Protected Cell Company
The Protected Cell Company is a special purpose vehicles providing legal segregation of assets attributable to each cell of the company whether corporately or individually owned. The company is thus made up of different cells. The Protected Cell Company offers a wide range of applications to rent-a-captive, life assurance, reinsurance and collective investment schemes businesses.
Incorporation & Registration
A PCC may be directly incorporated or may be registered as a foreign company by way of continuation as a PCC, provided that the incorporation and registration requirements prescribed in the Companies Act 2001 are satisfied. The incorporation procedure for a PCC is similar to that of an Offshore Company and, therefore the application is channeled through the FSC. In the case of a continuation, additional requirements as laid down in section 5 of the PCC Act must be satisfied. Section 6 of the Act stipulates that the suffix “PCC” must be added to the name of the company. The PCC Act 1999 provides for the possibility to convert an existing company into a PCC.
Management of a PCC
A PCC is managed by its Directors. However, the management may be transferred or shared through a management contract to an Investment Manager in the case of collective investment schemes. á Each cell may be managed independently by its own Board of Directors or by the Directors of the PCC.
No minimum capital requirement is imposed for the PCC and each cell. However, on a case to case basis and depending on the nature of the business, the FSC may prescribe certain capital requirements. In the case of insurance or re-insurance business, each cell must abide to the Offshore Insurance Regulations 1992 as far as the minimum paid up capital is concerned.
Winding Up & Liquidation
Special winding up procedures are provided in the Act which protects contagion of solvent cells by insolvent ones.
The PCC Act 1999 provides for receivership and administration orders and new recourse to the creditor of the insolvent cell to the assets of the other solvent cells.
Reporting & Filing of Audited AccountsA PCC is required to submit annual audited accounts to the MOBAA only. The accounts should contain a note explaining the status of the various cells.
As far as taxation is concerned, the PCC is the only entity liable to tax.
Dividends are paid from the profits attributable to the respective cell.