Introduction

Under the Protected Cell Companies Act 2001 (“PCC Act”) one company may segregate its assets and liabilities in different cells. These are known as a protected cell companies (“PCCs” or “PCC”). A PCC remains a single legal entity and the liability of the company in respect of each cell is limited to the assets attributable to the relevant cell, not for the debts of any other cell.

The PCC Act states that a protected cell company is a single legal person and that the creation by a PCC of a cell does not create, in respect of that cell, a legal person separate from the company.

A PCC may create and issue cell shares in respect of any of its cells. The proceeds of the issue are comprised in the cellular assets attributable to the cell in respect of which the cell shares are issued. A PCC may pay a cellular dividend.

The rights of creditors are limited to the assets of the cell of which they are creditors. In the winding up of a PCC, the assets forming part of the estate shall only be the non-cellular assets. The winding up shall not terminate any agency, or in any way whatsoever affect the authority or power of any officer, receiver, administrator, servant or agent of the PCC in respect of the cellular assets.

Any liquidator of a PCC has a duty to keep cellular assets separate and separately identifiable from non-cellular assets. The liquidator must also keep cellular assets attributable to each cell separate and separately identifiable from those assets attributable to other cells.

Setting up Experienced Investor Funds as Protected Cell Companies

Many Experienced Investor Funds are set up as PCCs as they can, for example, allow sub-funds to pursue different investment strategies and allow sub funds to be created for different clients.  

This allows there to be one board of directors managing multiple sub-funds via distinct Cells following different investment strategies having ring-fenced assets and liabilities. In this way, the profits of one sub-fund will not benefit another and, equally, its liabilities will not cross-contaminate another sub-fund.

Detailed information on Experienced Investor Funds can be found here.

Our specialist lawyers have the experience and expertise to do this work and will be happy to help.