The Isle of Man Companies Act 2006 and Protected Cell Companies (Eligibility) Regulations 2010 permits the use of a Protected Cell Company (PCC) for any business purpose and the opportunity therefore now exists for the use of a PCC in a wide range of corporate transactions.

What is a Protected Cell Company?

A PCC is limited by shares and is regarded as a single legal entity in its own right.  However a PCC is distinct from a normal company limited by shares in that it has the ability to segregate and protect its assets in separate cells.  This distinction is brought about by two key factors:

The Core                                    

The non-cellular part of the company otherwise known as the “core” of the company – this is able to share the management of the company and in doing so able to create numerous individual cells which have their own separate corporate personality (note – this does not create a separate legal person).

The Cells

The cells created by the “core” are able to ring fence differing assets and liabilities within that cell and protect from the assets and liabilities of other cells created.  These are known as “cellular assets”.

Each cell created therefore has the opportunity to have its own individual corporate identity, which could influence for example its attitude to income growth, dividend policy and the types of assets held.

Isle of Man PCC Key Features

  • It is a single legal person;
  • It may have one or more cells for the purpose of segregating and protecting cellular assets;
  • The creation of a cell does not create, in respect of that cell, a legal person separate from the PCC; and
  • Each cell of the PCC must have its own distinct name or designation.

Isle of Man PCC Legal Requirements

Isle of Man PCC

Corporate Details

General

  • Type of entity:

PCC

  • Type of law:

Hybrid

  • Number of Cells

Unlimited

  • Registered Office

Yes

Share capital or equivalent

  • Minimum paid up:

10% of the Authorized capital

  • Shares types

Cellular and non-Cellular

Directors

  • Minimum number:

Two

  • Corporate Director

Not Allowed

  • Local required:

No

Company Secretary

  • Required:

Yes (must be a Isle of Man Corporate Service Provider)

Annual Accounts, Audit, Return

  • Requirement to file accounts:

Yes, to the Commission

  • Requirement to file annual return:

Yes, to the commission

  • Permitted Business Activities
  1. Insurance
  2. Any other business activity approved by the commission

Isle of Man PCC Tax Treatment

  1. An Isle of Man PCC is exempted from stamp duty in respect of properties, shares and all transactions relating to its business
  2. Not liable for business tax on income derived outside Isle of Man

Isle of Man PCC Duration for Set up

Around 2 weeks

Distinctive Advantages of Isle of Man PCC

  • Isle of Man PCC as part of business structure is ideal for use in umbrella funds and captive insurance structures, because the losses of one cell will not have an adverse effect on the other cells
  • Isle of Man PCC can limit the creditor exposure, the cells are independent and the assets of a particular cell can be applied to the liabilities of that particular cell only
  • Isle of Man PCC is cost effective compared to forming various subsidies for different businesses
  • Isle of Man PCC has an unlimited number of cells.

The Valsen Advantage

  1. End to end comprehensive service
  2. Speedy and efficient service
  3. Expert advice on structuring options
  4. Dedicated ongoing compliance support
  5. Extensive network pool of service providers