The Companies Act of 1995 establishes the foundation upon which company law, as derived from English Company Law, is built. Shipping companies are governed by the Merchant Shipping Act.
Types of Companies
Limited Liability Company
The limited liability company can be either private (denominated by Limited or Ltd.) or public (denominated by plc.). The minimum number of shareholders or subscribers for private and public companies is 2, however a private limited liability company may also be incorporated as single-member company provided that the position of director is not occupied by a corporate entity and provided that the objects clause is restricted to one main activity.
The limited liability company is the preferred commercial vehicle as is creates a separate legal personality with limited liability.
Partnerships
Maltese Company Law also provides for the possibility of creating a partnership. A “Partnership en commandite” is a partnership with at least one unlimited partner and other limited partners, whilst the “Partnership en nom Collectif” is an unlimited partnership where all partners have unlimited liability.
Capital
The minimum authorised and issued share capital under Maltese law is as follows:
- €1,165 with at least 20% paid-up upon subscription for private companies
- €46,588 with at least 25% paid-up upon subscription for public companies
Currency
A company’s share capital may be denominated in any currency and the company’s income tax is paid in the same currency of the share capital. Likewise, any tax refunds are also given in the same currency.
Registration
Registration of a company is done through the Registry of Companies by submitting all documentation, including the Memorandum & Articles of Association (M&A), together with an identification document of the subscribers, and proof that the initial share capital has been paid up. The Memorandum & Articles of Association need to be signed by the subscribers or their attorneys, however they do not need to be notarised. Shares in Maltese companies may be held by licensed trustees in a fiduciary capacity for and on behalf the subscribers.
Upon submitting all documentation to the Registry of Companies, registration is effected within 24 hours.
Companies must appoint at least one director and one company secretary. A corporate entity can act as a director, however a company secretary must be a natural person. Moreover, a sole director cannot act as the company secretary as well unless the company is a single-member company.
General meetings need not be held in Malta and may be held via telephone or video conference. A company may also opt out from holding general meetings should the shareholders, unanimously, agree and sign a resolution to the same effect.
Companies must submit an annual return upon each anniversary of the company’s registration date. After the financial year ends, audited financial statements must be brought before, and approved, by the general meeting of the company and eventually submitted to the Registry of Companies. Audited financial statements must be prepared in accordance with the companies Act whilst small companies are allowed to submit abridged accounts.
Companies moving their domicile to Malta must arrive from a jurisdiction which allows redomiciliation. This possibility enables companies to move freely from one jurisdiction to another without the need of entering a liquidation process.
