Companies Act 2014 section 1407

Further matters respecting an umbrella fund to which section 1405(1) applies

Section 1407 deals with the legal status of sub-funds within an umbrella investment company that has segregated liability, covering their treatment in litigation, fraud situations, and winding up.

• A sub-fund is not a separate legal entity from the umbrella fund, but the umbrella fund can sue and be sued in respect of a particular sub-fund, and courts can make orders over sub-fund property as if it were a separate entity
• Segregated liability does not protect sub-fund assets from being used to meet the liabilities of another sub-fund where fraud or misrepresentation is involved
• A sub-fund can be wound up as though it were a separate company, but the liquidator's powers and responsibilities are confined solely to the sub-fund or sub-funds being wound up
• When winding up a sub-fund, references to "company" mean the sub-fund being wound up, "members" means the holders of shares in that sub-fund, and "creditors" means the creditors of that sub-fund

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