Protected and Incorporated Cell Companies
- June 26, 2022
- Posted by: Paul Niederer
- Category: Countries Structures
Protected and Incorporated Cell Companies are the genesis of the new Australian corporate form the CCIV.
The move by national regulators to accommodate protected cell companies in the regulatory structure within a country continues to expand from country to country. From July the 1st 2022 Australia will have the CCIV structure.
This follows the international best practice already working in Ireland (ICAV), the United Kingdom (OEIC), Hong Kong (OFC) and Singapore (VACC).
Protected Cell Companies have been operational for many years. They exist in Luxembourg, Hong Kong, Caymans, Delaware, Guernsey and Jersey. The key features are:
- The cell is treated as a separate legal entity
- Liability is limited to each cell as they are ring-fenced
- The umbrella fund contracts on behalf of each sub-fund
- Directors must keep the property of each cell separate
Guernsey and Jersey have incorporated cell companies. These companies allow both protected cells and incorporated cells.
The key features of these are
- Each cell is a separate legal entity. As an example, the Australian CCIV sub-units are not separate legal entities although they will have their own ABN or business registration numbers.
- The structure limits liability
- A cell has the capability to enter into legal contracts given its separate legal personality
- Legal claims are limited to cells.
[…] Umbrella Vehicle. In contrast to other types of companies, a CCIV is an umbrella vehicle that is comprised of one or more sub-funds. Each sub-fund is comparable to an individual unit trust which is commonly used under the existing MIS regime. […]
[…] did CCIVs get here? It’s a two-decade journey! The UK has had the umbrella structure for 10 years now is the time for Australia to get a similar […]
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