XIII tal-2007 - Att li jemenda l-Kodiċi Ċivili (Emenda Nru. 2)

Taqsim ta’ l-artikoli

Titolu fil-qosor u bidu fis-se]].

|ieda ta’ intestatura [dida u artikolu 1A [did fil-Kodi`i.

Emendi o]ra g]all-Kodi`i.

|ieda ta’ skeda [dida fil-Kodi`i.

Emendi g]all-Att dwar il-Professjoni Nutarili u l-Arkivji

Nutarili.

Emendi g]all-Att dwar it-Taxxa fuq l-Income.

Emendi g]all-Att dwar l-Interpretazzjoni.

Emendi g]all-Att dwar it-Taxxa fuq Dokumenti u Trasferimenti.

Emendi g]all-Att dwar Trusts u Trustees.

Emenda tat-Tieni Skeda ta’ l-Ordinanza dwar ir-Regolament tat-

Traffiku.

SKEDA

IT-TIENI SKEDA

Artikoli

FUQ ORGANIZZAZZJONIJIET {URIDI~I

Sub-Titolu I

Disposizzjonijiet preliminari u Tifsiriet

Sub-Titolu II

Fuq Organizzazzjonijiet Barranin u Internazzjonali

FUQ IL-PERSONALITÀ {URIDIKA

Sub-Titolu I

Fuq Persuni {uridi`i

3 - 6

Sub-Titolu II

Fuq l-Amministraturi

7 - 10

Sub-Titolu III

Fuq ir-Re[istratur

Sub-Titolu IV

Fuq ir-Re[istrazzjoni ta’ Organizzazzjonijiet

Sub-Titolu V

Fuq Organizzazzjonijiet mhux re[istrati

13 - 15

Sub-Titolu VI

Fuq ir-Responsabbiltà ta’ Persuni involuti

f’Organizzazzjonijiet

16 - 18

Sub-Titolu VII Fuq ir-Responsabbiltà ta’ Organizzazzjonijiet

Sub-Titolu VIII Mixellanji

20 - 25

Titolu III

FUQ FONDAZZJONIJIET U ASSO~JAZZJONIJIET

Sub-Titolu I

Disposizzjonijiet preliminari u Tifsiriet

26 - 28

Sub-Titolu II

Fuq Fondazzjonijiet

29 - 47

Sub-Titolu III Fuq Asso`jazzjonijiet

48 - 56

Titolu IV

FUQ L-ISTRAL~ TA’ ORGANIZZAZZJONIJIET

57 - 67

Nag]ti l-kunsens tieg]i.

E DWARD F ENECH A DAMI

(L.S.)

President

24 ta’ Lulju, 2007

ATT Nru XIII ta’ l-2007

ATT biex ikompli jemenda l-Kodi`i ~ivili, Kap. 16.

IL-PRESIDENT bil-parir u l-kunsens tal-Kamra tad-Deputati,

imlaqqg]a f’dan il-Parlament, u bl-awtorità ta’ l-istess, ]are[ b’li[i

dan li [ej:-

(1) The short title of this Act is the Civil Code

(Amendment) (No. 2) Act, 2007, and this Act shall be read and

construed as one with the Civil Code, hereinafter referred to as "the

Code".

(2) This Act shall come into force on such date as the Minister

responsible for justice may by notice in the Gazette appoint, and

different dates may be so appointed for different purposes and for

different provisions of this Act.

Immediately after article 1 of the Code and after the

heading "BOOK FIRST - OF PERSONS" there shall be added the

following new heading and new article

"PRELIMINARY

1A. (1) Persons may either be natural

Persons.

persons or legal persons.

(2) When used in any law the term

"person" shall include both natural persons as

well as legal persons, unless the context

otherwise requires.

(3) Natural persons are regulated by Title

I to Title VIII of Book First of this Code.

(4) Legal persons are regulated by the

Second Schedule to this Code.

(5) Legal persons enjoy all rights and

powers pertaining to natural persons except

those excluded by their very nature, by their

constitutive act or by an express provision of

law.".

Wherever the word ''legitim'' appears in the articles of the General

Code, it shall be substituted by the words ''reserved portion''; and amendments

the Code.

wherever the word ''legitimary'' appears in the articles of the Code, it

shall be substituted by the words ''the person entitled to the reserved

Article 380 of the Code shall be amended as follows

Amendment of

article 380 of

the Code.

(a)

the present article shall be renumbered as subarticle

(1) of the said article; and

(b) immediately after subarticle (1), as renumbered,

thereof there shall be added the following new subarticle

''(2) When a right of usufruct is settled under

trusts in favour of a trustee, including a corporate trustee,

or is endowed to a private foundation for the benefit of

beneficiaries who are natural persons, for the purposes of

this article, the usufruct shall be considered as being

constituted in favour of the beneficiaries who are named

and who have a right to enjoy the property and, unless

expressly stated otherwise, shall operate for the lifetime of

such beneficiaries.''.

Immediately after subarticle (2) of article 761 of the Code Amendment of

article 761 of

there shall be added the following new subarticle

the Code.

"(3) Subarticle (1) shall not apply to dispositions in

favour of persons called to benefit under a trust or a

foundation."

In article 922 of the Code, after the words "paying his

debts" there shall be added the words "or a benefit under a foundation

Article 958B of the Code shall be amended as follows

(a)

paragraph (a) of subarticle (9) shall be substituted by

the following new paragraph

"(a) a person claiming the reserved portion from a

trustee, the heirs or any other person, in relation to

property settled in trust, shall lose any benefit under the

trust";

(b)

subarticle (11) shall be amended as follows

(i) paragraph (a) thereof shall substituted by the

following new paragraph

"(a)

the beneficiary shall not be entitled to

demand the reduction of the trust settled in his favour

and claim the reserved portion from the trustee or

from the heirs or any other person except that if the

property settled in trust is not equal to or more than

the reserved portion, such person may request

against any person other than the trustee that the sum

due to him by way of reserved portion be placed

under the trust settled in his favour; and"; and

(ii) for the word "settlor." in paragraph (b)

thereof, there shall be substituted the words "settlor; and"

and the following new paragraph shall be added

immediately thereafter

"(c)

the trustee shall be deemed to have the

power and legal interest to pursue any claim for the

reserved portion due to the beneficiary against any

other person and to receive any sum due into the trust

established for the purposes of this subarticle."; and

(c)

the following new subarticle shall be added after

subarticle (13)

"(14) The settlement and holding of property under trusts

shall not be considered to be in breach of the mandatory

provisions of law relating to the reserved portion of any person

if the trust is to hold property

(a) temporarily and unconditionally for a person

entitled thereto under fixed trusts; or

(b) until a calculation is made to establish the

reserved portion and thereafter to hold the same under

fixed trust for or to distribute the said reserved portion to

the person entitled thereto; or

(c) for a person who suffers from a mental or

physical disability in terms of subarticle (11).".

Immediately after subarticle (3) of article 1696 of the Code Amendment of

article 1696 of

there shall be added the following new subarticle (4)

the Code

relating.

"(4) When the creditor is a foundation or a trustee, it

shall however be lawful for the parties to the contract to

establish the terms for redemption of any annuity governed by

Title XI of Book Second of this Code, including the fixing of

the rate of redemption, the period before which it may not be

redeemed, at whose option it may be redeemed and similar

matters and may even prohibit such redemption by express

terms.".

Immediately after subarticle (2) of article 1698 of the Code Amendment of

article 1698 of

there shall be added the following new paragraph

the Code.

"Furthermore, but subject to any contrary agreement pursuant to

the provisions of article 1696(4), the same rule shall apply if the

annuity has been constituted for the benefit of a social purpose

foundation or of a charitable trust.".

Immediately after article 1740A of the Code there shall be Addition of new

article to the

added the following new article

Code.

1740B. Any gratuitous transfer made

"Gratuitous

transfer

without animus donandi on the part of the

made

without

transferor to the transferee, including -

animus

donandi.

(a)

any settlement of property

under trusts, or

(b) any gratuitous assignment,

transfer or contribution of capital or assets

by a parent undertaking to its subsidiary

undertaking, the consideration of which

being the investment in or the funding of a

subsidiary undertaking or the corporate or

commercial benefit of a group of

companies of which the said parent

undertaking

and

the

subsidiary

undertaking form part

Provided that such assignment,

transfer or contribution shall on the pain of

nullity be expressed in writing; for the

purpose of this paragraph, "subsidiary

undertaking" shall be deemed to include

any

subsidiary

undertaking

or

undertakings of a subsidiary undertaking;

or

(c)

any transfer or assignment of

property by way of security for the

performance of an obligation,

shall not be governed by the provisions of this

Title and in particular shall not be subject to the

formalities required by article 1753.".

