Introduction
A Protected Cell Company (PCC) is a special corporate structure recognised under Rwanda’s Law n° 007/2021 of 05/02/2021 governing companies (Companies Law). Article 2 of this law defines it as a company in which a single legal entity consists of a core linked to several cells, each with separate assets and liabilities.
It, in essence, allows a single company to operate multiple distinct units known as cells, each with legally segregated assets and liabilities. It is primarily used in financial services, insurance, and investment sectors.
Legal Framework in Rwanda
Under the Companies Law, a PCC is established as a single legal entity consisting of a core and multiple protected cells. Although the cells are not separate legal persons, the law provides strict segregation of their assets and liabilities. The company name must include the term ‘Protected Cell Company’ or ‘PCC’, and its formation is subject to compliance with regulatory requirements.
A protected cell company must file articles of association with the Registrar General.
The memorandum of a protected cell company must state that it is a protected cell company.
Subject to the provisions of the Companies Law on the constitution of a company, a protected cell company is constituted or registered when: 1º a company may be incorporated as a protected cell company; 2º a company registered in a jurisdiction other than Rwanda may be registered by way of continuation as a protected cell company in Rwanda; 3º an existing company may, if it is authorised by its memorandum and articles of association, be converted into a protected cell company.
A PCC must, notwithstanding that it may create one or more cells, be a single legal person and the creation by a protected cell company of a cell does not create, in respect of that cell, a legal person separate from the protected cell company.
A foreign PCC which satisfies requirements for registration of a PCC may continue as a PCC in Rwanda after being so registered.
Structure of a Protected Cell Company
A PCC comprises two main components: the core and the cells. The core contains non-cellular assets and is responsible for the company’s general obligations. The cells, on the other hand, operate independently for specific purposes. Each cell may have its own shareholders, investments, and business activities, but remains part of the single corporate entity.
Key Features
One of the key features of a PCC is the segregation of assets and liabilities. Assets of one cell cannot be used to satisfy liabilities of another cell or the core. This legal separation ensures that risks are contained within individual cells. Additionally, PCCs offer flexibility, as new cells can be created without forming new companies.
Roles of Protected Cell Companies
Protected cell companies have several roles: enhance risk management by isolating liabilities, making them attractive to investors and creditors; reduce operational costs since multiple business lines can operate under one legal entity; promote innovation in financial services by enabling diverse investment structures within a single company
Advantages
The advantages of PCCs include risk isolation, cost efficiency, flexibility in operations, and protection of investors. These features make PCCs particularly suitable for insurance businesses, collective investment schemes, and asset management companies.
Conclusion
In conclusion, protected cell companies represent a modern and flexible corporate structure under Rwanda’s Companies Law. By allowing multiple segregated cells within one legal entity, PCCs provide strong risk protection, operational efficiency, and investment flexibility.
How Adili Rwanda can assist
Adili Rwanda can play a key supporting role in the establishment and successful operation of a Protected Cell Company by providing comprehensive legal and corporate advisory services. This includes guiding clients through the regulatory framework, preparing and filing incorporation documents with the Registrar General, advising on the structuring of the core and individual cells, and ensuring ongoing compliance with applicable laws and regulations. With its local expertise and experience in corporate structuring, Adili Rwanda is well-positioned to facilitate a smooth and efficient registration process for both local and foreign investors seeking to establish a PCC in Rwanda.
