Types of Companies in RAK ICC
  • January 09, 2024

Types of Companies in RAK ICC

RAK International Corporate Centre (RAK ICC) is a rapidly growing global corporate registry known for its compliance and professional services. Its focus is on registering International Business Companies (IBCs), providing a comprehensive suite of off-shore registry services. It also offers diverse on-shore, and free zone structuring solutions.

1. Company Limited by Share

A Company Limited by Shares (CLS) signifies that shareholders are only liable to the company's creditors up to the amount of capital they initially invested. This form of company must always have at least one shareholder and one director. It has the flexibility to issue bonus shares, partly paid shares, or nil paid shares. These share certificates must be signed by at least one director of the company.

The main features include limited risk for shareholders, the ability to issue different types of shares, and the option for multiple people to own shares together. There are also extra features like having no set limits, having a specific purpose, and keeping assets separate from risks. A CLS is like a versatile business tool that can be used for things like global business, owning other companies, handling specific projects, and more, offering a straightforward and flexible way to manage things.

2. Company Limited by Guarantee

You can create a Corporation Limited by Guarantee (CLG) with RAK ICC, and its name can include "Limited," "Incorporated," or the short forms "Ltd" or "Inc." In this setup, people who guarantee to support the company promise to give a small amount if the company closes down. These guarantors are only responsible for the specific amount mentioned in the company's rules (memorandum and articles of incorporation), along with any other mentioned responsibilities. If someone used to be a guarantor, they might need to give money to help with the company's debts and responsibilities, including closing down expenses. 

3. Restricted Purpose Company

A special kind of company made for specific reasons is called a Restricted Purposes Company (RPC). If a company limited by shares is called an RPC, it means its paperwork, like the memorandum, clearly says what it's meant to do and that it's a restricted-purpose company. An RPC is focused on doing one important thing, making people feel more secure because it can't do anything that goes against its declared goals. The company, the people who own shares, and the directors must follow the rules and limits written in its paperwork. Importantly, a company can't become an RPC later if it wasn't set up that way from the beginning.

4. Segregated Portfolio Company

A Segregated Portfolio Company (SPC), also known as a protected cell company, is a type of corporation limited by shares. It has the ability to create up to 10 segregated portfolios to separate the assets and liabilities held within each portfolio from those of the overall company. The registrar may allow the incorporation of segregated portfolios if the directors demonstrate the necessary skills. The assets within these portfolios represent share capital, retained earnings, capital reserves, share premiums, and other attributable assets.

The benefits of an SPC include profit repatriation, 100% foreign ownership, the ability to open domestic and international bank accounts, and the option to establish a subsidiary in a free zone with double taxation treaty benefits.

Key features encompass a distinct legal personality, limited liability for shareholders, up to ten segregated portfolios, an independently kept register of members, flexibility in the Memorandum and Articles, privacy in accessing registrar records, purpose restrictions, adherence to strict anti-money laundering regulations, the option for corporate directors, and the requirement for a registered agent at all times.

5. Unlimited Company

An Unlimited Company (UC) is a legal entity with the authority to own assets, and its members or shareholders bear unlimited joint and several liability for any deficit in the company's assets. This unique corporate structure combines features of both limited and unlimited liability, as the members are jointly and severally liable for any shortfall in assets only after the formal liquidation of the company. This liability extends to the company's assets and outstanding debts, with creditors or security holders having recourse prior to official liquidation. Notably, this liability applies exclusively to the company's assets and does not extend to the assets of its shareholders or members.

Unlimited Companies possess the advantages of unlimited capacity, allowing diverse applications with either limitless or finite purposes. In the context of RAK ICC, these entities offer adaptability and straightforward administrative processes, making them versatile tools for various purposes. UCs can facilitate credit without requiring shareholder guarantees, making them suitable for specific scenarios, such as when a UC has a single user. Additionally, the UC can serve as a vehicle for international tax planning, providing further utility and flexibility.

As pioneers in IBC formation services, RAK ICC continuously evolves its products to meet customer needs.

How can Ascent Partners help?

Ascent Partners is a boutique consultancy providing bespoke, end-to-end corporate services ranging from company formation to accounting, bookkeeping, and compliance services for entrepreneurs looking to set up their next venture in the UAE. We work alongside to strategise, startup, and scale businesses in the UAE and the broader region.

With a combined experience of 50+ years, our expert consultants provide reliable and unparalleled guidance throughout all strategic phases of a business' evolution.

To know more, get in touch with us at ask@ascentpartners.ae or at 04 422 7339.