Article 45 - Incorporation of a Business

(1) This Article applies when—
(a) a QFC Entity that is not a Company (“QFC Entity A”) transfers to a QFC Entity that is either a Company or an LLP (“QFC Entity B”) a business as a going concern, together with the whole, or substantially the whole of the assets of the business other than cash;
(b) the business is transferred wholly in exchange for shares or interests, as applicable, (the “New Shares”) issued by QFC Entity B to QFC Entity A or a PersonConnected to QFC Entity A; and
(c) the condition outlined in Article 45(2) is fulfilled.
(2) The condition is that QFC Entity A or a PersonConnected to QFC Entity A will, in consequence of the exchange outlined in Article 45(1)(b):
(a) where QFC Entity B is a Company, hold 100% of the shares in QFC Entity B; or
(b) where QFC Entity B is an LLP, beneficially own 100% of the assets of, and income earning rights in, the LLP.
(3) The consideration for the transfer of assets shall be treated as being of such amount as would secure that neither a gain nor a loss would accrue to QFC Entity A.
(4) In the event that—
(a) where QFC Entity B is a Company, Ownership of more than 50% of the new shares changes; or
(b) where QFC Entity B is an LLP, Ownership of more than 50% of the assets of the LLP or Ownership of more than 50% of the income earning rights in the LLP changes,
in each case, within 12 months of the date of transfer of the business mentioned in Article 45(1), that transfer shall be treated as taking place at Market Value on the date the business was transferred to the Company or the LLP, as applicable.
(5) Tax losses not utilised at the date of transfer by QFC Entity A shall be available to QFC Entity B as though they were losses carried forward under Article 28 at the date of transfer.
(6) The consideration for the issuance of New Shares referred to in Article 45(1) shall be deemed to be for a consideration equal to the Market Value of the assets of the business transferred on the date of such transfer.
Amended (as from 18th June 2014)