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Cell Companies Protected Cell Company (PCC).
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Cell Companies


The Protected Cell Company (PCC) was pioneered by Guernsey legislators and is used as a cost effective and efficient tool to separate assets and liabilities into cells, each with statutory protection of its assets from those in other cells. The PCC is a single legal entity, with the company itself made up of a core and a number of ring-fenced protected cells. It is a way of creating different portfolios of assets within one company.

The PCC has a number of potential advantages over other structures:

They are less expensive to administer than would be the
     case in a company with multiple subsidiaries, with only one
     board, company secretary and administrator required, and
     although assets and liabilities do need to be separated and      separately identifiable, the cost savings should be quite
     significant;

Because the cells of a PCC do not require registration they
     can be formed quickly by Board resolution;

A PCC is treated as a single legal entity for taxation
     purposes which can have tax benefits;

A PCC provides flexibility and protection if the core or a
     single cell of the PCC becomes insolvent. If a particular cell
     were to find itself in financial difficulty, a receiver could be      appointed of that cell without affecting the other cells or the
     core;

If a PCC enters into liquidation, the liquidator is required to
     recognize the rights of each individual cell and to protect the
     assets of each cell from the creditors of other cells;

The PCC structure allows segregation of risk. So, investors
     with a higher risk profile can invest into a cell which invests
     in riskier assets without the danger of any losses arising from
     those riskier investments spreading to investors who have a
     lower risk profile;

In the event that a single cell is successful and wishes to      transact in its own right, this cell can be converted into a
     company without the remainder of the PCC being affected.

As an alternative, the Incorporated Cell Company (ICC) takes the cell concept one step further and makes each cell a separately incorporated, distinct legal entity. The ICC and its cells all have the same directors, but the legislation allows incorporated cells to exploit their status as independent legal entities, with the ability to contract amongst themselves and with third parties.

Hansard can assist with the set-up and administration of a cell company, either as a stand alone entity or as an integral part of a large client wealth management structure.
Protected Cell Company (PCC).
 
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