2.1. Special Purpose Companies limited to Exempt Activities

2.1.1. The Articles of Association of a Special Purpose Company must provide that the purpose of the Company is limited to conducting Exempt Activities.

2.1.2. A Special Purpose Company must not conduct an activity that is not an ExemptActivity.

2.1.3. Contravention of subrule 2.1.2 is punishable by a fine of not more than US$ 5000.

2.2. Use of Special Purpose Companies etc.

2.2.1. A Special Purpose Company must not be:

• (a) the trustee of an Investment Trust; or
• (b) the general partner of an Investment Partnership; or
• (c) an Investment Company.

2.2.2. A Special Purpose Company must not conduct activities that are the conduct of Financial Services under the AIFC Financial Services Framework Regulations unless it is authorised by the AFSA to conduct the activities.

2.3. Revocation of incorporation as Special Purpose Company

2.3.1. The Registrar of Companies may revoke the status of a Special Purpose Company as a Special Purpose Company if:

1. (a) the company conducts an activity that is not an Exempt Activity; or
2. (b) a Person other than a Person mentioned in sub rule 4.1.2(a), (b) or (c) (Shareholders and Shares) becomes a Shareholder of the Company (except as is permitted under sub rule 4.1.3); or (c) the company asks the Registrar to revoke its status as a Special Purpose Company.

2.3.2. Before acting under sub rule 2.3.1(a) or (b), the Registrar of Companies must, by Written notice given to the Special Purpose Company, tell the company:

1. (a) that the Registrar is considering whether to revoke its status as a Special Purpose Company; and
2. (b) that the company may make representations, in the way stated in the notice, about the matter within the period specified in the notice.

2.3.3. The Registrar of Companies must consider any representations made by the Special Purpose Company in accordance with the notice (if any) given to the company under sub rule 2.3.2.

2.3.4. If the Registrar of Companies revokes the status of the Special Purpose Company as a Special Purpose Company, the company ceases to be incorporated as a Special Purpose Company and these Rules cease to apply to it as a Special Purpose Company, but it remains a Company Limited by Shares.

2.3.5. If the Registrar of Companies revokes the status of the Special Purpose Company as a Special Purpose Company, the Registrar must make appropriate changes to the registers kept by the Registrar under these Rules and the AIFC Companies Regulations.