S.L. 386.15 Art. 9Establishment of incorporated cells.

(1) A recognised incorporated cell company may establish an incorporated cell by virtue of a resolution of the board of directors (the "cell resolution") which:

(a) approves the name of the incorporated cell being established;

(b) approves the terms of the memorandum and articles of association of the incorporated cell and resolves that the said memorandum and articles of association are to be entered into by the recognised incorporated cell company; and

(c) authorises, if applicable, the subscription by the recognised incorporated cell company of a share or shares in the incorporated cell.

(2) An incorporated cell shall not be validly constituted unless a copy of the cell resolution is delivered to the Registrar, the memorandum and articles of association are entered into in accordance with the provisions of sub-regulation (3) and a certificate of registration is issued in terms of the Act.

(3) The memorandum and articles of association of an incorporated cell shall be entered into by:

(a) the recognised incorporated cell company, whether the recognised incorporated cell company is subscribing to a share or shares in the incorporated cell or not; and

(b) such persons, other than the recognised incorporated cell company, subscribing to shares in the incorporated cell.

(4) The memorandum of association of an incorporated cell shall state that it is an incorporated cell.

(5) The memorandum or articles of association of an incorporated cell shall provide that the incorporated cell may not own shares in its recognised incorporated cell company.

(6) Without prejudice to article 110 of the Act and unless expressly prohibited by any applicable rules or regulations or by its articles of association, an incorporated cell shall be permitted to own shares in any other incorporated cell of its recognised incorporated cell company subject to any conditions that may apply in terms of the licence issued to it by the competent authority.