{"id":2366,"date":"2015-01-01T09:11:10","date_gmt":"2015-01-01T09:11:10","guid":{"rendered":"https:\/\/www.riaabarkergillette.com\/uae\/?p=2366"},"modified":"2015-01-01T09:11:10","modified_gmt":"2015-01-01T09:11:10","slug":"protected-cell-companies-in-the-difc","status":"publish","type":"post","link":"https:\/\/riaabarkergillette.com\/uae\/insight-article\/protected-cell-companies-in-the-difc\/","title":{"rendered":"Protected Cell Companies in the DIFC"},"content":{"rendered":"<h4 class=\"small-heading\">Introduction<\/h4>\n<p>A Protected Cell Company (\u201cPCC\u201d) is one of the legal forms of companies that may be incorporated in the Dubai International Financial Centre (\u201cDIFC\u201d). As a corporate vehicle, the DIFC Protected Cell Companies share similarities with \u2018segregated portfolio companies\u2019 or \u2018protected cell companies\u2019 available in other financial jurisdictions. <\/p>\n<p>In essence, a PCC is a single company consisting of a core and a number of cells, which are legally ring-fenced from each other. Each cell has assets and liabilities attributed to it and its assets cannot be used to meet the liabilities of any other cell. A PCC also has core assets (non-cellular) that may be used to meet liabilities that cannot be attributed to a single cell. *<\/p>\n<h4 class=\"small-heading\">Legal Framework<\/h4>\n<p>Protected Cell Companies are governed by the DIFC Companies Law 2 of 2009 (\u201cCompanies Law\u201d) and Chapter 12 of the DIFC Companies Regulations (the \u201cPCC Regulations\u201d).  PCC\u2019s differ from other corporate entities that can be set up in the DIFC in that they are subject to a certain degree of authorization and regulation by the Dubai Financial Services Authority (\u201cDFSA\u201d). As such, certain rules of the DFSA Rulebook also apply to Protected Cell Companies. <\/p>\n<p>Types of Protected Cell Companies and Permitted Activities<\/p>\n<p>A Protected Cell Company may be formed as Open Ended or Closed Ended: <\/p>\n<div class=\"bullet-points-list\">\n<ul>\n<li>An Open Ended Protected Cell Company has a variable share capital and its articles of association must allow its shareholders to have their shares redeemed by the Fund Manager (as defined in the Collective Investment Law 2010) upon request at a price based on the net asset value of the property of the relevant cell in the manner provided in the CIR module of the DFSA Rulebook. An Open Ended Protected Cell Company may only be established as a Fund (as defined in the Collective Investments Law 2010) entity. The PCC structure is particularly relevant to Umbrella Funds, as the segregated cell structure allows the establishment of sub-funds as separate cells of the main fund.<\/li>\n<li>Any other PCC is a Closed Ended Protected Cell Company. A Closed Ended Protected Cell Company may only carry on Insurance Business (as defined in the Regulatory Law 2004) activities, either as a non-captive or as a captive insurer. <\/li>\n<\/ul>\n<\/div>\n<h4 class=\"small-heading\">Incorporation of Protected Cell Company<\/h4>\n<p>The process of incorporating a Protected Cell Company in the DIFC involves:<\/p>\n<div class=\"bullet-points-list\">\n<ul>\n<li>The applicant must first obtain the DFSA\u2019s consent to the incorporation of the company;<\/li>\n<li>Once the DFSA\u2019s consent has been secured, the applicant may submit to the Registrar of Companies an application for registration together with supporting documents and fees payable. <\/li>\n<\/ul>\n<\/div>\n<h4 class=\"small-heading\">Consent of the DFSA <\/h4>\n<p>Given the nature of their permitted activities, as mentioned above, PCC\u2019s cannot be incorporated without the prior consent of the DFSA. Moreover, following their incorporation, PCC\u2019s are subject to supervision of the DFSA. Any change in a PCC\u2019s articles must be approved by the DFSA in writing. Furthermore, any failure by the PCC to comply with the DFSA\u2019s rules or licensing conditions, the Companies Law or the PCC Regulations may result in the DFSA giving directions to the company or even revoking its consent. <\/p>\n<h4 class=\"small-heading\">Shares and Shareholders of a Protected Cell Company<\/h4>\n<p>A Protected Cell Company may create and issue cell shares and related cell share certificates in respect of each cell. The cell share capital is comprised in the cellular assets attributable to the cell for which the cell shares were issued.  