Gibraltar: Protected Cell Companies

A Protected Cell Company (PCC) is a single company with individual parts, known as cells, which are kept separate from each other. Each cell is only liable for its own debts and not for the debts of any other cell within the company. The provisions of the Companies Ordinance apply in relation to a protected cell company (subject to the provisions of the PCC Ordinance, and unless the context requires otherwise).

A company may be either incorporated as a PCC, or converted, if so authorised by its articles, into a PCC. A protected cell company is a single legal person, and the creation by a PCC of a cell does not create, in respect of that cell, a legal person separate from the company. A protected cell company must state that it is one, i.e. the name of the PCC must include "Protected Cell", "PCC", or any cognate expression approved in writing by the Registrar. The memorandum of a PCC shall state that it is such, and each cell shall have its own distinct name or designation.

There is a duty on the directors to keep the assets of each cell separately identifiable as follows:

1. to keep cellular assets separate and separately identifiable from non-cellular assets; and
2. to keep cellular assets attributable to each cell separate and separately identifiable from cellular assets attributable to other cells.

Directors may "cause or permit" cellular and non-cellular assets to be held by or through a nominee, or by a company whose shares and capital interests may be cellular assets, non-cellular assets, or a combination of both. Such assets may be collectively invested, or collectively managed by an investment manager, provided that the assets in question remain separately identifiable.

The rights of creditors are limited to the assets of the cell of which they are creditors.

A PCC can create and issue shares ("cell shares") in respect of any of its cells. The proceeds of the issue ("cell share capital") are comprised in the cellular assets attributable to the cell in respect of which the cell shares are issued. A protected cell company may pay a cellular dividend. Except in the case of a PCC which is authorised by the Financial Services Commissioner as a collective investment scheme, and which is redeeming units or shares in accordance with its scheme particulars, no reduction of cell share capital may be made without an order of the Court.

A company which is a Gibraltar insurer as defined in Section 2 of the Insurance Companies Ordinance, or a collective investment scheme authorised under the Financial Services Ordinance 1989 must obtain the consent of the Financial Services Commissioner before becoming a PCC.

In the case of securitisation companies not requiring a licence under the Financial Services Ordinances 1989 or 1998 established principally for the purposes of issuing bonds, notes or other debt securities or instruments, secured or unsecured, in respect of which the repayment of capital and interest is to be funded from the company’s investments, consent must be sought from the Finance Centre Director.