Article 1785 of the Code shall be substituted by the

following new article

"1785. A donation can only be revoked in virtue of a resolutive

condition, express or implied, according to the provisions of articles

1066, 1067, 1068 and 1069, or for ingratitude or, in case of

endowments to organisations established in accordance with the

Second Schedule, in virtue of the provisions regulating the revocation

of foundations and of endowments made to an organisation.".

In article 2095D of the Code for the words "relating to

trusts." there shall be substituted the words "relating to trusts unless

the trust instrument (or any written agreement entered into by the

trustee) expressly states that a particular annuity shall be governed by

the provisions of the said Title.".

(1) The Schedule to the Code shall be retitled as the

"First Schedule" and all references to the said Schedule in any

provision of the Code or in any other law shall be amended

accordingly.

(2) Immediately after the First Schedule, as retitled, there shall

be added the "Second Schedule" which appears in the Schedule to this

The Notarial Profession and Notarial Archives Act shall be Amendment to

the Notarial

amended as follows

Profession and

Notarial

Archives Act.

(a)

article 50 shall be amended as follows

(i) in paragraph (l) of subarticle (1), for the

words "as defined in the said Act." there shall be

substituted the words "as defined in the said Act;" and

immediately thereafter there shall be added the following

new paragraph

"(m) any act whereby a private foundation is

established."; and

(b) immediately after subarticle (8), there shall be added

the following new subarticle (9)

"(9) In the case of a deed creating a private

foundation, the note shall only contain the date and nature

of the act and the designation of the founder in accordance

with article 28(1)(c)

Provided that the Notary shall have no

obligation and shall not register such note if the founder

has exempted him from so doing in the deed establishing

the foundation and the administrator is a person who is

authorised or not required to be authorised to act as an

administrator for a private foundation in terms of article 43

of the Trusts and Trustees Act.";

(c)

immediately after article 68A, there shall be added

the following new article

"68B. The provisions of article 68A shall

"Notarial

deed creating

apply mutatis mutandis to a notarial deed

a private

foundation.

creating a private foundation."; and

(d) immediately after article 84A, there shall be added

the following new article

"84B. The provisions of article 84A shall

"Notarial

deed creating

apply mutatis mutandis to a notarial deed

a private

foundation.

creating a private foundation.".

Immediately after article 27D of the Income Tax Act there

shall be added the following new articles

The Minister may make regulations

"Regulations

in relation to

in relation to the tax treatment of a foundation,

tax treatment

of a

including the application of the provisions of

foundation.

this Act relating to trusts, settlors and

beneficiaries of trusts to foundations, their

founders and beneficiaries thereunder, as well

as to any persons who are donors of property to

foundations, and generally for the better

application of this Act to foundations.

The Minister may make regulations

Regulations

in relation to

in relation to the tax treatment of any

the

conversion

conversion of a legal person into another legal

of a legal

person into

form or into a trust as is referred to in article 21

another legal

of the Second Schedule to the Civil Code.".

form.

16. Paragraph (d) of article 4 of the Interpretation Act shall be

substituted by the following new paragraph

"(d) the expression "person" shall include a body or other

association of persons whether granted legal personality, in

accordance with the provisions of the Second Schedule to the

Civil Code, or not.".

17. Immediately after article 32B of the Duty on Documents

and Transfers Act there shall be added the following new articles

(1) The administrators of a

"Found-

ations

foundation may elect that the foundation be

treated as

trusts.

treated as a trust in so far as relates to

transactions of the same type as those referred

to in article 32B between the founder and the

foundation and between the foundation and any

beneficiaries. In such case the provisions of this

Act relating to trusts shall apply to foundations

mutatis mutandis.

(2) The Minister may make regulations

generally for the carrying out of the provisions

of this article including the application of the

provisions of this Act relating to trusts to a

foundation as aforesaid as well as to any

persons who are donors of property to such

foundation or are beneficiaries under or

administrators of such foundation.

The Minister may make regulations

Regulations

in relation

in relation to the application of this Act to any

to transfers.

transfers required for or incidental to any

conversion of a legal person of one form into

another legal form or into a trust as is referred to

in article 21 of the Second Schedule to the Civil

Code.".

18. The Trusts and Trustees Act shall be amended as follows

Amendment of

the Trusts and

Trustees Act.

(a)

in subarticle (1) of article 2 thereof, for the

definition of ''charitable purpose'' there shall be substituted the

following new definition

'' ''charitable purpose'' means any charitable or

philanthropic purpose, and without prejudice to the

generality of the aforesaid, includes in particular

(a) the

advancement

of

education,

including physical education and sports;

(b)

the advancement of religion;

(c)

the advancement of health;

(d)

social and community advancement;

(e) the advancement of culture, arts and

national heritage;

(f) the advancement of environmental

protection and improvement, including the

protection of animals;

(g) the promotion of human rights, conflict

resolution, democracy and reconciliation;

(h) the promotion or protection of the

interests of other social purpose organisations,

including federations of such organisations; or

(i) any other purpose as may be prescribed

by the Minister by means of regulations made by

virtue of this Act;

but does not include a political purpose. For the purposes

of this definition ''political purpose'' means the promotion

of the interests of a political party or a political candidate,

whether at local, national or international level, or to seek

or oppose changes in the law or governmental policy or

decisions except when such law or government policies or

decisions directly concern the achievement of charitable

purposes;'';

(b) subarticle (15) of article 9 thereof shall be

substituted by the following new subarticle

''(15) (a) The provisions of this article shall

apply to dispositions in wills in favour of trustees whether

appointed inter vivos or by testamentary disposition

notwithstanding the provisions of articles 688, 693 and 695

and other provisions of the Civil Code.

(b) A disposition in a will in favour of -

(i)

a named trust, or

(ii) the trustee of a named trust, or

(iii) a named trustee or in his stead the

pro tempore trustee in relation to a named

trust,

whether created inter vivos or by means of a will, shall be

valid whether the trustee is in office or yet to be appointed

in accordance with the terms of a trust.

(c) Any disposition in a will shall be valid

even if, at the time of the opening of succession -

(i) the named trustee is no longer the

trustee of the trust indicated in the will; or

(ii) there is no trustee in office,

and any such disposition shall be construed as referring to

the trustee pro tempore of the trust indicated in the will.

(d) Without prejudice to the right of a

trustee to accept an inheritance with the benefit of

inventory, a trustee may not renounce to a benefit under a

will pursuant to a disposition in his favour as trustee or in

favour of the trust except with the consent of all the

beneficiaries or the Court.

(e) The refusal to accept to act as a trustee

under a trust or the resignation of a trustee from office

shall not in any way affect the operation of a testamentary

disposition in favour of a trust and, in such case, the

provisions of articles 19 and 20 shall apply.''; and

(c)

immediately after subarticle (3) of article 19 thereof

there shall be added the following new subarticle

''(4) In the case of a trust created in a will, when

the trustee does not act either in terms of subarticle (2) or

in terms of subarticle (3) within three months of the date of

the death of the settlor, the heirs may, and the notary who

published the will, or the Notary keeper of his deeds shall,

apply to the Court for the appointment of a trustee in

accordance with the terms of the trust and this Act.''.

19. In the Second Schedule of the Traffic (Regulation) Amendment of

the Second

Ordinance, for the words

Schedule of the

Traffic

(Regulation)

''Driving at an excessive speed ....................................

30''

Ordinance.

there shall be substituted the words

''Driving at an excessive speed

up to 15 kilometres per hour over the limit ..........

over 15 kilometres per hour over the limit ...........

30''.

Schedule

"SECOND SCHEDULE

Title I

OF LEGAL ORGANISATIONS

Sub-Title I

Preliminary and Definitions

1. (1) For the purposes of this Schedule, an organisation

means a universality of persons who associate or a universality of

things which are appropriated to achieve a lawful purpose having a

form recognised by law, and which is capable of being a legal person

in terms of law.

(2) Legal personality is the status granted by law to an

organisation which is established for a lawful purpose stated in

writing in a constitutive instrument, which has a patrimony of assets

and liabilities, separate and distinct from that of any other person and

the legal powers to achieve such purpose through the administration

of its own governing body.

(3) Legal personality exists when an organisation is

recognised or is established as a legal person by a special law or it is

registered in terms of the provisions of this Schedule or any other

special law which grants legal personality.