Cellular dividends are calculated in respect of the profits and losses of each specific cell and cannot be paid out of another cell or non-cellular profits and losses. <\/p>\n<p>A register of shareholders and an index of the names of the shareholders must be kept by the company. <\/p>\n<h4 class=\"small-heading\">Separation of Assets<\/h4>\n<p>The assets of a Protected Cell Company are either cellular assets or non-cellular assets. The cellular assets are attributable to the cells of the company (proceeds of cell share capital and reserves, including retained earnings, capital reserves and share premiums). The other assets of a Protected Cell Company are non-cellular or core assets.  <\/p>\n<p>The directors must keep cellular assets attributable to each cell distinct and separately identifiable from non-cellular assets and cellular assets attributable to other cells.  If any director breaches his duty to keep assets separate he is personally liable for any loss or damage incurred as a result of such breach (although he has a right of indemnity against the non-cellular assets of the company, unless he was fraudulent, reckless or negligent, or acted in bad faith). <\/p>\n<h4 class=\"small-heading\">Prohibition of Dealings between Cells<\/h4>\n<p>Any transfer of cellular assets attributable to a cell to another cell or an amalgamation or consolidation of a cell with or into one or more other cells of the PCC is prohibited unless it has been approved by Court order.  When considering whether to make an order the Court will take into account factors such as whether the creditors (without recourse to the assets of the relevant cells) have consented to the transaction and whether the Company\u2019s and the relevant cells\u2019 shareholders have been prejudiced by the transaction. The Court will also consider the DFSA\u2019s representations.<\/p>\n<h4 class=\"small-heading\">Creditors\u2019 Rights<\/h4>\n<p>One of the PCC\u2019s main features is that liability arising out of a particular cell can only be satisfied by using the assets of that particular cell and a creditor cannot resort to the assets of any other cell of the PCC.  As for liability not attributable to a particular cell, only non-cellular assets might be used to satisfy such liability. <\/p>\n<h4 class=\"small-heading\">Disclosure Requirements<\/h4>\n<p>A PCC must, when transacting with a person, give such person clear information on the type of company it is, on the particular cell involved in the transaction and on the rules of liability in relation to cells of a PCC.  Failure to provide such information may result in the directors incurring personal liability to that person in respect of the transaction subject to the Court\u2019s decision. Personal liability incurred by the directors in this case cannot be avoided by contract. <\/p>\n<h4 class=\"small-heading\">Conclusion <\/h4>\n<p>Since the number of Closed Ended Protected Cell Companies and Open Ended Protected Cell Company established in the DIFC is currently very low, the success and feasibility of DIFC Protected Cell Companies in fund structures remains to be determined.  <\/p>\n<p>* Source: DIFC Reinsurance Captives Guide<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Overview: Dubai International Financial Centre &#8211; Protected Cell Companies <\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_coblocks_attr":"","_coblocks_dimensions":"","_coblocks_responsive_height":"","_coblocks_accordion_ie_support":"","footnotes":""},"categories":[16],"tags":[18,39,32],"class_list":["post-2366","post","type-post","status-publish","format-standard","hentry","category-insight-article","tag-banking-and-finance","tag-commercial","tag-corporate"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.2 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Protected Cell Companies in the DIFC - RIAA Barker Gillette<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/riaabarkergillette.com\/uae\/insight-article\/protected-cell-companies-in-the-difc\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Protected Cell Companies in the DIFC - RIAA Barker Gillette\" \/>\n<meta property=\"og:description\" content=\"Overview: Dubai International Financial Centre - Protected Cell Companies\" \/>\n<meta property=\"og:url\" content=\"https:\/\/riaabarkergillette.com\/uae\/insight-article\/protected-cell-companies-in-the-difc\/\" \/>\n<meta