GIBRALTAR Law and Practice Contributed by: Emma Lejeune, Stuart Dalmedo, Adrian Pilcher, Nicholas Isola, Danielle Victor, James Castle, Louise Anne Turnock and Danielle Curtis, ISOLAS LLP
3. Corporate Vehicles 3.1 Most Common Forms of Legal Entity Corporate vehicles in Gibraltar may take various forms. These include trusts, foundations, limited part - nerships, protected cell limited partnerships, limited liability partnerships, companies limited by guarantee, companies limited by shares, protected cell compa - nies and unlimited companies. As each form of corporate vehicle contains its own unique set of characteristics, the most suitable vehicle for a particular use case will depend on various fac - tors, such as the nature of the underlying business activity or reasons for the establishment of the vehicle (eg, asset protection or succession planning). Companies limited by shares are by far the most com - mon form of corporate vehicle in Gibraltar. These may be set up as a private company (in which case the company’s shares or debentures are not allowed to be offered to the general public) or as a public company (in which case the company’s shares or debentures are allowed to be offered to the general public). Private Companies Private companies are required to adopt articles of association which set out the rules governing the rela - tionship between the company and its shareholders, as well as the responsibilities of its directors. Private companies must have a minimum of one director, and there is no statutory maximum number of directors. A company may, however, provide for a maximum number of directors under its articles of association. A sole director of a company is unable to also act as the secretary of that company. Private companies must have a share capital that is divided into shares of a fixed amount, and there is no minimum or maximum share capital requirement. Therefore, private companies may be set up with a single shareholder and can consist of any number of shareholders (although regard must be had to regu - latory implications of what could be construed as a collective investment scheme) without the need to register as a public company.
Due to their flexibility, the ease with which they can be set up and the limited liability offered to sharehold - ers, private companies are usually perceived to be the preferred corporate vehicle for most businesses, joint ventures and holding companies in Gibraltar. Trusts A trust is an equitable obligation binding one party, the trustee, to control and manage property for the benefit of one or more parties, the beneficiaries. A settlor will transfer property to the trustee (whether during their lifetime or under a will) on specified terms which are usually contained in a trust deed and supplemented by a non-binding letter of wishes from the settlor to the trustee. The provisions relating to the establishment and administration of a trust are contained in the docu - ment constituting the trust, known as the declara - tion of trust or trust deed. This document sets out the powers and fiduciary obligations of the trustees vis-à-vis the trust property/fund and the beneficiaries. 3.2 Incorporation Process The incorporation process of a private company requires an application form, together with payment of the applicable fee, to be submitted to Companies House. In the case of a company, the application form must include: • the proposed name of the company; • the liability of its members; • whether the company is to be private or public; • a statement of the intended registered office address and email address; • the memorandum of association and articles of association (to the extent that bespoke articles of association or the memorandum of association are to be adopted); • in the case of a company that is to be limited by shares, a statement of the authorised share capi - tal, initial shareholding and particulars of the rights attached to shares; • in the case of a company that is to be limited by guarantee, a statement of guarantee from the pro - posed members; and
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