(4) In confirmation of the freedom of association guaranteed

by the Constitution and the laws of Malta, an association of persons

shall not be required to qualify as a legal person as a pre-condition for

such association of persons to carry on any lawful activities pursuant

to any purpose for which it has been established.

(5) Any person has a right to establish legal organisations as

long as that person complies with the prescribed rules as to form and

content.

(6) Organisations may be public or private.

(7) Public organisations and their administrators are governed

by the law applicable to the State and the public service, and any

other special laws applicable to the particular organisations. When the

State makes use of forms of legal organisations governed by Title III

of this Schedule or by the provisions of any special law, the

provisions applicable to the particular legal form shall apply.

(8) Private organisations are governed by the provisions of

Title III of this Schedule, as may be applicable, and the special laws

which may be applicable to their legal form and their purpose.

(9) In this Schedule -

(a)

any reference to "the Court" shall be deemed to be a

reference to the Civil Court in its voluntary jurisdiction unless it

is otherwise expressly stated;

(b) the terms ''non-profit making'' and ''social purpose''

shall have the meaning as assigned to them in the Voluntary

Organisations Act, 2007;

(c)

the term ''public organisation'' shall mean any

organisation which is controlled, directly or indirectly, by the

Government and an organisation is ''controlled by the

Government'' where the Government enjoys the power to

appoint or remove a majority of the administrators of the

organisation;

(d)

''relevant date'' means the 31st March 2007;

(e)

''special law'' means an Act of Parliament or a part of

this Code which regulates a particular legal form or forms of

legal organisations.

Sub-Title II

Of Foreign and International Organisations

2. (1) Foreign organisations having legal personality under Foreign and

the laws by which they are established shall be recognised as legal international

organisations.

persons for all purposes of law.

(2) International organisations which are afforded legal

personality in any multilateral or bilateral treaty to which the State is

a party shall be recognised as legal persons for all purposes of law.

The Minister responsible for justice shall, from time to time, publish a

list of such organisations in the Gazette.

(3) The law applicable to the establishment of such foreign or

international organisations shall apply to all matters regarding such

legal persons, including their existence, the construction and effects

of their deed of establishment and their administration and, to the

extent that an international organisation is the subject of a special law

following the ratification by the State of the treaty establishing such

organisation, such organisation shall also be governed by such law or

treaty.

(4) Unless exempted by express provision of law, any foreign

or international organisation, whether vested with legal personality or

not, which carries on an activity in Malta on a regular basis is

required to register with the Registrar for Legal Persons, appointed

under article 11 of this Schedule, prior to commencing its activities.

For the purposes of this article "regular activity" means activity

having a duration of more than three months or which is carried out

through a permanent establishment in Malta.

TITLE II

OF LEGAL PERSONALITY

Sub-Title I

Of Legal Persons

3. (1) Legal persons are organisations endowed with legal

personality. Legal personality is acquired through the formal

recognition of the State. Recognition by the State requires a specific

act of recognition and no other administrative act of the State in

relation to an organisation or activity shall constitute recognition.

Legal personality shall be granted on the registration of an

organisation in the Public Registry in accordance with article 12 of

this Schedule.

(2) When organisations are created by voluntary act, they shall

be established in accordance with such legal forms as the law

provides for.

(3) An organisation shall only be recognised as a legal person

if it complies with such formalities as are applicable to the legal form

selected for its establishment and registration.

(4) Organisations created by voluntary act, whether registered

or not, are primarily governed by the laws applicable to their

particular legal form or to their purpose or both and, where the

provisions of special laws or provisions of other parts of this Code do

not provide on any matter provided for in this Title, also by the

provisions of this Schedule.

(5) Organisations which do not enjoy legal personality shall

only have such rights and powers as are granted to them by or in

pursuance of the express provisions of law.

4. (1) Every legal person has a patrimony which shall, to General rules

the extent provided by law, be appropriated to a purpose or purposes applicable

legal persons.

which shall be lawful, possible, and not immoral or against public

policy. Such purpose may be a private benefit or purpose or may be

non-profit making with a social or other purpose. When the purpose is

a private benefit it must be, on pain of nullity, for the benefit of a

person or class of persons who can be ascertained or are

ascertainable. In the absence of a specified purpose, the purpose of

the legal person shall be deemed to be the private benefit of the

founders thereof or their successors in title.

(2) Every legal person must be identifiable by a unique name

which is assigned to it on the date on which it is constituted, and

under which it exercises rights and performs its obligations. Such

name may be changed following the procedure established by law.

Any name must conform to law and include, where required, a

denomination that clearly indicates the legal form assumed by the

legal person.

(3) Every legal person shall have an address in Malta where

communications can be received and information requested about its

activities.

(4) Legal persons act through their organs, such as a board of

administrators, directors or trustees and, to the extent that it has

members, the general meeting of members on matters designated to

such organ.

(5) Legal and judicial representation of a legal person shall be

vested in the manner stated in the statute of the organisation or the

applicable law and the administrators shall be deemed to enjoy the

power to delegate such powers of representation by means of a

written resolution or written power of attorney in favour of any third

parties. The administrators of a legal person bind it to the extent of

the powers vested in them by law, the constitutive act and any bye-

laws or as otherwise stated in the law applicable to their particular

legal form

Provided that any limitation in the powers of the

administrators shall not be relied upon as against third parties in good

faith irrespective of whether such limitation, published or not, arises

from the deed of constitution or from any internal decision, unless it

is proved that such third party was aware that the act was in breach of

the limitation.

(6) Every legal person must have at least one administrator

who may act on its behalf and in the absence of at least one

incumbent in the office of administrator, the Attorney General or any

other interested person shall be entitled to request the Court to

appoint an administrator for such purposes, for such time and under

such conditions as the Court considers appropriate.

(7) Any person acting in the name of a legal person which

does not exist shall be bound personally to perform the obligations

undertaken, except as otherwise stated in any special law, a legal

person may ratify any act done in its name before it was registered.

Upon ratification the legal person is bound by the obligations entered

into by the person who acted in its name and shall be entitled to all

rights. The ratification shall not constitute a novation unless the other

party to the transaction expressly releases the person acting in the

name of the legal person from the obligations assumed by it

Provided that a person acting for a legal person before it is

constituted shall not be bound personally if the contract stipulates

otherwise or includes a statement to the effect that the agreement is

conditional upon the legal person coming into existence or that the

legal person might not be constituted or may not assume the

obligations undertaken in the contract.

(8) Legal persons may not exercise tutorship or curatorship to

a person. They may, however, to the extent that they are authorised by

law to act as such, hold office as trustee or curator of property. They

may also act as a liquidator or executor of a will, an official

consignee, a judicial sequestrator, a trustee or an administrator of

another legal person.

(9) Legal persons may be the beneficiaries of dispositions

under wills as well as donations subject to the following provisions

(a)

testamentary dispositions in favour of unregistered

organisations shall not come into effect, and to the extent

performed shall be revocable on demand of any person

interested in the will unless an application for the registration of

such organisation is made in terms of the applicable law within

one year from the day of the opening of succession;

(b) donations made to an organisation shall be deemed

to be made on the assumption that it is registered or will be

registered and shall not come into effect, and to the extent

performed shall be revocable on demand of the donor, unless an

application for the registration of such organisation is made in

terms of the applicable law within one year from the donation;

(c)

the administrators who have been informed of their

engagement and accept the same shall effect such registration

within the period above stated; and

(d) the Court shall have the power to extend such time

limit on application of any administrator or other interested

party at its discretion.

(10) The provisions of subarticle (9) shall not apply to pious

foundations and marriage legacies governed by article 6(4) of this

Schedule.

(11) Legal personality may not be set up against a person in

good faith in order to perpetrate fraud.

5. (1) A legal person exists in perpetuity unless otherwise Duration of

legal persons.

provided by law or its constitutive act.

(2) Legal persons constituted directly by or in terms of a

special law exist from the date of the coming into force of the law or

from the date prescribed therein. In other cases, legal persons exist

from the date of registration or from such other date provided for in

the laws that are applicable to their particular legal form.

(3) Legal persons cease to exist with effect from the date when

they are struck off from the relevant register in accordance with the

laws applicable to their particular legal form or as stated in any

special law.