property=\"og:site_name\" content=\"RIAA Barker Gillette\" \/>\n<meta property=\"article:published_time\" content=\"2015-01-01T09:11:10+00:00\" \/>\n<meta name=\"author\" content=\"riaabgmanager\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"riaabgmanager\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"5 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/riaabarkergillette.com\/uae\/insight-article\/protected-cell-companies-in-the-difc\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/riaabarkergillette.com\/uae\/insight-article\/protected-cell-companies-in-the-difc\/\"},\"author\":{\"name\":\"riaabgmanager\",\"@id\":\"https:\/\/riaabarkergillette.com\/uae\/#\/schema\/person\/ae7ecac8659fcbe3245e17512a728635\"},\"headline\":\"Protected Cell Companies in the DIFC\",\"datePublished\":\"2015-01-01T09:11:10+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/riaabarkergillette.com\/uae\/insight-article\/protected-cell-companies-in-the-difc\/\"},\"wordCount\":1047,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\/\/riaabarkergillette.com\/uae\/#organization\"},\"keywords\":[\"Banking and Finance\",\"Commercial\",\"Corporate\"],\"articleSection\":[\"Insight article\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/riaabarkergillette.com\/uae\/insight-article\/protected-cell-companies-in-the-difc\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/riaabarkergillette.com\/uae\/insight-article\/protected-cell-companies-in-the-difc\/\",\"url\":\"https:\/\/riaabarkergillette.com\/uae\/insight-article\/protected-cell-companies-in-the-difc\/\",\"name\":\"Protected Cell Companies in the DIFC - RIAA Barker Gillette\",\"isPartOf\":{\"@id\":\"https:\/\/riaabarkergillette.com\/uae\/#website\"},\"datePublished\":\"2015-01-01T09:11:10+00:00\",\"breadcrumb\":{\"@id\":\"https:\/\/riaabarkergillette.com\/uae\/insight-article\/protected-cell-companies-in-the-difc\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/riaabarkergillette.com\/uae\/insight-article\/protected-cell-companies-in-the-difc\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/riaabarkergillette.com\/uae\/insight-article\/protected-cell-companies-in-the-difc\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/riaabarkergillette.com\/uae\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Protected Cell Companies in the DIFC\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/riaabarkergillette.com\/uae\/#website\",\"url\":\"https:\/\/riaabarkergillette.com\/uae\/\",\"name\":\"RIAA Barker Gillette\",\"description\":\"\",\"publisher\":{\"@id\":\"https:\/\/riaabarkergillette.com\/uae\/#organization\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/riaabarkergillette.com\/uae\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Organization\",\"@id\":\"https:\/\/riaabarkergillette.com\/uae\/#organization\",\"name\":\"RIAA Barker Gillette\",\"url\":\"https:\/\/riaabarkergillette.com\/uae\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/riaabarkergillette.com\/uae\/#\/schema\/logo\/image\/\",\"url\":\"\",\"contentUrl\":\"\",\"caption\":\"RIAA Barker Gillette\"},\"image\":{\"@id\":\"https:\/\/riaabarkergillette.com\/uae\/#\/schema\/logo\/image\/\"}},{\"@type\":\"Person\",\"@id\":\"https:\/\/riaabarkergillette.com\/uae\/#\/schema\/person\/ae7ecac8659fcbe3245e17512a728635\",\"name\":\"riaabgmanager\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/secure.gravatar.com\/avatar\/679ab81e7a9713a338efd9856c07071d47069ccaedb6f6a7ceae1d3d4aedc930?s=96&d=mm&r=g\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/679ab81e7a9713a338efd9856c07071d47069ccaedb6f6a7ceae1d3d4aedc930?s=96&d=mm&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/679ab81e7a9713a338efd9856c07071d47069ccaedb6f6a7ceae1d3d4aedc930?s=96&d=mm&r=g\",\"caption\":\"riaabgmanager\"}}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Protected Cell Companies in the DIFC - RIAA Barker Gillette","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/riaabarkergillette.com\/uae\/insight-article\/protected-cell-companies-in-the-difc\/","og_locale":"en_US","og_type":"article","og_title":"Protected Cell Companies in the DIFC - RIAA Barker Gillette","og_description":"Overview: Dubai International Financial Centre - Protected Cell Companies","og_url":"https:\/\/riaabarkergillette.com\/uae\/insight-article\/protected-cell-companies-in-the-difc\/","og_site_name":"RIAA Barker