On the 16th June 2020, the Government issued new regulations under the Companies Act entitled the Companies Act (Shipping and Aviation Cell Companies) Regulations. These regulations aim to create a new structure to be used by companies operating in the shipping and aviation business, by means of cell companies.
After the success of cell companies established under the Companies Act for cell companies in the field of insurance, securitisation vehicles and incorporated cell companies and incorporated cells to carry on any financial services business, it was felt that this can also be extended to the shipping and aviation industry.
Companies of this type will be distinguished from other companies by their name as the name needs to include the words ‘Mobile Assets Protected Cell Company’ or ‘MAPCC’. Companies with such structure may be formed or constituted as a cell company to carry on shipping or aviation business or else a company carrying on such business may be converted, if so authorised by its memorandum and articles of association, into a cell company.
The assets of a cell company shall be either cellular assets or non-cellular assets. The assets attributable to a cell of a cell company comprise assets represented by the proceeds of cell share capital and reserves attributable to the cell and all other assets attributable to the cell.
A cell company may, in respect of any of its cells, create and issue shares called ‘cell shares’, the proceeds of the issue of which, that is, the cell share capital, shall be comprised in the cellular assets attributable to the cell in respect of which the cell shares were issued.
These cell companies are obliged to inform third parties that they are dealing with a cell company and that there are two regulations which specifically deals with creditors and recourse of creditors to cellular assets.
Moreover, cell companies and their cells shall comply with the provisions of the Companies Act (Register of Beneficial Owners) Regulations, which shall be applicable to cell companies and their cells.
The regulations also cater for transfer of cellular assets from cell company, liquidation of cell companies and cells.