The Gibraltar Companies Act is based on the English Companies Act 1929 but it has, over the years, been amended and updated to suit Gibraltar’s needs. The current Act was passed in 2014 after recommendations made by a company law reform committee which was chaired by our Managing Director, Marc X. Ellul.

The English common law and principles of equity apply in Gibraltar and these, therefore, have a bearing on many aspects of Gibraltar company law.

Under the Protected Cell Companies Act 2001 (“PCCAct”) one company may segregate its assets and liabilities in different cells. These are known as a protected cell companies (“PCCs” or “PCC”). A PCC remains a single legal entity and the liability of the company inrespect of each cell is limited to the assets attributable to the relevant cell, not for the debts of any other cell.

Many Experienced Investor Funds are set up as PCCs as they can, for example, allow sub-funds to pursue different investment strategies and allow sub funds to be created for different clients.  

The PCC Act states that a protected cell company is a single legal person and that the creation by a PCC of a cell does not create, in respect of that cell, a legal person separate from the company.

It is the duty of the directors of a PCC to keep the assets of each cell separately identifiable. Specifically, they must (a) keep cellular assets separate and separately identifiable from non-cellular assets and (b) keep cellular assets attributable to each cell separate and separately identifiable from cellular assets attributable to other cells.

APCC may create and issue cell shares in respect of any of its cells. The proceeds of the issue are comprised in the cellular assets attributable to the cell in respect of which the cell shares are issued. A PCC may pay acellular dividend.

The rights of creditors are limited to the assets of the cell of which they are creditors.  In the winding up of a PCC, the assets forming part of the estate shall only be the non-cellular assets. The winding up shall not terminate any agency, or in any way whatsoever affect the authority or power of any officer, receiver, administrator, servant or agent of the PCC in respect of the cellular assets.

Any liquidator of a PCC has a duty to keep cellular assets separate and separately identifiable from non-cellular assets. The liquidator must also keep cellular assets attributable to each cell separate and separately identifiable from those assets attributable to other cells.

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These are a special form of company usually used by not-for-profit organisations. They have members rather than shares. The members have a series of rights, such as use of common property, but are not entitled to any dividends or to receive any profits from the company.

They are most commonly used in Gibraltar to manage large privately owned housing estates and private buildings whose common areas are jointly owned by several owners. Our firm represents many such companies.