(4) Without prejudice to the rules applicable to legal persons

of a particular legal form, on the application to the Court of any

interested person or the Registrar, the Court may, failing the taking of

such relevant actions by the legal person or its officers according to

the applicable law, order the striking off from the register of the legal

person in the following cases

(a) when the persons vested with such authority so

determine in accordance with the constitutive act; or

(b) upon the happening of the events expressly stated to

have such effect -

(i)

in the constitutive act; or

(ii) in the laws that are applicable to their

particular legal form; or

(c) when the purpose for which they have been

established has been achieved, exhausted or has become

impossible; or

(d) when there is no administrator in office for a period

exceeding six months; or

(e)

when there are no longer any registered members in

case of an association or no beneficiary in case of a private

foundation.

6. (1) Notwithstanding that they are not registered in a

register which results in legal personality, organisations which were

recognised as being legal persons prior to the coming into force of

this Act, hereinafter referred to as the "relevant date", in terms of

customary law or in terms of any final judgement delivered by any

Court, shall continue to be recognised as legal persons indefinitely

unless -

(a)

such continuing status is subject to registration in

terms of this Schedule or any special law, is required in a notice

issued by the Minister responsible for justice and published in

the Gazette and registration is not effected within the time

provided for in such notice, in which case they shall cease to be

recognised as legal persons with effect from the lapse of such

date, or

(b)

they otherwise cease to exist according to law.

(2) All foundations, hereinafter referred to as an "existing

foundation", created by public deed and existing on the relevant date

shall be deemed to have had legal personality from the date of their

establishment but shall be bound to register as legal persons in terms

of this Schedule within two calendar years of the relevant date.

(3) Notwithstanding that an existing foundation fails to

register as required by subarticle (2), such existing foundation shall

continue to enjoy legal personality in accordance with subarticle (1)

but such foundation, as well as its administrators, shall be governed

by the provisions of this Schedule applicable to unregistered

organisations with effect from the lapse of the two-year period

referred to in subarticle (2).

(4) Pious foundations and marriage legacies shall not be bound

to register and shall continue to enjoy legal personality until they are

wound up. These foundations shall be governed by the provisions of

this Schedule applicable to unregistered organisations with immediate

effect, unless registered.

(5) Associations, hereinafter referred to as "existing

associations" established in writing before the relevant date which are

considered to be legal persons in accordance with the provisions of

the Interpretation Act shall continue to be considered as legal persons Cap. 249.

although they are not registered; however existing associations which

do not register as legal persons, as well as their administrators, shall

be governed by the provisions of this Schedule applicable to

unregistered organisations with effect from the lapse of one calendar

year from the relevant date.

(6) In this Schedule the reference to "pious foundation"

comprises -

(a) an autonomous pious foundation, that is, an

aggregate of things destined for pious or religious purposes and

established as juridical persons by the competent ecclesiastical

or other religious authorities;

(b) non-autonomous pious foundations, that is, temporal

goods given in any way to a public juridical person established

by the competent ecclesiastical or other religious authorities and

carrying with it a long term obligation, such period to be

determined by the relevant canon or other religious law or rule

and where the obligation consists of binding the juridical

person, from the annual income, to celebrate Masses or other

religious ceremonies, to perform other determined ecclesiastical

functions, or in some other way to fulfil the pious or religious

purposes as defined by the applicable religious laws or rules;

and "pious or religious purposes" are understood to be those which

concern acts of piety, of the apostolate or of charity, whether spiritual

or temporal.

Sub-Title II

Of Administrators

7. (1) Every organisation shall be managed by one or more Appointment of

administrators who shall be responsible for maintaining possession administrators.

and control of the property of the organisation, safeguarding such

property and ensuring compliance with the statute of the organisation,

the provisions of this Schedule and any special law applicable to its

particular legal form.

(2) For the purposes of this Schedule, "administrator" means

an officer or a person who is appointed to control and administer an

organisation including a governor, a director, a trustee or a committee

member and any person who carries out such functions even if under

another name.

(3) The statute shall designate the first administrators or, if not

designated, how administrators are appointed and removed.

(4) Subject to the terms under which they are engaged,

administrators are bound by fiduciary obligations as stated in article

1124A of the Code.

8. (1) Persons convicted of any of the crimes mentioned in

Titles V, VI and IX of Part II of Book First of the Criminal Code in

the previous ten years shall not be eligible for appointment or election

to

(a) the office of treasurer, deputy treasurer or assistant

treasurer or a similar office of an organisation; or

(b) any other office in such organisation the holder of

which is responsible for the collection, disbursement, custody or

control of the assets of the organisation or for its accounts; or

(c)

an auditor of such organisation.

(2) Persons who are subject to a disqualification order issued

by the Court in terms of subarticle (3) shall not act in such capacities

and for such times as are stated in the order.

(3) The Court may disqualify any person from activity as an

administrator of an organisation, or rehabilitate such person in

accordance with regulations which may be made by the Minister

responsible for justice from time to time.

9. (1) Administrators may be removed in cases of

misconduct, failure to declare conflicts of interest, breach of duty or

failure to comply with the statute or any provisions of this Title

Provided that, notwithstanding any provision of the statute

of an organisation, any action intended to remove an administrator on

such grounds shall be preceded by a notice in writing to such person

stating the alleged reasons for such removal and providing such

person with a reasonable opportunity to defend himself and rebut the

allegations.

(2) Removal of an administrator shall take place in accordance

with the statute of the organisation. After exhausting all applicable

remedies within the organisation, any person who demonstrates an

interest may apply to the Court with a request for removal of an

administrator and the Court shall issue such orders as it deems

necessary after hearing the applicant and the administrator and

considering any other relevant evidence.

(3) The Court may, when it orders the removal of an

administrator, name a temporary or definitive administrator or

administrators in substitution when it appears to the Court that the

method of appointment as stated in the statute will not result in an

effective and immediate appointment of a substitute administrator or

administrators.

(4) Any provision in a statute to the effect that an

administrator may not be removed for the reasons mentioned in

subarticle (1) shall be null and void.

(5) The Court may impose disqualification in terms of article 8

of this Schedule in any case where it orders the removal of an

administrator.

(6) The powers of the Court referred to in this article may be

exercised by any Court appraised of proceedings involving an

administrator.

10. (1)

Administrators shall keep records of -

Records,

accounts and

reports.

(a)

all assets and liabilities; and

(b)

all income and expenditure,

of the organisation for annual financial periods.

(2) Administrators shall prepare such accounts and reports at

such times and with such form and content as may be prescribed or as

may be applicable to their particular legal form. Such accounts and

reports shall be reviewed as may be prescribed or as may be required

by applicable law.

(3) Such accounts, reports and records shall be held for a

period of ten years after the relevant annual period to which they

refer, or for such other period imposed in relation to an organisation

under any special law applicable to its legal form.

Sub-Title III

Of the Registrar

11. (1) There shall be a Registrar for Legal Persons who Power of the

shall be appointed by the Minister responsible for justice for that Minister

appoint

purpose and who shall perform the duties and exercise the powers Registrar.

imposed and conferred by this Schedule or by any regulations made

under subarticle (3).

(2) The Minister may also appoint persons as Deputy

Registrars to assist the Registrar conferring on such persons all or any

of the powers of the Registrar under this Title.

(3) The Minister may make regulations laying down the

functions and powers of the Registrar.

(4) The Registrar shall be bound to notify decisions he may

take refusing applications to register organisations in writing,

providing the reasons for his decision. Any person or organisation

which is aggrieved by any decision of the Registrar may appeal to the

Court from the decision within thirty days of receipt thereof or where

there is no response to an application to the Registrar to register an

organisation, after forty-five days from the date of application to

register.

Sub-Title IV

Of Registration of Organisations

12. (1) Organisations may be registered in such manner as

may from time to time be provided in this Schedule or in the law that

is applicable to their particular legal form.

(2) In the absence of provisions on registration in relation to

any form of organisation which may be granted legal personality by

any law, organisations shall be registered at the Public Registry in

accordance with the provisions of this Title or of any regulations.

(3) Where an organisation may acquire legal personality

through registration in a public registry under any other law

applicable to its form, it shall not be lawful to register such an

organisation in terms of this Sub-Title.

(4) Except for public organisations and other organisations

which are already registered and have legal personality as a result

thereof, the enrolment of an organisation with or the issue of a

certificate or licence by the State which, in terms of any applicable

law, grants legal personality to the organisation shall be interpreted as

requiring, as an additional condition thereof, the registration of such

organisation in terms of this Schedule.

(5) It shall be a condition for registration of any organisation

the administrator or administrators of which are not ordinarily

resident in Malta, to appoint and retain at all times, a person who is

ordinarily resident in Malta to act as judicial representative of such

organisation in Malta and this for all purposes of any law in Malta.

