabilities as they
fall due;
(b) the transfer agreement has been approved in accordance with this
section; and
(c) the requirements of this section have been fulfilled.
(10) Upon receipt of the documents and fee specified in subsection (7), the
Department must issue to the non-cellular company a certificate of
conversion into IC, and the certificate must state the date upon which the
conversion has effect.22

(11) Where a non-cellular company becomes an IC of an ICC under this
section —
(a) its memorandum and articles are those provided for in the
transfer agreement;
(b) all property and rights to which it was entitled immediately
before its conversion remain its property and rights;
(c) all civil and criminal liabilities and all contracts, debts and other
obligations to which it was subject immediately before its
conversion remain its liabilities, contracts, debts and other
obligations; and
(d) all actions and other legal proceedings which, immediately before
its conversion, were pending by or against it may be continued by
or against it.
26 Expulsion of IC from ICC

(1) An application to the Court to expel an IC from its ICC, on a ground set
out in subsection (2), may be made by —
(a) the Department;23

(b) the ICC; or
(c) the liquidator of the ICC.
(2) The grounds referred to in subsection (1) are —
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(a) that the affairs of the IC are being or have been conducted in a
manner which is oppressive or unfairly prejudicial to its ICC or
any IC of that ICC, or to the members of that ICC or its ICs;
(b) that the IC is being or has been used for fraudulent purposes; or
(c) that it would be just and equitable to do so.
(3) Upon an application under this section, the Court may make such order
as it thinks fit and upon such terms and conditions as it thinks fit,
including an order requiring the IC to convert into a company
independent of its ICC.
27 Documents provided to Department

(1) The Department, when performing functions under this Part, may rely
upon the documents provided to it under this Part in all respects.24

(2) Accordingly, the Department is not bound to enquire further as to
whether this Act has been complied with.25

28 Conversions, transfers or expulsions not a default

The operation of sections 21 to 26 is not to be regarded —
(a) as a breach of contract or confidence or otherwise as a civil wrong;
(b) as a breach of any contractual provision prohibiting, restricting or
regulating the assignment or transfer of rights or liabilities; or
(c) as —
(i) giving rise to any remedy in favour of a party to a contract
or other instrument;
(ii) an event of default under any contract or other instrument;
or
(iii) causing or permitting the termination of any contract or
other instrument, or of any obligation or relationship.
PART 7 – GENERAL PROVISIONS

29 Application for directions

A director of an ICC or IC may apply to the Court for directions as to how the
director should or might act in any of the affairs of the ICC or IC, and upon such
an application the Court may make such order as it thinks fit.
30 False and misleading statements

(1) A person commits an offence if that person —
Incorporated Cell Companies Act 2010 Section 31


c AT 13 of 2010 Page 23

(a) furnishes or sends to the Department for any purpose under this
Act a document which the person knows to be false or misleading
in a material particular; or26

(b) recklessly furnishes or sends to the Department for the purposes
of this Act a document which is false or misleading in a material
particular; or27

(c) in furnishing information to the Department for the purposes of
this Act —28

(i) makes a statement which the person knows to be false or
misleading in a material particular; or
(ii) recklessly makes a statement which is false or misleading
in a material particular.
(2) A person guilty of an offence under subsection (1) is liable —
(a) on conviction on information, to a fine or to custody for a term not
exceeding 2 years, or to both;
(b) on summary conviction, to a fine not exceeding £5,000 or to
custody for a term not exceeding 6 months, or to both.
31 Offences by bodies corporate

(1) Subsection (2) applies where an offence under this Act is committed by a
body corporate and it is proved that an officer of the body authorised,
permitted, participated in, or failed to take all reasonable steps to prevent
the commission of, the offence.
(2) The officer, as well as the body, commits the offence and is liable to the
penalty provided for the offence.
(3) In this section “officer” includes —
(a) a director, secretary or other similar officer;
(b) a person purporting to act as a director, secretary or other similar
officer;
(c) if the affairs of the body are managed by its members, a member;
and
(d) if the body has a registered agent, the registered agent.
32 Subordinate legislation

