The Incorporated Cell Company (ICC) These are similar to
segregated account companies used in some other jurisdictions. They
are well recognised structures amongst international finance
Protected Cell Companies
A PCC is a single legal entity with separate and distinct
"cells" within it. Each cell may, but is not required to,
have cell shares. A cell of a PCC cannot contract in its own name;
it is the PCC which will be the contracting party, in respect of
the relevant cell which must be identified.
Unlike certain other jurisdictions, Jersey law does no seek to
restrict the use of PCCs. However, the Jersey Financial Services
Commission will monitor their uses and issue guidance if
Because a PCC is a single legal entity for tax purposes, it can
be seen as a solution for entities caught by Controlled Foreign
Corporation rules of their jurisdiction.
Beyond the funds and captive/life insurance markets, they are
popular as asset-holding vehicles and segregated investment
vehicles for high net worth individuals.
Legal segregation & Position of Creditors
Assets and liabilities of cells in a PCC are, by law, segregated
from those of other cells and those assets are not available to
creditors of other cells in an insolvency. Recourse beyond the cell
is permitted only in certain circumstances.
There is a statutory provision that no party shall seek, whether
in any proceedings or by any other means whatsoever or wheresoever,
to make or attempt to make liable any cellular assets attributable
to any cell of the PCC other than the cell with which they are
A PCC may pay a cellular dividend in respect of cell shares by
reference only to the cellular assets and liabilities, or the
profits, attributable to the relevant cell. In determining whether
or not profits are available for the purpose of paying a cellular
dividend, no account need be taken of:
the profits and losses, or the assets and liabilities,
attributable to any other cell of the company; or
non-cellular profits and losses, or assets and
It is the duty of the directors of a PCC:
to keep cellular assets separate and separately identifiable
from non-cellular assets;
to keep cellular assets attributable to each cell separate and
separately identifiable from cellular assets attributable to other
where transacting in respect of a cell, inform third parties of
this fact and ensure if is reflected in the relevant minutes.
Incorporated Cell Companies
An ICC is a legal entity, as are each of the Incorporated Cells
(ICs) associated with it. The ICC and each of its ICs have the
following in common:
A single annual return is filed for the ICC containing
information relevant to each IC.
ICs contract in their own names as they are separate and
distinct entities from their ICC.
As with PCCs, Jersey law does not restrict the use of ICCs. They
are particularly versatile structures for the following
a lower cost base (compared to standalone companies) because of
the ability to share certain functions through the ICC,
particularly attractive for fledgling ventures; and
the ability to spin-off an IC or convert into a stand-alone
company through various mechanisms set out in the legislation.
There are other ways in which ICCs and ICs may be reorganised.
As with PCCs, they could be used for structuring investment
An example of this would be property development and holding
companies each set up within different ICs or cells to hold
intellectual property rights or image rights of budding sports
Legal segregation & Position of Creditors
Legal segregation is achieved by reason of the fact that an ICC
and an IC are each distinct corporate entities. The position of
creditors is the same as for a normal corporate entity. ICs
contract in their own name hence there is no issue of cross
liabilities within an ICC.
Detailed notes on PCCs and ICCs are available on request.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).