A hybrid Company is a company limited by shares and by guarantee.  The principle of limitation of liability operates as follows;

Members who are shareholders, have their liability limited to the amount unpaid, if any, on the shares respectively held by them.

Members who have given a guarantee, have their liability to the amount they have undertaken to contribute from time to time, and in the event of it being wound up.

In some jurisdictions a Hybrid company is referred as a ‘quasi-trust”.  Hybrid Companies or quasi-trusts are common for use where civil law countries are involved as such countries do not normally recognize the legality of trusts.  The Hybrid Company is also a very useful tax planning tool as it may be set up so as not qualify as a Controlled Foreign Corporation.  A GBC1 or GBC2 may be set up as a company Limited by guarantee or as a Hybrid Company.

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