A segregated account contains assets and liabilities that are legally separated from (i) the assets and liabilities of the company’s general account and (ii) such company’s other segregated accounts.
Registering as an SAC allows the assets of one account to be protected from the liabilities of other accounts. The statutory divisions between accounts do not create separate bodies corporate, but rather achieve within a single company what could otherwise be achieved by incorporating subsidiaries or by using complex contractual or trust structures.
As a result, the accounts will be self-dependent, whereby only the assets of a particular account may be applied to the liabilities of that account. Importantly, a segregated account does not have a separate legal personality; it cannot sue and be sued in its own name.
SACs are commonly structured so that the voting share is held by a person or entity that has the responsibility for the day to day running of the company and the account owners usually hold securities linked to a particular segregated account.