(1) The Treasury may make orders and regulations concerning ICCs
and ICs —
(a) in accordance with this Act; or
(b) as are necessary to give effect to this Act.
(2) Without limiting subsection (1), orders and regulations under subsection
(1) may make provision in respect of any of the following matters —
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(a) restricting the business that ICCs and ICs may carry out;
(b) the conduct of the business of ICCs and ICs;
(c) the manner in which ICCs and ICs may carry on, or hold
themselves out as carrying on, business;
(d) the form and content of the accounts or financial statements of
ICCs and ICs;
(e) the taxation of ICCs and ICs;
(f) the winding up of ICCs and ICs;
(g) the transfer of domicile of companies which are, or are equivalent
to, ICCs or ICs.
(3) Orders and regulations under subsection (1) may modify provisions of
the 1931 legislation and the 2006 legislation in their application to ICCs
and ICs.
(4) Orders and regulations under subsection (1) may —
(a) provide for their contravention to be an offence and prescribe a
penalty for the offence;
(b) exempt a person from any of the provisions of this Act;
(c) permit a person to exercise a discretion in respect of any
prescribed matter;
(d) permit a person to publish fees that may be imposed under the
order or regulations;
(e) permit a person to publish forms and other material in respect of
any prescribed matter;
(f) contain such consequential, incidental, supplemental and
transitional provisions as the Treasury considers necessary or
expedient.
(5) Before making an order or regulations under this Act, the Treasury must
consult —
(a) the Department;29

(b) the Insurance and Pensions Authority; and
(c) such persons or bodies as appear to be representative of interests
likely to be affected.
33 Tynwald procedure

Orders (other than Court orders and orders under section 2(1)) and regulations
made under this Act must be laid before Tynwald as soon as practicable after
they are made and if Tynwald, at the sitting at which they are laid or at the next
following sitting, fails to approve them they cease to have effect.
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c AT 13 of 2010 Page 25

34 Fees and forms

The Department may —
(a) set the level of any fees payable under this Act;
(b) specify the form of any statement, document or form required
under this Act;
(c) publish such fees and forms.30

35 Financial provisions

(1) Expenses incurred under this Act by the Treasury or the Department are
to be defrayed out of money provided by Tynwald.31

(2) Fees received under this Act form part of the general revenue of the
Island.
36 Amendment of the Financial Services Act 2008

(1) The Financial Services Act 2008 is amended as follows.
(2) [Amends section 33(4) of the Financial Services Act 2008 by adding
paragraph (i) to the definition of “specified enactment”.]
(3) [Amends paragraph 2(2) of Schedule 1 to the Financial Services Act 2008
by adding paragraph (zb).]
Incorporated Cell Companies Act 2010 Schedule 1



c AT 13 of 2010 Page 27

Schedule 1

APPLICATION OF THE 1931 LEGISLATION TO ICS

Section 9(5)
General application
1. Subject to this Act and any other enactment, the 1931 legislation applies to an IC
incorporated under the 1931 legislation as if a reference in the 1931 legislation —
(a) to a company is a reference to an IC;
(b) to the directors of a company is a reference to the directors of the
IC;
(c) to the memorandum or articles of a company is a reference to the
memorandum or articles of the IC;
(d) to the members of a company is a reference to the members of the
IC;
(e) to shares in a company is a reference to shares in the IC;
(f) to the assets and liabilities of a company is a reference to the
assets and liabilities of the IC; and
(g) to the share capital of a company is a reference to the share capital
of the IC.
Accounting records
2. (1) Section 1 of the 1982 Act does not apply to an IC.
(2) However, an ICC must keep accounting records, in respect of each of its
ICs, that comply with the requirements of that section.
(3) The accounting records kept by an ICC in respect of itself under that
section may include matters included by it in any accounting records kept by the
company in respect of its ICs under sub-paragraph (2).
(4) An ICC which fails to comply with this paragraph commits an offence
and is liable on summary conviction to a fine not exceeding £5,000.
Profit and loss account and balance sheet
3. (1) The requirements of section 2 of the 1982 Act do not apply to an IC in
respect of the preparation of a profit and loss account (or income and expenditure
account) and balance sheet (“the annual accounts”).
(2) However, an ICC must prepare separate annual accounts in respect of
each of its ICs that comply with the requirements of section 2 and those accounts are to
be treated as the annual accounts of the IC for the purposes of the 1931 legislation.
(3) The requirement in sub-paragraph (2) is satisfied if an IC, with the
agreement of the directors of its ICC, elects —
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Incorporated Cell Companies Act 2010


