Corporation Services Limited - professional company formation and management in the Turks & Caicos Islands Corporation Services Limited - professional company formation and management in the Turks & Caicos Islands

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TCI Guarantee Companies

Guarantee Companies have been used increasingly to achieve substantially the same objectives as offshore trusts.

Characteristics

The principal defining characteristic of a Guarantee Company is that the liability of the members is not limited to the amount unpaid on shares. This is "because companies limited by guarantee do not have a share capital". Prospective members are instead required to provide the Board of Directors with a guarantee that they will contribute a fixed (e.g. US$100.00) in the event that the "company" has debts when it is wound up.  Reporting requirements which would otherwise arise by virtue of share ownership may therefore be avoided in many instances.

The Articles of Association of TCI Guarantee Companies can be drafted to effectively separate management powers from the potential to benefit from any assets contributed. Typically a structure will provide that assets contributed by the client member(s) are managed by the Guarantee Company's Board of Directors and that the contributing/client membership is effectively the only class of membership which can "potentially" benefit at the discretion of the Board.

When properly structured a Guarantee Company creates a relationship between the management and the contributing member/client which is similar in effect to that of a trustee and a settlor.

Notwithstanding that an individual is a member of a TCI Guarantee Company, when properly structured his/her position for reporting/tax purposes will be as follows:

  • Not a shareholder

  • Not a director or officer

  • No voting rights or fixed entitlements to assets contributed

  • No tangible control over dividends, loans or payments

Uses:

The objectives which may be achieved by careful use of TCI Guarantee Companies include the following:

  • Indefinite, legitimate deferral of capital gains tax in certain circumstances;

  • Enhanced asset protection;

  • Confidentiality of membership (exempted TCI Guarantee Companies benefit from the same high level of confidentiality as standard IBC's and are almost as simple and cost-effective to maintain);

  • Avoidance of probate and estate costs.

By virtue of the above Guarantee Companies can clearly be useful as conduits for active investment enterprises and as shareholders in other structures, e.g. by structuring them as charitable foundations and utilizing them as shareholders of trustees to private family trusts.
 

Corporation Services Limited - professional company formation and management in the Turks & Caicos Islands


Contact Details:


1, Caribbean Place
Leeward Highway,
Providenciales
Turks & Caicos Islands
British West Indies

Tel: 649-946-4344
Fax: 649-946-4564

Email

 

 

 
Corporation Services Limited - professional company formation and management in the Turks & Caicos Islands

 

Why consider an exempted Guarantee company in TCI:

  • No nationality restrictions;
  • Exempted from future TCI taxation (if any) for 20 years;
  • Minimal reporting req's;
  • Enhanced privacy;
  • Not req'd to hold AGMs;
  • Rapid set-up at reasonable cost.
     
Corporation Services Limited - Turks & Caicos company formation and management
Corporation Services Limited - professional company formation and management in the Turks & Caicos Islands


CSL Group:


 

Corporation Services Limited - Turks & Caicos company formation and management

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