Protected Cell Company (PCC)
The concept behind a PCC is to provide a single corporate vehicle that has multiple separate legal identities,
hosted within one brand. The legal concept involved is that of ring-fencing the activities of certain participants in a corporate vehicle so that in the event of a corporate reorganisation, each parcel of assets represented by a cell would have to be treated separately. Unlike the Limited Partnership ("LP") it is clear that there can be no claims against participants.
PCCs can be formed in the following prominent jurisdictions, Nevada, Isle of Man, Guernsey, Mauritius and Bahamas. The reason for the interest in Mauritius is the fact that the PCC company is able to utilise the Mauritius tax treaty network with many emerging and mature economies and thus better returns can be realised, for example, capital gains may be avoided completely in the country where the investment is made. The Mauritius legislation provides a more flexible platform compared to other jurisdictions such as the new legislation in Isle of Man.
Legislation enabling the formation of protected cell companies ("PCCs") came into effect in Mauritius on 1st January, 2000. The legislation, in the form of the Protected Cell Companies Act 1999 ("the PCC Act") is a relatively exceptional piece of legislation.
A PCC is a single legal entity, which operates in two distinct parts. These distinct parts are the Core and the Cells. There is (and must only be) one Core, but there may be an infinite number of Cells. Each cell of the PCC will be a separate "entity" within the corporation as a whole, separate fund definitions for each cell could be undertaken
Cellular shares are issued, as required, under different names or numbers so as to identify, and to represent, the particular Cells to which they are attributable. Alternatively, each Cell may be given an identifying number, rather than a name.
There are some other features of the PCC, namely:
The Cells can be listed on the Mauritius Stock Exchange for convenience listing. DITCL has experience in listing companies on the Mauritian Stock Exchange.
As the Mauritius Regulator does not require the PCC to identify the names of the cellular shareholders, anonymity is available. This connection between named cellular shares/identifying numbered cellular shares, and the Cells to which each is attributable, is enshrined in the constitution of the PCC and is mandated by the PCC Act.
Once a Cell has been created in consequence of a creation and issue of cellular shares, all assets of (including profits and reserves), and all matters and acts relating to, that Cell must, by law, be identified by the Cell name (or number, if applicable). For example, separate accounting must be conducted and recorded with respect to each Cell, and each Cell's assets must, at all times, be separately ascertainable and identifiable - as assets distinct from the assets of other Cells, and the assets of the PCC itself (the Core assets).
Under the PCC Act, the assets of each individual Cell are attributable to that Cell alone; and to no other or others. By law, creditors of one Cell have no recourse to the assets of any other Cell. Furthermore, creditors of a Cell may, in certain limited circumstances, have recourse to assets held within the Core, that is to say, the Core assets. The Core assets (which will normally be minimal relative to Cell assets) are themselves separately identified in order that there can be no confusion as which assets are Core assets, and which are not.
Managed Trust Operation
Many banks, accountancy, legal, fiduciary and financial services firms have considered creating their own Trust Company in a tax-efficient jurisdiction, but cannot justify the cost of setting up such an operation.
The solution is to establish a Managed Trust Company. DITCL is perfectly geared to take advantage of Mauritius as a cost-effective jurisdiction and provide Managed Trust Operations at affordable rates.