Gillette","article_published_time":"2015-01-01T09:11:10+00:00","author":"riaabgmanager","twitter_card":"summary_large_image","twitter_misc":{"Written by":"riaabgmanager","Est. reading time":"5 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/riaabarkergillette.com\/uae\/insight-article\/protected-cell-companies-in-the-difc\/#article","isPartOf":{"@id":"https:\/\/riaabarkergillette.com\/uae\/insight-article\/protected-cell-companies-in-the-difc\/"},"author":{"name":"riaabgmanager","@id":"https:\/\/riaabarkergillette.com\/uae\/#\/schema\/person\/ae7ecac8659fcbe3245e17512a728635"},"headline":"Protected Cell Companies in the DIFC","datePublished":"2015-01-01T09:11:10+00:00","mainEntityOfPage":{"@id":"https:\/\/riaabarkergillette.com\/uae\/insight-article\/protected-cell-companies-in-the-difc\/"},"wordCount":1047,"commentCount":0,"publisher":{"@id":"https:\/\/riaabarkergillette.com\/uae\/#organization"},"keywords":["Banking and Finance","Commercial","Corporate"],"articleSection":["Insight article"],"inLanguage":"en-US","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/riaabarkergillette.com\/uae\/insight-article\/protected-cell-companies-in-the-difc\/#respond"]}]},{"@type":"WebPage","@id":"https:\/\/riaabarkergillette.com\/uae\/insight-article\/protected-cell-companies-in-the-difc\/","url":"https:\/\/riaabarkergillette.com\/uae\/insight-article\/protected-cell-companies-in-the-difc\/","name":"Protected Cell Companies in the DIFC - RIAA Barker Gillette","isPartOf":{"@id":"https:\/\/riaabarkergillette.com\/uae\/#website"},"datePublished":"2015-01-01T09:11:10+00:00","breadcrumb":{"@id":"https:\/\/riaabarkergillette.com\/uae\/insight-article\/protected-cell-companies-in-the-difc\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/riaabarkergillette.com\/uae\/insight-article\/protected-cell-companies-in-the-difc\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/riaabarkergillette.com\/uae\/insight-article\/protected-cell-companies-in-the-difc\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/riaabarkergillette.com\/uae\/"},{"@type":"ListItem","position":2,"name":"Protected Cell Companies in the DIFC"}]},{"@type":"WebSite","@id":"https:\/\/riaabarkergillette.com\/uae\/#website","url":"https:\/\/riaabarkergillette.com\/uae\/","name":"RIAA Barker Gillette","description":"","publisher":{"@id":"https:\/\/riaabarkergillette.com\/uae\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/riaabarkergillette.com\/uae\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Organization","@id":"https:\/\/riaabarkergillette.com\/uae\/#organization","name":"RIAA Barker Gillette","url":"https:\/\/riaabarkergillette.com\/uae\/","logo":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/riaabarkergillette.com\/uae\/#\/schema\/logo\/image\/","url":"","contentUrl":"","caption":"RIAA Barker Gillette"},"image":{"@id":"https:\/\/riaabarkergillette.com\/uae\/#\/schema\/logo\/image\/"}},{"@type":"Person","@id":"https:\/\/riaabarkergillette.com\/uae\/#\/schema\/person\/ae7ecac8659fcbe3245e17512a728635","name":"riaabgmanager","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/secure.gravatar.com\/avatar\/679ab81e7a9713a338efd9856c07071d47069ccaedb6f6a7ceae1d3d4aedc930?s=96&d=mm&r=g","url":"https:\/\/secure.gravatar.com\/avatar\/679ab81e7a9713a338efd9856c07071d47069ccaedb6f6a7ceae1d3d4aedc930?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/679ab81e7a9713a338efd9856c07071d47069ccaedb6f6a7ceae1d3d4aedc930?s=96&d=mm&r=g","caption":"riaabgmanager"}}]}},"_links":{"self":[{"href":"https:\/\/riaabarkergillette.com\/uae\/wp-json\/wp\/v2\/posts\/2366","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/riaabarkergillette.com\/uae\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/riaabarkergillette.com\/uae\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/riaabarkergillette.com\/uae\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/riaabarkergillette.com\/uae\/wp-json\/wp\/v2\/comments?post=2366"}],"version-history":[{"count":0,"href":"https:\/\/riaabarkergillette.com\/uae\/wp-json\/wp\/v2\/posts\/2366\/revisions"}],"wp:attachment":[{"href":"https:\/\/riaabarkergillette.com\/uae\/wp-json\/wp\/v2\/media?parent=2366"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/riaabarkergillette.com\/uae\/wp-json\/wp\/v2\/categories?post=2366"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/riaabarkergillette.com\/uae\/wp-json\/wp\/v2\/tags?post=2366"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}