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(a) in its articles; or
(b) by way of a special resolution,
that the preparation of its annual accounts may be combined with the
preparation of the annual accounts of its ICC or another IC of its ICC
which also so elects, and that preparation is so combined.
(4) Where no election is made under sub-paragraph (3), the annual accounts
of an ICC prepared by it under section 2 of the 1982 Act need not include matters
already included by it in the annual accounts of an IC prepared by it in accordance
with sub-paragraph (2).
(5) Subject to contrary provision in the articles of an IC or its ICC —
(a) a member of the ICC who is not a member of the IC is only
entitled to be provided with the annual accounts of the ICC that
relate to the ICC which are prepared under section 2 of the 1982
Act;
(b) a member of an IC is only entitled to be provided with so much of
the annual accounts as is mentioned in sub-paragraph (2) as relate
to the IC of which that person is a member.
(6) An ICC which fails to comply with this paragraph commits an offence
and is liable on summary conviction to a fine not exceeding £5,000.
Annual general meetings
4. An IC is not required to hold an annual general meeting under section 111 of
the 1931 Act unless it is so required by —
(a) its articles;
(b) a special resolution; or
(c) on the application of any member of the company, the Court.
Report and accounts where no annual general meeting held
5. (1) If, in accordance with paragraph 4, an IC does not hold an annual
general meeting, its directors must —
(a) firstly, within a period of 18 months beginning on the date on
which the IC is entitled to commence business; and
(b) thereafter, at least once in every calendar year,
send every member of the IC a copy of the annual accounts of the IC
referred to in paragraph 3(2) with a copy of the directors’ report referred
to in section 10 of the 1982 Act attached to the balance sheet.
(2) No more than 15 months may elapse between the sending of successive
reports and accounts under subsection (1).
(3) If default is made in sending reports or accounts in accordance with
subsection (1) or (2), the IC commits an offence and is liable on summary conviction to
a fine not exceeding £5,000.
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c AT 13 of 2010 Page 29

Auditors where no annual general meeting held
6. If paragraph 4 does not require an IC to hold an annual general meeting, then,
subject to paragraph 7 —
(a) the duty of the members at each annual general meeting to
appoint auditors under section 12 of the 1982 Act must be carried
out by the directors of the IC —
(i) firstly, within a period of 18 months beginning on the date
on which the IC is entitled to commence business; and
(ii) thereafter, at least once in every calendar year,
and no more than 15 months may elapse between
successive appointments of auditors;
(b) the directors of the IC must fix the remuneration of those auditors;
(c) the auditors’ report referred to in section 15(1) of the 1982 Act
must be made by reference to the annual accounts referred to in
paragraph 3(2);
(d) subject to paragraph 8, the auditors’ report is not to be read before
the company in general meeting in accordance with section 15(2)
of the 1982 Act but the directors must annex a copy of it to the
balance sheet sent out to members in accordance with paragraph
5.
ICC responsibility for audit of its ICs
7. (1) The requirements of section 12 of the 1982 Act in respect of the
appointment and remuneration of auditors apply to an IC of an ICC unless, with the
agreement of the directors of the ICC, that IC has elected —
(a) in its articles; or
(b) by way of a special resolution,
that those requirements do not apply.
(2) Where an IC has made an election under sub-paragraph (1), those
requirements apply to the directors of the ICC in respect of that IC.
Combining audit of ICs with their ICC
8. (1) The requirement in section 15 of the 1982 Act for auditors to prepare a
report is satisfied if an IC, with the agreement of the directors of its ICC, elects —
(a) in its articles; or
(b) by way of a special resolution,
that its audit may be combined with the audit of its ICC, or
another IC of its ICC which also so elects, and those audits are so
combined.
(2) Subject to contrary provision in the articles of an IC or its ICC —
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Incorporated Cell Companies Act 2010


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(a) a member of the ICC who is not a member of the IC is only
entitled to be provided with so much of the auditors’ report of the
ICC as relates to the ICC;
(b) a member of an IC is only entitled to be provided with so much of
the auditors’ report of the ICC as relates to that IC of which that
person is a member.
Remedy in cases of oppression
9. A member of an IC may apply to the Court under section 7 of the 1968 Act in
respect of the ICC of the IC, and section 7 applies to the application as if the applicant
were a member of the ICC.
Striking off ICs when their ICC is struck off
10. (1) Where section 273(1) of the 1931 Act applies to an ICC, the other
provisions of that section also apply to its ICs, and accordingly the ICs are to be struck
off the register if their ICC is struck off the register.
(2) An IC may only be restored to the register under section 273(6) or 273B of
the 1931 Act if its ICC has been so restored, and an application for restoration of an ICC
under either section may also include an application for restoration of one or more of
its ICs.

