Companies Act 2014 section 1405

Segregated liability of investment company sub-funds

Section 1405 establishes the principle of segregated liability for sub-funds within an umbrella investment company, ensuring that the assets of one sub-fund are ring-fenced from the liabilities of another sub-fund.

• Liabilities attributable to a particular sub-fund of an umbrella fund must be discharged solely from the assets of that sub-fund
• No person — including the umbrella fund itself, its directors, receivers, examiners, or liquidators — may use the assets of one sub-fund to satisfy liabilities belonging to another sub-fund
• This segregated liability protection applies regardless of whether the liability arose before, on, or after 30 June 2005
• Umbrella funds authorised and trading before 30 June 2005 must satisfy additional conditions set out in Schedule 17 before this protection applies to them