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Companies , Segregated portfolio company: A BVI SPC is a single company…
Companies
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Cell companies
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Introduced in Guernsey in the late 90's, since then a number of offshore jurisdictions followed suit introducing their own equivalent legislation
Have allowed a single over-arcing legal structure to be created, below which multiple segregated pools of assets may exist, each one capable of being classified as a fund
The ability to have multiple funds under management in one overriding structure existed prior to cellular companies through the use of unit trusts, but the creation of cell companies provides that familiarity with a corporate structure whilst allowing flexibility not available in standard corporate structures
Create a legally recognised form on non-recourse. between their individual cells whereby the assets of one cell are segregated from, and so legally distinct from, those of the core and all other cells
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Common throughout all cellular entities is the concept of the core, that being the part of the legal entity distinct from its segregated / protected cells
The core governs both the company and all cells created thereunder and in legislation, the board of the company is required also to be the board of the cells
Unincorporated cells
In the case of both PCC and segregated portfolio companies, there is one legal entity in law, being the PCC or SPC itself
Protected cells or portfolios created within the legal entity are not in themselves incorporated and so do not gain their own separate legal identity
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Each cell has limited recourse, meaning that a creditor or other party with an interest in one cell may only seek to perfect that interest in respect of that call
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Limited liability
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Favoured by investors as it provides them with certainty as to the amount of capital they will need to pay in to the fund and thus the extent of their liability (max financial outlay to the fund)
Non-cellular
While shareholder rights can be carved out to determine rights to capital and/or income and the priority in which they will be paid out, a non cellular company will always have a single pool of assets over which people may seek to asset certain rights and obligations
As well as investors, other parties can obtain rights in respect of the entire asset pool, such as a lending institution or other creditors
Distinct from other entity types as under domestic laws they automatically gain legal personality and in the absence of exemption are opaque for taxation purposes
Segregated portfolio company: A BVI SPC is a single company that contains a number of segregated portfolios