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Types of Companies (Protected Cell Companies (Uses (Collective investment…
Types of Companies
Protected Cell Companies
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The Isle of Man & Cayman Islands introduced legislation based on the Guernsey product, but the Jersey model differs slightly
Key principle behind PCCs is that the assets and liabilities of a cell can be segregated, ring fencing them. Meaning the assets of a cell should only be available to the creditors and shareholders of that particular cell
Each cell has its own constitution and members, a person is not a member of a cell company by virtue of being a member of a cell
The legalisation could require that the directors, secretary and registered office of the cells are the same as those of the cell company
Guernsey imposes this requirement, whereas Jersey allows the directors of the cell company to differ from those of the cell
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Protected cells do not have their own legal personality, when a PCC wishes to contract, it does so by the cell company acting on its behalf
Jersey cells are treated as though they are a company for all other aspects, and must file an annual return as if it were a legal person
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Many offshore centres limit the use of PCCS, apart from Jersey
Uses
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Popular vehicle in the captive insurance industry as they enable different insurers and classes of investors to benefit from shared overhead costs without losing protection from insolvency of other cells
Attractive vehicle for umbrella fun investment schemes and collective investment funds, as a framework can be established that includes all of the participants (manager, administrators and custodians). The documentation, once in place, can easily be replicated upon creation of a new cell
Cell companies that require regulatory consent, this can be obtained in respect of one orange, and then obtaining a regulatory approval for further cells is a simplified matter
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Unlimited companies
If the constitution of a company does not limit the liability of its members, the company is an unlimited company
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Not very common, however the disclosure requirements are lower than those of limited companies in some jurisdictions and this is attractive to some individuals
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