An Act to amend the Companies Act Cap 308 to provide for the establishment of Incorporated Cell Companies was enacted by the Barbados Parliament. The Act is cited the Companies (Amendment) Act 2016-1 and was gazetted in the February 18th 2016 edition of the Official Gazette.
The ICC is a single incorporated entity consisting of a core and one or more separately incorporated cells created for the purpose of providing businesses with the flexibility to structure specific operations through placement in separate incorporated cells. This ensures that the risks and assets of each operation are legally separated from those within another incorporated cell.
Incorporated Cell Company: Some Points to Consider
- There can be an unlimited number of incorporated companies (called cells), each of which is treated as a separate legal entity. Each cell is considered to be a limited liability company and has its own governance structure with its own Board of Directors and officers;
- The structure also allows each cell to separate its assets, liabilities, shareholder agreements and other legal obligations from other cells within the ICC;
- All cells benefit from the lower costs associated with the shared administration of the ICC as a whole;
- The directors of a cell will be responsible for preparing accounts in respect of that cell, in accordance with the law. The ICC will be required to keep a separate record of members for each cell and to submit an annual return for each cell;
- Subject to compliance with the specific requirements of the law, cells of ICCs can be transferred to Segregated cells and vice versa. However, all cells of an ICC must be incorporated cells and all cells of a Segregated cell must be segregated cells. Therefore, on transfer, the cell must adopt the form applicable to the cell company to which it is transferred;
- Specific provisions should protect cellular assets from creditors’ claims. In particular, creditors with claims arising from cellular transactions are entitled to claim only against the cellular assets of that cell – if their claim does not arise from a cellular transaction, they will not be entitled to claim against cellular assets;
- In the event of the insolvency of a cell, this should not (in the absence of any special provisions in the articles of association subjecting the non-cellular assets to the liabilities of an insolvent cell) lead to the insolvency of the ICC. This results from the separate incorporation of each incorporated company.