Company Law
Overview
The promoters of a company may incorporate a company by submitting to the Registrar of Companies a Memorandum of Association in which the name, address, the authorised, issued and paid up share capital of the company, as well as its subscribers, directors and company secretary are specified. This should normally be accompanied by the Articles of Association in which any desired detailed provisions regulating the company and its operations are laid down. The minimum authorised and issued share capital of a company is the equivalent of €1200 in any recognized currency, of which not less than 20% must be paid up. Of course, other legislation, such as banking law, may impose higher and further requirements. If the value of a share is not paid up in money, certain procedures specified at Law, shall apply to ensure that the company does receive an equivalent value. The liability of shareholders is limited to the unpaid amount on their shares. A company must have at least one director, as well as a company secretary appointed by the board of directors. The latter is responsible for a company's compliance with the various formalities required by law, amongst other things the due calling of meetings and the submission of returns to the Registrar of Companies.
Technically, Maltese law provides only for two types of corporate vehicles or companies; the public company and the private company. In practice, however, various other kinds of companies are distinguished, as different rights and/or obligations are applied to companies dependent on certain relevant circumstances. Such different rights and obligations do not always follow from the Companies Act and often emanate from other provisions of law. Of relevance amongst the types and kinds of companies distinguishable in Malta are the following: private and public limited liability companies; private and public collective investment companies with fixed or variable capital, and overseas companies. These different types of companies are separate legal persons or entities whose corporate affairs are mostly regulated by the Companies Act 1995, which is inspired by English company law and is largely harmonised with EU legislation relating to company law.
Maltese private and public companies
Normal private companies are companies whose number of shareholders are by law limited to fifty, and whose shareholders have their liability limited to the unpaid amount on their shares, if any. Furthermore, the transfer of the shares in the company is limited by way of a clause in the memorandum and articles of association. Public companies differ from private companies in that the shares can be offered to the public, and the number of shareholders is not limited by law. Public companies are subject to stricter legal requirements than private companies in respect of the publication of the accounts of the company besides having other obligations. Also, public companies must publish a prospectus in the event of a public issue of capital, and in doing so must comply with the relevant requirements.
Overseas companies
Companies incorporated outside Malta are subject to Maltese company law if such companies establish a place of business in Malta. In that event, overseas companies must be registered in Malta within a month, and furthermore are obliged to register any changes in the registered data as well as the annual financial accounts. In respect of certain business activities, requirements exceeding those of company law may be imposed pursuant to other laws. It would be possible to set up a branch of a bank in Malta if the foreign bank would register as an overseas company.
Mifsud & Mifsud Advocates is actively involved in providing company law advice and related services to its local and international clients in different economic sectors. For further information on Company law please contact us.
