Exploring the Suitability of the Protected Cell Company Structure for Shipping Business: A Call for Further Discussion and Research

This chapter examines the use of protected cell company (PCC) structure in the maritime industry. The study provides an overview of the origins and general characteristics of PCCs, which are a type of corporate structure that allows a business to create separate cells or “protected cells” within the company, each of which is treated as a separate legal entity for the purposes of liability. The research then explores the potential applications of the PCC in the maritime sector, specifically how it can be used to substitute the traditional single-ship company corporate structure, the current corporate landscape of ship-owning, and its implications for ship-owners and crew management companies. Additionally, an in-depth analysis of the Shipping and Aviation Business Cell Company Regulations, which were introduced under Maltese Law in 2020, is provided. The analysis covers the definition of shipping business, the formalities required for the creation of a cell company, the obligation to inform third parties, the separation of assets and liabilities, the creation of cells, and the liquidation process. The study also highlights the limitations of PCCs in the maritime industry, including the potential challenges of cross-jurisdictional recognition and the risk of sister-ship arrest, as well as the incompatibility of the structure with the tonnage tax flag link requirements. The chapter concludes by providing recommendations for the implementation of PCCs in the maritime industry and suggesting areas for further research.