(6) A certificate of registration given in respect of an

organisation is conclusive evidence that the requirements of this

Schedule in respect of registration and of matters precedent and

incidental to it have been complied with and that the organisation is

duly registered in terms of this Schedule.

Sub-Title V

Of Unregistered Organisations

13. (1) An unregistered organisation is an organisation Unregistered

having a form recognised by law, which is constituted by an Organisations.

instrument in writing and which, being registerable in terms of this

Schedule or any other special law, is not so registered.

(2) The instrument in writing establishing an unregistered

organisation shall contain, on pain of nullity, an express statement of

a specific purpose or purposes for which the organisation has been

established, which purposes shall be construed restrictively.

(3) Without prejudice to the right of association of any person

and the right of any person to establish an organisation, an association

of persons or the appropriation of property to a purpose which is not

in written form is not recognised for the purposes of this Schedule.

(4) The following organisations shall not be treated as

unregistered organisations for the purposes of this Schedule although

they are not registered

(a) any organisation which is already registered

pursuant to a special law regulating its form resulting in legal

personality;

(b) public organisations, except those public

organisations which have been established in a legal form which

requires registration, if they are not registered; and

(c)

international organisations not obliged to register in

Malta,

each of which shall be regulated by any special law applicable to their

particular form.

14. (1) Unregistered organisations are not legal persons but, Powers of an

pursuant to this Sub-Title, they enjoy limited recognition and legal unregistered

organisation.

powers to achieve the specific purposes for which they are

constituted.

(2) An unregistered organisation may enter into transactions in

relation to movable or immovable and other registerable property,

may open bank accounts and may engage persons and contractors to

provide services it may require, strictly for the achievement of the

express purposes of the organisation.

(3) An unregistered organisation may enter into contracts in its

own name.

(4) An unregistered organisation may be sued in its own name

and is represented in legal proceedings by any administrator. An

unregistered organisation may sue in its own name and is represented

by the person who, in terms of the statute, enjoys such power or in the

absence of such appointment, by the sole administrator or, if there is

more than one, by any two administrators.

(5) An unregistered organisation may not establish another

organisation unless the other organisation is registered.

(6) The powers of an unregistered organisation shall be

construed as being limited strictly to what is necessary for the

administration of the organisation and the fulfilment of the purposes

for which it is expressly established and only to achieve such

purposes.

15. (1) The internal management and administration of an

unregistered organisation is regulated by its statute. Legal

representation of the organisation shall be vested in the person who,

in terms of the statute, enjoys such power or, in the absence of such

appointment, by the sole administrator or, if there is more than one,

by any two administrators.

(2) The contributions of the promoters and assets acquired by

such contributions constitute the patrimony of the unregistered

organisation. Any obligations undertaken by the unregistered

organisation may be enforced against such patrimony without

prejudice to the liability of other persons for such obligations.

(3) Any property acquired by an unregistered organisation

shall, unless otherwise stated in its statute, be deemed to be held in

co-ownership between the promoters according to the rates of

contribution

Provided that a promoter may only demand the division of

such patrimony and withdraw his contribution from an unregistered

organisation when the organisation is terminated and all obligations

towards third parties are performed.

(4) In the case of an unregistered organisation established for a

social purpose or otherwise as a non-profit making organisation, any

property appropriated or endowed to such purpose shall be held by

the administrators as fiduciaries and shall be available only for the

social or other lawful purpose stated in the statute. On dissolution of

the organisation, the property must be applied in favour of such social

or other purpose or as provided in its statute, failing which it shall

devolve in favour of such organisation as may be designated by the

Minister responsible for social policy by notice published in the

Gazette which shall apply the same to a similar purpose or as may be

provided in applicable law.

Sub-Title VI

Of Responsibility of Persons involved in Organisations

16. (1) The promoters and members of a registered Responsibility

organisation, or in case of a registered foundation, the founders, the of

involved in

donors or the beneficiaries, shall not be liable for the obligations of registered

organisations.

such an organisation, except to the extent they expressly agree to be

so liable or as expressly stated in any provision of this Schedule or

any special law.

(2) The promoters and members of a registered organisation

are liable towards the legal person for anything they have bound

themselves to contribute to it in writing, unless otherwise provided by

law.

(3) In case of unlawful acts, a Court may, on the application of

any interested party, declare the founders, promoters, administrators

or members who have consented to or otherwise have knowingly

taken part in the unlawful act to the detriment of the legal person, as

personally liable for any damage suffered by the legal person.

(4) The administrator of a registered organisation shall not be

personally liable for the obligations of the organisation except in the

following cases

(a)

to third parties for the obligations of the organisation

if -

(i) he is guilty of fraud or bad faith in entering

into any obligations;

(ii) he has entered into obligations in favour of

third parties at a time when he knew or ought to have

known that there was no reasonable prospect that the

organisation would avoid being wound up due to

insolvency;

(b) to the organisation for the performance of the

obligations that he has entered into on its behalf, without being

entitled to the benefits, and for any benefit which accrues to him

personally, if he has failed to declare a personal interest or a

conflict of interest;

(c)

to the organisation to account for any loss if he has

acted in breach of duty as stated in the statute or this Schedule

in bad faith or has been negligent in the carrying on of his

duties;

(d) to the beneficiaries of an organisation or the

Attorney General on their behalf, if he has acted as stated in

paragraph (c) or in a situation where there is a conflict of

interest

Provided that nothing in this subarticle shall render an

administrator liable more than once for the same act.

(5) In those cases where an organisation has more than one

administrator, the responsibility of the administrators shall be joint

and several unless some particular duty has been exclusively

entrusted to one particular administrator, in which case only he shall

be liable.

(6) An administrator shall not be liable for the acts of another

administrator if he shows that he was not aware of the breach at the

time of its occurrence and on becoming aware of it he signified his

dissent in writing without delay and took all reasonable measures to

hinder the continuation of the breach or knowing of the intended

breach he took all reasonable measures to avoid its occurrence.

(7) Any provision in the statute of the organisation or any

agreement exonerating an administrator from liability for wilful

misconduct, gross negligence or breach of duty shall be null and void.

17. (1) The promoters and administrators of an unregistered

organisation shall be jointly and severally liable -

(a)

to keep the property of the unregistered organisation

identified as such and distinct from their own personal property

and other property they may be administering;

(b)

for the preservation of any property received;

(c)

for the use of assets to the fulfilment of the purposes

expressly stated in the statute of the unregistered organisation;

and

(d) to ensure, to the extent possible, considering their

functions, observance of the law applicable to the unregistered

organisation and its activities.

(2) Without prejudice to the availability of assets of an

unregistered organisation for the fulfilment of its obligations,

members and supporters of an unregistered organisation shall only be

liable for the obligations expressly undertaken by them in the statute

or any subscription document.

(3) The promoters of an unregistered organisation as well as

the administrators, whether still in office or otherwise, shall be jointly

and severally liable among themselves and with the organisation for

any of its liabilities incurred after the coming into force of this

provision and for the observance of all legal requirements in relation

to the activities of such organisation

Provided that the liability of an administrator shall be

limited to liabilities incurred and performance of obligations while

such administrator was in office

Provided further that, except in the case of fraud, the

liability of the promoters and the administrators for the obligations of

the unregistered organisation shall be in subsidium and they shall

enjoy the benefit of discussion of the property of the organisation

prior to being personally obliged to fulfil obligations. Promoters and

administrators may not waive such benefit and any waiver of such

benefit shall be unenforceable

Provided further that the liability of a promoter shall be

limited to liabilities incurred until such time as the promoter hands

over the management and administration to the administrators of the

organisation.

(4) Where the liability of members and administrators of an

unregistered organisation having a particular legal form is regulated

specifically by a provision of this Schedule or any special law, such

provisions shall prevail over the provisions of this article.

18. Any person who claims or purports to act in the name of a Acting in the

legal person which does not exist or an unregistered organisation for name

inexistent

which no written instrument exists shall be personally liable to fulfil organisation.

all the obligations undertaken and shall be liable for any damages

caused through such actions. Such person shall be personally bound

to return to the grantor any property received for the purported

purposes of the organisation.

Sub-Title VII

Of Liability of Organisations

19. (1) Legal persons are distinct from their promoters,

founders, administrators and members, if any. The acts of legal

persons bind no one but themselves except as provided by law.

(2) An organisation shall be liable for the fulfilment of its

obligations with all its present and future assets and shall not be liable

for the obligations of any other person except to the extent that it

expressly agrees to be so liable.

