A company limited by shares is a Segregated Portfolio Company (SPC) with RAK ICC. For the aim of separating the assets and liabilities of the corporation held inside or on behalf of a segregated portfolio from other assets and liabilities of the company, the SPC may create up to 10 segregated portfolios. If the Registrar is certain that the company’s directors have the skills and experience required for managing segregated portfolios properly, segregated portfolios may be incorporated.
A protected cell company is another name for a Segregated Portfolio Company (or SPC). Assets representing retained earnings, share premiums, capital reserves and share capital and all other assets related to or held inside the Segregated Portfolio are included in the Segregated Portfolio.
1. Advantages of SPC with RAK ICC
• Foreign ownership of 100%
• Complete capital and profit repatriation
• Open local and international bank accounts
• Create a subsidiary in a free zone to profit from a double taxation agreement.
2. Features of SPC with RAK ICC
A RAK ICC in Ras al Khaimah segregated portfolio company (SPC) has the following features:
• Independent legal personality: It has a separate legal identity from its stockholders.
• Limited liability of shareholders: Each shareholder’s liability is capped at the amount of share capital they have agreed to contribute to the business.
• Ten or more segregated portfolios: It has the ability to construct ten or more separated portfolios. The assets kept in each of these segregated portfolios are protected from the company’s or other segregated portfolios’ general liabilities. Shares may, but are not need to, be issued by each portfolio.
• Independently kept register of members: There is no limit number of shareholders; the Registrar maintains its register of members, which is the official statement of the company’s shareholders and, if applicable, their portfolios.
• Flexible approach to the Memorandum and Articles: Although RAK ICC has offered a template for the Memorandum and Articles of Association, this form is not required. The Memorandum and Articles of Association may specify more than one class of shares in a RAK ICC segregated shares portfolio company, each with certain rights.
• Privacy: Typically, only the company’s directors, shareholders, or registered agent are permitted to access the Registrar’s records.
• Purpose restrictions: RAK ICC firms have limitless corporate capacity, with the exception that they typically aren’t allowed to do financial services enterprises or conduct business within the United Arab Emirates, unless they specifically choose to do so in their Memorandum and Articles.
• Strict anti-money laundering regulations: Registered agents must abide by the pertinent anti-money laundering laws of the UAE. In a Registrar’s Guide, the breadth of these obligations is made clear.
• Directors: It is permitted to have corporate directors, provided that at least one of them is a natural person.
• Registered agent: It must have a registered agent at all times. Although it is possible, the Business Companies Regulations do not mandate or recognise the position of company secretary.
3. Separation of liability
Liabilities deriving from a matter attributable to a certain Segregated Portfolio may only be met by assets relevant to that Segregated Portfolio; only the assets of each Segregated Portfolio are accessible to fulfil liabilities to creditors in respect of that Segregated Portfolio. A creditor may have recourse to the general assets of the SPC under the rules of some jurisdictions, but not to the assets that are a part of another Segregated Portfolio, if the assets of a Segregated Portfolio are insufficient to meet that portfolio’s obligations. The Segregated Portfolio within an SPC is not technically a separate legal entity from the SPC, despite the fact that they are treated as such for insolvency purposes. An SPC is technically a single legal entity.
4. Incorporation or registration as segregated portfolio company
A company limited by shares (CLS) could, with the written authorization of the Registrar
(a) Establish as a segregated portfolio company (SPC); either
(b) Be registered agent as a segregated portfolio company by the Registrar if it has previously been incorporated (SPC).
5. Application for approval of the Registrar
(1) The Registrar must receive requests to establish or register businesses as segregated portfolio companies (SPCs) in the approved form and with the appropriate supporting documentation.
(2) The Registrar may request further paperwork and information from an approval incorporated company applying under paragraph (1) as it deems essential to process the application.
6. Registrar may approve application
1. The Registrar may approve the company registration of a company as a segregated portfolio company (SPC) under such conditions as it considers appropriate upon receipt of an application under Regulation of the registration approval if it is pleased that the company has, or has at its disposal, the knowledge and expertise necessary for the proper management of segregated portfolios.
The Registrar with RAK ICC could, at any time
(a) Change or revoke any condition for which an authorization was granted under paragraph (1); and
(b) Place any restrictions on any such authorization.
7. Segregated portfolios with RAK
1. A segregated portfolio company with RAK ICC may establish one or more segregated portfolios to separate the company’s assets and liabilities held within or on behalf of a segregated portfolio from the company’s assets and liabilities held within or on behalf of any other segregated portfolio of the company (SPC) or the company’s assets and liabilities which are not held within or on behalf of any segregated portfolio of the comp At no time may a segregated portfolio company (SPC) have more than 10 active segregated portfolios.
2. A segregated portfolio company (SPC) is a single legal entity. A segregated portfolio with RAK within or of a segregated portfolio company (SPC) does not represent a separate legal entity from the company.
3. Each segregated portfolio must be identified or designated separately and include the words “Segregated Portfolio” in the identification or designation.
4. A segregated portfolio company (SPC) is not permitted to create a segregated portfolio without first receiving the Registrar’s prior written consent.
5. A segregated portfolio company (SPC) that violates paragraph (4) is in violation of these regulations and liable for a fine no higher than level 3.
6. Any restrictions on the type of business that a segregated portfolio company (SPC) may engage in that are stated in the SPC’s memorandum are applicable to each of the company’s segregated portfolios.
8. Termination and reinstatement of segregated portfolios
1. A segregated portfolio may be terminated by the segregated portfolio company (SPC) if there are no segregated portfolio assets or liabilities that can be attributed to it.
2. A segregated portfolio company must notify the Registrar in writing of the termination of the segregated portfolio within seven days of the segregated portfolio being terminated pursuant to subsection (1).
3. With the Registrar’s prior written consent, a segregated portfolio company (SPC) may restore a segregated portfolio that has been terminated in accordance with subsection (1).
4. A segregated portfolio company (SPC) is in violation of these regulations if it violates subsections (2) or (3) and is subject to a fine not exceeding level 3.
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