Protected Cell Company (PCC)

Definition

A Protected Cell Company (PCC) is a single company whose legal structure allows several compartments, called "cells", to be created within it. Each cell has its own assets and liabilities, legally separated from those of the other cells and from those of the company's general account (the "core"). This separation means that, in the event of financial difficulty affecting one cell, creditors of that cell have, in principle, no recourse against the assets of the other cells or of the core. The PCC nevertheless remains one and the same legal person: the cells have no separate legal personality, unlike subsidiaries.

Framework in Mauritius

In Mauritius, the PCC is a company form recognised under legislation dedicated to protected cell companies, separate from the regime for ordinary companies governed by the Companies Act. When incorporated for global business activities, a PCC remains subject, like any Global Business Company, to the supervision of the Financial Services Commission (FSC), the authority responsible for licensing and prudential oversight of non-bank financial services in Mauritius. Its administration is carried out through a management company licensed by the FSC, responsible in particular for maintaining separate accounts for each cell and for compliance with applicable regulatory obligations.

In practice

The PCC is mainly used for structures that need to house several activities or several investors whose risks must remain ring-fenced within a single vehicle: multi-compartment investment funds, or insurance structures on behalf of several policyholders, for example. Each cell may correspond to a distinct investment strategy, client, or project, avoiding the need to incorporate a separate company for each. Setting up a cell requires separate accounting and documentation clearly defining its assets; the ring-fencing between cells depends on strict compliance with these internal rules. A point of caution: the exact scope of a cell's protection vis-à-vis third parties must be verified case by case, particularly when the PCC or its cells deal with counterparties located in jurisdictions that do not necessarily recognise such ring-fencing. Resorting to a PCC should therefore be assessed case by case, with the management company, depending on the project and individual circumstances.

Related terms

The Global Business Company (GBC) is the most common international company structure in Mauritius and often serves as the basis for a PCC used within the global business framework. The Financial Services Commission (FSC) is the authority that supervises management companies and the licences applicable to PCCs active in financial services. The Variable Capital Company (VCC) is another Mauritian fund structure, with variable capital, which may in some cases meet needs similar to those of a PCC for multi-compartment funds.

Related terms