(3) An endowment of property shall be subject to reduction or

revocation to the extent it is in conflict with any rules of mandatory

application or in terms of article 1144 of the Code if it is detrimental

to the rights of a creditor

Provided that an administrator who has acted in good faith

shall not be liable to account for any assets paid out, distributed or

expended in accordance with the statute of the organisation without

knowledge of the claim by the third party.

(4) The rules in subarticles (2) and (3) shall mutatis mutandis

apply to unregistered organisation, without prejudice to the personal

liability of its administrators or other persons as stated in this

Schedule.

(5) A registered organisation may, unless prohibited by its

statute, establish other organisations, of any legal form, to achieve all

or any of the purposes for which it has been established, whether the

latter constitute legal persons or not.

(6) When a registered organisation establishes other

organisations which are registered as legal persons and maintains

control over them, the organisations shall constitute a group of

organisations for the purposes of this Schedule. An organisation shall

be deemed to control another organisation if the administrators of the

first have the power to appoint or remove the administrators of the

second, or if this power has been vested in another person, persons or

organ of the second organisation, if the administrators of the first

have the power to amend or revoke the vesting of such power.

(7) An organisation forming part of a group of organisations,

whether as founder or as a member of the group, shall not be liable for

the obligations of other members of the group except to the extent it

expressly undertakes in writing or as otherwise provided in any

provision of this Code.

(8) The liability of all foreign or international organisations

which are controlled and administered in Malta or whose principal

activities are in Malta, as well as that of their administrators, shall be

subject to the preceding provision in so far as their administration in

Malta is concerned, subject however to any provisions of any special

law applicable to them.

Sub-Title VIII

Miscellaneous

20. (1) It shall be lawful for a registered organisation to Segregated cells

establish segregated cells within the organisation to achieve particular within

registered

purposes with particular assets. Where the special law applicable to a organisations.

particular legal form of registered organisation already provides for

segregated cells, or equivalent features, such provisions shall apply to

the exclusion of the provisions of this article.

(2) A segregated cell within a registered organisation exists

when established formally

(a)

by the statute of the organisation on creation of the

organisation; or

(b) subsequently, by the administrators pursuant to a

power vested in them by the statute,

and in either case shall be established by reference to shares, interests

or other rights of the members or beneficiaries of the organisation or,

in the absence of any such rights, by reference to purposes as defined

in the statute or in resolution of the administrators, or by reference to

both such rights and purposes.

(3) A segregated cell shall not be a legal person and nor shall it

be eligible for registration as a legal person, but shall have its own

distinct name or designation.

(4) A segregated cell is established subsequently to the

creation of an organisation when the following conditions are

observed

(a)

the organisation is authorised by its statute to

establish segregated cells for the achievement of one or more

defined purposes which are consistent with the main purposes

of the organisation;

(b) the administrators of the organisation resolve in

writing to establish such cell; and

(c)

a notice relating to the establishment of a segregated

cell is delivered to the Registrar for registration.

(5) When a segregated cell is established -

(a)

the assets and liabilities of the cell shall constitute a

distinct patrimony which shall be distinct from all other assets

and liabilities of the organisation or other cells which may be

established;

(b) the assets of such cell shall be available for the

fulfilment of any obligations undertaken by the organisation in

relation to that cell but not for any other liabilities entered into

by the organisation for itself or in respect of other cells;

(c)

the general assets of an organisation shall not be

available for the fulfilment of the obligations undertaken in

relation to the cell; and

(d) there shall be implied (except in so far as the same is

expressly excluded in writing) in every transaction entered into

by an organisation with segregated cells the following terms

that -

(i)

no party shall seek, whether in any

proceedings or by any other means whatsoever, to make or

attempt to use any assets attributable to any cell to satisfy a

liability not attributable to that cell; and

(ii)

if any party succeeds by any means

whatsoever in using any assets attributable to any cell to

satisfy a liability not attributable to that cell, that party

shall be liable to pay to the organisation a sum equal to the

value of the benefit thereby obtained by him; and

(iii) any asset or sum recovered by the

organisation under the implied term set out in this

paragraph or by any other means whatsoever in the events

referred to herein shall, after the deduction or payment of

any costs of recovery, be applied by the organisation so as

to compensate the cell affected.

(6) When a segregated cell is established the assets of the cell

must be segregated from all other assets of the organisation and are

held and administered separately and distinct accounts must be

maintained in accordance with applicable law in relation to each cell.

The existence or termination of each cell must be disclosed in the

reports and accounts of the organisation.

(7) The legal effects stated in subarticle (6) shall arise only if -

(a)

all activities relating to a cell shall be undertaken in

a manner that it is expressly disclosed to third parties that the

activities are those in respect of the particular cell

Provided that such requirement shall be satisfied if

third parties are otherwise aware or ought, from the

circumstances, to be aware of the fact that the activities

undertaken are those in respect of the particular cell;

(b) no statement or representation is made by the

administrators of the organisation to the effect that the

organisation is liable for the obligations undertaken in respect of

the cell;

(c)

the cell is established in accordance with this article

and all relative procedures and formalities are observed at all

times.

(8) When the conditions in subarticle (7) are satisfied, no court

shall order the issue of any warrant, precautionary or executive,

against the assets of a cell in respect of a claim for which the

organisation or another cell is liable. In the event of enforcement on

any assets attributable to a cell in respect of a liability not attributable

to that cell, and in so far as such assets or compensation in respect

thereof cannot otherwise be restored to the cell affected, the

organisation shall -

(a)

cause or procure its auditor, acting as expert and not

as arbitrator, to certify the value of the assets lost by the cell

affected; and

(b) transfer or pay to the cell affected, from the assets to

which the liability was attributable to the extent available, assets

or sums sufficient to restore to the cell affected the value of the

assets lost.

(9) The rules, including without limitation the rules applicable

to dissolution and winding up, applicable to the legal form of an

organisation within which a cell is established shall apply to the cell

as though the cell were itself a registered organisation of the same

legal form. The winding up of a cell due to its inability to honour its

debts shall not affect the continuing operation of the organisation or

other cells in any manner whatsoever and the appointment of a

receiver or liquidator for a cell shall not affect the powers of the

administrators in relation to the organisation or any other cells.

(10) The provisions of fiscal law which apply to legal persons

shall mutatis mutandis apply to a cell as though the cell were itself a

registered organisation of the same legal form of the organisation

within which the cell is established.

(11) The Minister may make regulations to regulate segregated

cells, in general or for particular legal forms of organisations, and to

regulate any matters related or incidental thereto, including on the

dissolution of cells and on the transfer of assets of a cell to another

organisation, with or without segregated cells, and the legal effect of

such transfer.

21. (1) It shall be lawful to convert a legal person in one

form to a legal person having a different form by following the

procedures which may be laid down in any regulations made by the

Minister responsible for justice in terms of this article.

(2) When a legal person in one form is converted into another

form it shall not be necessary to dissolve and wind up the legal person

and such legal person shall continue to exist as the same legal person

with all rights and subject to all obligations existing prior to the

conversion.

(3) It shall also be lawful to convert a registered organisation

into a trust for the benefit of the persons beneficially interested in the

organisation by following the procedures which may be laid down in

any regulations made by the Minister responsible for justice in terms

of this article.

(4) When a legal person is converted into a trust, the trustee

shall succeed to all rights and obligations of the legal person and it

shall not be required to dissolve and wind up the legal person as

required by the applicable law. The legal person shall be struck off

from the register in which it is registered subject to the conditions as

may be laid down by regulations.

(5) The conversion of a legal person into another form or into

a trust shall not operate to prejudice any creditor or third party in any

manner whatsoever.

22. (1) It shall be lawful to amalgamate two or more Amalgamation

organisations into one and to divide an organisation into two or more and

legal persons.

organisations. For this purpose, unless otherwise provided by

regulations by the Minister in relation to a particular legal form, the

provisions of the Companies Act shall mutatis mutandis apply and the Cap. 386.

functions of the general meeting, in case of foundations, shall be

carried out by the administrators and any persons whose consent is

required for material decisions to be taken by the administrators.

(2) In the absence of specific rules or regulations by the

Minister on a particular legal form, the provisions of fiscal law which

apply to amalgamations and divisions of companies shall mutatis

mutandis apply to amalgamations and divisions of any other legal

form of a registered organisation.

23. (1) Except where permitted in terms of the Voluntary Public

Organisations Act, 2006, organisations may not engage in public collections.

collections except when permitted to do so pursuant to the Public

Collections Act.

(2) For the purpose of this article "public collection" shall

have the same meaning as is assigned to it in the Public Collections

Act.

