Malaysia legislation
Section 130Y
Section 130Y
(a)
inform any person with whom it transacts that it is a Labuan protected cell company;
(b)
for the purposes of that transaction, identify or specify the cell in respect of which that person is transacting, unless that transaction is not a transaction in respect of a particular cell; and
(c)
where the transaction is in respect of a particular cell, inform the person that the cell assets of that cell, and only those assets, are available to pay the obligations and liabilities of that cell.
(2)
If, in contravention of subsection (1), a Labuan protected cell company—
(a)
fails to inform a person that he is transacting with a Labuan protected cell company, and that person is otherwise unaware that, and has no reasonable grounds to believe that, he is transacting with a Labuan protected cell company;
(b)
fails to identify or specify the cell in respect of which a person is transacting, and that person is otherwise unaware
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of, and has no reasonable basis of knowing, which cell he is transacting with; or
(c)
fails to inform a person that the cell assets of that cell, and only those assets, are available to pay the obligations and liabilities of that cell, then, in any such case, the directors shall incur personal liability to that person in respect of the transaction, and each director shall severally have a right of indemnity against the general assets of the
Labuan protected cell company unless he was fraudulent, reckless or negligent, or acted in bad faith.
(3)
Notwithstanding the foregoing subsections, the Court may relieve a director or officer, as the case may be, of all or part of his personal liability thereunder if he satisfies the Court that he ought fairly to be so relieved because —
(a)
he was not aware of the circumstances giving rise to his liability and, in being not so aware, he was neither fraudulent, reckless or negligent, nor acted in bad faith; or
(b)
he expressly objected, and exercised such rights as he had as such a director or officer, whether by way of voting power or otherwise, so as to try to prevent the circumstances giving rise to his liability.
(4)
Where the Court relieves a director or officer of all or part of his personal liability under subsection (3), the Court may order that the liability in question shall instead be met from—
(a)
the assets of the relevant cell in respect of which the person was dealing or transacting; or
(b)
the general assets of the Labuan protected cell company, as may be specified in the order.
164 Laws of Malaysia ACT 441
(5)
Any provision in the articles of a Labuan protected cell company or any other contractual provision under which the Labuan protected cell company may be liable which purports to —
(a)
avoid the incurring of personal liability upon a director or officer in the circumstances described in this section; or
(b)
indemnify directors or officers in respect of conduct which would otherwise disentitle them to an indemnity against non-cell assets by virtue of this section, shall be void.
Dealings and transactions between cell assets