A protected cell company (PCC) is a fairly new corporate form; the concept originated in Guernsey in 1997. Since then, protected cell companies have become available in a greater number of offshore jurisdictions.
In Seychelles, Protected Cell Companies (PCC) are formed under the Protected Cell Companies Act, 2003. A PCC is a Seychelles domestic company that has the right to create one or more identifiable cells so as to segregate and protect cellular assets as permitted under the Act. In simple terms, a PCC is a company which -- in addition to its main, "core" level -- contains a number of segregated parts, or "cells". Each cell is legally independent and separate from the others, as well as from the "core" of the company.
The undertakings of one cell have no bearing on the other cells. Each cell is identified by a unique name, and the assets, liabilities and activities of each cell are ring-fenced from the others. If one cell becomes insolvent, creditors only have recourse to the assets of that particular cell and not to any other.
Protected cell companies are a welcome arrival for businesses that would have previously chosen a rent-a-captive scheme over the (more costly) formation of an in-house captive insurance company for the purpose of self-insurance.
Protected cell companies are used to securitize insurance risk against catastrophic losses, for example; their very structure also makes them an ideal entity for the cost-effective operation of umbrella mutual funds.