24. In addition to other powers to make regulations as already Power of the

provided herein, the Minister responsible for justice shall have the Minister

make

power to make regulations to -

regulations.

(a)

establish the contents of statutes of organisations;

(b) lay down rules to further regulate organisations

which are not registered;

(c)

establish the forms for the registration of any

organisation, certificates of registration and to establish the

powers of the Registrar in relation to registration and all related

matters;

(d) establish forms and content of annual accounts and

reports and methods of review;

(e)

regulate foreign or international organisations

carrying on activities in Malta and the forms and content for

registration and the terms and conditions of registration;

(f)

lay down any rules in connection with foundations

when used in commercial transactions including as collective

investment vehicles, as securitisation vehicles and as shipping

organisations and for the regulation of all matters ancillary

thereto including legal rules applicable to units, umbrella

structures and related matters;

(g)

regulate administrators of organisations generally;

(h)

regulate the winding up of organisations;

(i)

regulate the redomiciliation or continuation of

organisations;

(j)

lay down any penalties for any breaches of the

provisions of this Schedule;

(k) implement any international convention or any EU

Regulation or Directive, to the extent necessary, to which Malta

has adhered to in the context of organisations;

(l)

establish the forms and procedures to be used for

appeals;

(m) lay down rules in relation to public collections by

organisations;

(n) regulate the conversion an organisation having one

legal form into that having another legal form;

(o) lay down rules on the powers of the Court in relation

to the interpretation or variation of a statute and the

administration of an organisation; and

(p) lay down rules for the better carrying out of any of

the provisions of this Schedule.

25. Unless the context otherwise requires -

(a)

the provisions of this Schedule shall only apply in

the absence of rules on the same subject as may be contained in

any special laws applicable to particular forms of legal persons

and in case of conflict between these provisions and the

provisions of any special law, the provisions of the special law

shall prevail;

(b) nothing in this Schedule shall imply the right to

register as a legal person in the Register if the organisation is

already registered in another public register the effect of which

is the grant of legal personality to such organisation, nor the

option to register as a legal person with a particular legal form

in a register other than that stated in the special law applicable

to that form; and

(c)

the Registrar shall not have jurisdiction in relation to

legal persons which are the subject of special laws applicable to

their particular legal form unless expressly granted such

jurisdiction in such special law or regulations made hereunder.

The rights and remedies applicable to such legal persons shall

be regulated exclusively by the provisions of such special law

and nothing in this Title shall grant additional remedies in such

cases.

Title III

OF FOUNDATIONS AND ASSOCIATIONS

Sub-Title I

Preliminary and Definitions

26. (1) A foundation is an organisation consisting of a Definition of

universality of things constituted in writing, including by means of a foundation.

will, by a founder or founders whereby assets are destined either -

(a)

for the fulfilment of a specified purpose; or

(b)

for the benefit of a named person or class of persons,

and are entrusted to the administration of a designated person or

persons. The patrimony, namely assets and liabilities, of the

foundation is kept distinct from that of its founder, administrators or

any beneficiaries.

(2) For the purposes of this Title, the term "foundation" shall

include all organisations, institutes or similarly titled patrimonies

which are set up through the bequest, endowment or appropriation of

assets, by public deed or otherwise and howsoever named, for a stated

purpose or for the benefit of a named person or class of persons, to be

achieved through a designated administrator or administrators, but

shall not include trusts as defined in the Trusts and Trustees Act.

(3) The assets of a foundation may originate from any lawful

business or activity and may consist of present or future assets of any

nature.

(4) When a testamentary bequest is made having the elements

contemplated in subarticle (1), a testamentary executor or the heirs of

a deceased person shall be deemed to enjoy the power to convert such

bequest into a foundation having the same aims and purposes as

stated in the will, and register the same. The testamentary executor or

heirs shall have the power, which shall be exercised with the utmost

good faith, to draft the terms and conditions of the statute of the

foundation, designate the administrators and regulate all matters

which may appear to them to be relevant to comply with the

requirements of registration and the wishes of the testator.

(5) Pious foundations established for purposes as defined in

applicable religious laws shall not be subject to or in any manner

regulated by this Schedule and shall continue to be regulated by the

relative religious laws unless they opt to register as foundations in

terms of this Schedule in which case they shall be regulated by the

provisions of this Code from such date.

(6) Foundations in the form of marriage legacies shall

continue to be regulated by the laws in force on the 31st December,

2006 unless they opt to register as foundations in terms of this

Schedule in which case they shall be regulated by the provisions of

this Schedule from such date.

(7) When a foundation is established exclusively for a

charitable, philanthropic or other social purpose or as a non-profit

organisation or for any other lawful purpose it shall be referred to as a

"purpose foundation" and when it is established for private benefit it

shall be referred to as a "private foundation". Unless evident from the

statute, a foundation shall be considered to be a private foundation.

27. (1) An association is an agreement between three or

more persons to establish an organisation with defined aims or

purposes to be achieved through the dedication of efforts and

resources by such persons and others who may join voluntarily, the

patrimony, namely assets and liabilities, if any, of the association

being distinct from that of the members, its administrators or any

beneficiaries.

(2) Associations are not bound to register as legal persons but

are entitled to do so.

28. (1)

When an organisation -

(a)

is established as a foundation but has features of an

association or vice-versa; and

(b) qualifies for registration both as a foundation and an

association;

it shall be referred to herein as a "hybrid organisation" and shall be

regulated by the following provisions of this article.

(2) A hybrid organisation shall be bound to register as a

foundation unless it amends its statute to that of an association prior

to the lapse of two calendar years from the relevant date.

(3) The administrators shall be bound to pay regard to the

provisions of this Schedule on both foundations and associations in

their administration, and this until such time as the statute of the

organisation is amended to clearly elect one form or other of

organisation.

(4) Where action to modify the statute of a hybrid organisation

is not taken by the founders or members, or it is impossible or

impracticable to do so, the administrators of a hybrid organisation

may at any time apply to the Court to sanction such modifications as

are appropriate to clarify the legal form of such organisation either as

a foundation or an association and the Court shall issue such orders as

it deems appropriate, including amendments to the statute and the

name of the organisation, after considering all evidence submitted to

it and after hearing interested parties who may wish to make

submissions.

(5) In reaching a decision in terms of the preceding subarticle,

the Court shall inter alia pay regard to the initial intentions of the

promoters, the purposes of the organisation and its current operations,

the rights of beneficiaries or members, the future fulfilment of its

purposes and management of the organisation.

(6) The Court shall also have the power to order, upon

application of the administrators, the re-organisation of the

organisation by the creation of other organisations whereby one or

more promoters, founders, members or beneficiaries, as the case may

be

(a)

cease to be treated as founders or otherwise of a

foundation and, or form an association with the sole purpose of

supporting the said foundation or enjoying the benefits of

membership; or

(b) cease to be treated as members of an association

and, or form a foundation to achieve the stated purposes without

any benefits of membership; or

(c)

direct otherwise so as to ensure the effective

achievement of the initial purposes of the organisation.

(7) In making such an order the Court shall ensure that neither

the purposes of the organisation nor any vested rights of any person

shall be affected, nor shall any obligations other than those freely

undertaken by any person arise from such modification or re-

organisation.

Sub-Title II

Of Foundations

29. (1) A foundation may only be constituted by virtue of a

public deed inter vivos or by a will.

(2) The deed of foundation shall contain, on pain of nullity, an

endowment of money or property worth at least five hundred liri

except in the case of a foundation established exclusively for a social

purpose or as non-profit making in which case the endowment shall

be worth at least one hundred liri.

(3) When the property endowed is not cash or other asset, the

value of which appears on the face of it, the administrators shall

declare, in a statement which shall be attached to the application form

for registration, that in their considered opinion the property endowed

upon or vested in the foundation has a value of at least the amount

required by this article

Provided that a foundation which has been duly registered

shall not lose its eligibility to remain registered if, subsequent to

registration, the value of its assets is reduced to less than the amount

required by this article.

(4) The deed of foundation shall, on pain of nullity, state the

following

(a)

the name of the foundation, which shall include the

word "foundation";

(b)

the registered address, in Malta;

(c)

the purposes or objects;

(d)

the constitutive assets with which it is formed;

(e)

the composition of the board of administration and

the names of the first administrators, and if not yet appointed,

the method of their appointment;

(f)

the legal representation;

(g)

the term for which it is established, if any;

(h) in the case of a foundation, the administrators of

which are non-residents of Malta, the name and address of a

person resident in Malta who has been appointed to act as the

local representative of the foundation in Malta; and

(i)

in the case of a private foundation, either the names

of beneficiaries, or, in the absence of such indication, a

declaration that the foundation is constituted for the benefit of

beneficiaries. In the latter case the beneficiaries shall be

indicated in a written instrument, which need not form part of

the public deed, called the "beneficiary statement", signed by

the founder and addressed to the administrators, and the same

shall be authenticated by the Notary Public who publishes the

deed of foundation.