Incorporated Cell Companies Act 2010 Schedule 2



c AT 13 of 2010 Page 31

Schedule 2

APPLICATION OF THE 2006 LEGISLATION TO ICS

Section 9(6)
General application
1. Subject to this Act and any other enactment, the 2006 legislation applies to an IC
incorporated under the 2006 legislation as if a reference in the 2006 legislation —
(a) to a company is a reference to an IC;
(b) to the directors of a company is a reference to the directors of the
IC;
(c) to the memorandum or articles of a company is a reference to the
memorandum or articles of the IC;
(d) to the members of a company is a reference to the members of the
IC;
(e) to shares in a company is a reference to shares in the IC;
(f) to the assets and liabilities of a company is a reference to the
assets and liabilities of the IC; and
(g) to the share capital of a company is a reference to the share capital
of the IC.
Accounting records
2. (1) Section 80 of the 2006 Act does not apply to an IC.
(2) However, an ICC must keep accounting records, in respect of each of its
ICs, that comply with the requirements of that section.
(3) The accounting records kept by an ICC in respect of itself under that
section may include matters included by it in any accounting records kept by the
company in respect of its ICs under sub-paragraph (2).
(4) An ICC which fails to comply with this paragraph commits an offence
and is liable on summary conviction to a fine not exceeding £5,000.
Prejudiced members
3. A member of an IC may apply to the Court under section 180 of the 2006 Act in
respect of the ICC of the IC, and section 180 applies to the application as if the
applicant were a member of the ICC.
Striking off ICs when their ICC is struck off
4. (1) Where section 183(1) of the 2006 Act applies to an ICC, the other
provisions of that section also apply to its ICs, and accordingly the ICs are to be struck
off the register if their ICC is struck off the register.
Schedule 2
Incorporated Cell Companies Act 2010


Page 32 AT 13 of 2010 c

(2) An IC may only be restored to the register under section 187, 188, 191 or
192 of the 2006 Act if its ICC has been so restored, and an application for restoration of
an ICC under any of those sections may also include an application for restoration of
one or more of its ICs.
Incorporated Cell Companies Act 2010 Endnotes


c AT 13 of 2010 Page 33

ENDNOTES

Table of Legislation History

Legislation Year and No Commencement






Table of Renumbered Provisions

Original Current






Table of Endnote References

1
ADO: remainder of Act in operation 1 June 2011 [SD233/11]. 2
Definition of “certificate of conversion from PCC into ICC” amended by SD228/11. 3
Definition of “certificate of conversion into IC” amended by SD228/11. 4
Definition of “certificate of conversion into ICC” amended by SD228/11. 5
Definition of “certificate of conversion of IC into company” amended by SD228/11. 6
Definition of “certificate of transfer of IC” amended by SD228/11. 7
Definition of “Commission” repealed by SD228/11. 8
Definition of “Department” inserted by SD228/11. 9
Definition of “published” amended by SD228/11. 10
Subs (1) amended by SD228/11. 11
S 12 amended by SD228/11. 12
Subs (2) amended by SD228/11. 13
Subs (8) amended by SD228/11. 14
Subs (9) amended by SD228/11. 15
Subs (10) amended by SD228/11. 16
Subs (11) amended by SD228/11. 17
Subs (6) amended by SD228/11. 18
Subs (7) amended by SD228/11. 19
Subs (6) amended by SD228/11. 20
Subs (8) amended by SD228/11. 21
Subs (7) amended by SD228/11. 22
Subs (10) amended by SD228/11. 23
Para (a) amended by SD228/11.
Endnotes Incorporated Cell Companies Act 2010


Page 34 AT 13 of 2010 c

24
Subs (1) amended by SD228/11. 25
S 27 amended by SD228/11. Subs (2) amended by SD228/11. 26
Para (a) amended by SD228/11. 27
Para (b) amended by SD228/11. 28
Para (c) amended by SD228/11. 29
Para (a) amended by SD228/11. 30
S 34 amended by SD228/11. 31
Subs (1) amended by SD228/11.