Hybrid Companies

Hybrid companies are simply a combination of a company limited by shares and by guarantee. Thus, there will be two types of members: those who are shareholders and those who are guarantors and their liabilities will be limited as per their type, liabilities which have been duly described in the Companies Act 2001.

In some jurisdictions, Hybrid Companies are referred to as being “Quasi-trusts”; this is because in some civil law countries, the existence and management of Trusts is not legally recognised and provided for, and this is what makes Hybrid Companies/Quasi-trusts so popular. This structure also allows the shareholders to act like “trustees” so as to ensure that all the benefits are reaped by the guarantors, who will be acting like “beneficiaries” under a conventional trust structure.

Hybrid Companies can also be incorporated as a GBC1 or a GBC2 and they can enjoy their benefits under these two types respectively. Moreover, Hybrid Companies can either benefit from a tax waive or pay a low rate because of its mixed structure, while still benefitting from the DTAA Network, except if they have been set up as a GBC2.