Cap. 16 Art. 20BConstitution of a cell into a new organisation.

(1) It shall be lawful for a cell of an organisation to be constituted as a new organisation, with all the assets and liabilities of the cell becoming the patrimony of the new organisation or a part thereof.

(2)The name of the new organisation shall reflect the name or designation of the cell as closely as possible to comply with the applicable law in this regard. (3)Such action may be taken under such conditions as may be applicable by the administrators of the existing organisation by means of a resolution of the board of administrators only if the statute of the organisation provides for such power.

(4)The cell shall be constituted as a new organisation upon the observance by the administrators of the requirements applicable to the creation of a new organisation of the same legal form as the organisation in which the cell is currently established, including its registration with the Registrar, and if the cell is created with reference to members, the members shall sign the statute of the new organisation, and:

(a) the administrators in office shall be the administrators of the new organisation unless new administrators are appointed in the constitutive documents when a cell is being constituted as a new organisation;

(b) the purposes and beneficiaries, if any, of the new organisation shall be those of the cell;

(c) all rights and obligations of the organisation and any third parties shall cease to be those of the organisation with respect to the cell and shall continue unaffected as rights and obligations of the new organisation by operation of law with effect from the date of notification to the Registrar under sub-article (6) and the registration of the organisation in terms of sub-article (7) notwithstanding the absence of any agreements or consents that would otherwise be necessary for the transfer to be effective in law for those purposes; and

(d) the constitution of a cell as a new organisation as contemplated in this article shall constitute a change in fiduciary and shall be governed by the provisions of article 1124D of the Code regulating the succession of fiduciary obligations.

(5)The creditors of the cell being constituted as a new organisation shall be given the opportunity to object to such constitution following public notice of at least thirty (30) days of the intent to such constitution and this only if the new legal form which the cell is to take creates limitations on the liabilities of the organisation or its administrators or members which reduce the rights of the creditors when compared to those prevailing with reference to the cell.

(6)The administrators shall be bound to notify the Registrar by means of the prescribed form when a cell no longer forms part of an organisation under this article and shall surrender any certificate issued by the Registrar relating to the cell. (7)The Registrar shall register in the Register the notification of the removal of a cell from an organisation by the administrators and shall then, subject to sub-article (8), immediately proceed to register the new organisation in the Register. The same shall apply when the cell is being registered in another register pursuant to a special law.

(8)When the new organisation takes a legal form which is governed by a special law which provides for registration which differs from this article, the Registrar shall furthermore issue his confirmation that he has been notified of the constitution of the cell as a new organisation and only upon such confirmation shall the new organisation be registered in the relevant register. (9)Upon registration, the administrators of the new organisation shall notify in writing all interested parties of which they are aware regarding the constitution of the cell as a new organisation.