(5) The statute shall be signed by the founders and any person

subscribing to the statute after a foundation is established shall be

deemed to have consented to all the provisions of the statute and all

rules which may have been validly promulgated by the foundation

until such date. In the event that more than three founders wish to

establish a foundation, a statement may be made of this fact in the

statute and the signature of three founders on behalf of all founding

members stated in a schedule to the statute shall be sufficient to

indicate the consent of all stated founders.

(6) The written consent of the administrators named in the

statute to act as administrators of the foundation must be delivered to

the Registrar prior to registration of any foundation.

(7) It shall not be lawful to state a term in excess of one

hundred years except in case of a purpose foundation, a foundation

used as a collective investment vehicle or a foundation used in a

securitisation transaction which may be established for an unlimited

term. When no term is specified, a foundation shall be valid for one

hundred years from its establishment. In the event that a longer term

is stated in a deed it shall terminate on the hundredth anniversary

from when it came into existence. The limitation on duration also

applies in the case a foundation results from the conversion of another

organisation or of a trust in accordance with this Schedule and any

regulations. In such a case periods of existence shall be considered

cumulatively.

(8) Article 1753(1) of this Code shall not apply to endowments

in favour of registered foundations.

(9) Foundations established in accordance with this Schedule

are not prohibited by articles 331, 757 to 761 and 1776 of this Code.

(10) Article 586 of this Code shall not affect any term of a

foundation because it relates to the inheritance of the founder or

because the provisions relating to property belonging to the

foundation are to take effect after the death of the founder.

(11) (a)

The provisions of this Schedule shall apply to

dispositions in wills in favour of foundations, whether such

foundations are created inter vivos or by testamentary disposition, and

this notwithstanding the provisions of articles 688, 693 and 695 and

other similar provisions of the Civil Code.

(b) The administrators of a foundation may not

renounce to a benefit to the foundation under a will pursuant to a

disposition in its favour except with the prior consent of the

beneficiaries or the court. In such an event, if the administrator is not

willing to accept to act as an administrator or to continue in such

office, the provisions of article 35 of this Schedule shall apply.

(12) The provisions of this Title shall apply to all foundations

existing on the coming into force of this provision but existing

foundations will not be obliged to comply with the requirements in

subarticle (2) and shall comply with the requirements of subarticle (3)

only upon registration. Nothing in this Schedule shall render invalid

anything done prior to the coming into force of this law which was

valid when done.

30. It shall be the obligation of all designated administrators of

any foundation, other than pious foundations and marriage legacies,

established after the coming into effect of this Title to register such

foundation in terms of this Schedule within the periods stated in this

Title.

31. (1)

For the purpose of registration of a foundation -

(a)

in the case of a purpose foundation an authentic

copy of the constitutive instrument is to be delivered to and filed

with the Registrar by the persons mentioned in subarticles (2),

(3), and (4); and

(b) in the case of a private foundation the constitutive

deed without the beneficiary statement, if any, and a note of

reference referring only to the founder shall be filed with the

Registrar.

(2) Where the foundation is created by a public deed an

authentic copy thereof is to be delivered by -

(i)

the founder; or

(ii) after having accepted to act as such, the

administrators appointed in the said deed; or

(iii) the Notary publishing the deed.

(3) Where the foundation is created by a will, an extract of the

relevant part, duly authenticated, is to be delivered by a testamentary

executor or by the heirs

Provided that a testamentary executor may deliver the

same even before being confirmed by the Court to act as such.

(4) Where the foundation is created by a secret will the said

extract is to delivered by the Notary publishing the secret will or by

the heirs.

(5) The heirs mentioned in subarticles (3) and (4) who do not

intend to declare or who have not yet declared their intention to

accept the inheritance or who have accepted the inheritance with the

benefit of inventory shall nonetheless be liable for the delivery of the

said extracts but such delivery shall not of itself be evidence of the

acceptance or the unconditional acceptance of the inheritance.

(6) The said delivery is to be effected within three months

which period is to run -

(a)

if the foundation is created by a public deed, from

the date of such deed;

(b) if it is created by a public will, from the date of

death of the founder; and

(c)

if it is created by a secret will, from the date of the

publication of the will.

(7) The said delivery may be made by any one of the persons

mentioned in subarticles (2), (3) and (4), either personally or by an

authorized agent.

(8) On receipt of the documents mentioned in subarticle (1),

the Registrar shall -

(a)

register the foundation, on being satisfied that all the

provisions of this Sub-Title have been complied with; or

(b) refuse to register the foundation, informing the

applicant in writing of the reasons for such refusal.

(9) The Registrar shall have the right to require any

information from any person, if such information is deemed by him to

be necessary for registration of a foundation but, in the case of a

private foundation, shall not be entitled to request a copy of the

beneficiary statement from the administrators or the Notary Public

Provided that nothing in this subarticle shall limit any

powers of the Malta Financial Services Authority under applicable

law.

(10) If the delivery prescribed in subarticle (1) is not made

within the period established in subarticle (6), the persons mentioned

in subarticles (2), (3) and (4) shall be liable to a penalty, payable to

the Registrar, of one hundred liri each

Provided that no person shall be liable for failure to

observe this obligation if he is unaware of the death of the founder or

any other relevant fact.

(11) The provisions of article 636(2) and (3) of the Code of

Organization and Civil Procedure shall apply to the extracts

contemplated in this article.

(12) Without limiting the accessibility by persons with a

legitimate interest of the registration records of a private foundation

and all information therein contained as well as any changes thereto,

the Registrar shall implement procedures to ensure the privacy of

private foundations, their assets, activities and beneficiaries.

(13) The documents of private foundations, other than those

which are registered, which may be in the possession of the Registrar

shall not be made available to third parties without the prior written

consent of the administrators, the supervisory council, if any, or the

Court and only when it is satisfied that such third parties have a

legitimate interest in the information.

32. (1) A foundation may be established for the

achievement of a lawful purpose, including a social purpose, without

beneficiaries as provided in article 26(7). The Registrar shall not

register such a foundation unless the purpose is indicated in clear

terms.

(2) The founder, or if permitted by the statute, an other body or

person, may amend or add to the purpose of a foundation by means of

an additional public deed. After the death of the founder, the Court

may authorise such amendment or addition to the purpose on the

application of any administrator, supervisory council or other

interested party.

(3) The deed of foundation may indicate the way in which the

moneys or property of the foundation may be used for the attainment

of the purpose for which the foundation is established and when no

such indication is made the administrators may exercise their

discretion.

(4) The deed of a foundation may indicate how the assets of

the foundation are to be applied if its purpose is achieved, exhausted

or becomes impossible and when no such indication is made, the

administrators or the supervisory council may make specific

proposals to the Court for authorisation to use or dispose of the assets,

unless the founder amends the purpose in terms of subarticle (3). Any

disposal of assets shall be made only to another purpose foundation

with similar purposes.

(5) When the dominant purpose of a foundation is to support a

class of persons which constitute a sector within the community as a

whole, because of a particular social, physical or other need they may

have or disability they may suffer from, the indication of such a class

of persons or one or more members of such a class shall not render it

a private foundation but it shall be treated as a purpose foundation in

terms of this article.

32A. (1) A foundation may not be established to trade or Foundations not

carry on commercial activities, even if the proceeds of such efforts to

for trade.

are destined to social purposes, except that

(a)

a foundation may be endowed with commercial

property or a shareholding in a profit making enterprise, a

franchise, a trade mark or other asset which gives rise to

income, as well as a ship as long as the organisation is only the

passive owner of such assets;

(b) a foundation may, subject to such authorisations as

may be necessary under applicable laws, be used as a collective

investment vehicle, and issue units to investors therein, for the

passive holding of a common pool of assets, the management of

which is delegated to a third party, including a pension or

employee benefit arrangements; and

(c)

a foundation may be used as a vehicle for the

purpose of a securitisation transaction, borrow monies against

the issue of bonds and do all relative and ancillary acts.

(2) Nothing in this article shall hinder or limit in any way the

administrators from protecting the rights of the foundation in relation

to such assets or to delegating the management of such assets to a

third party.

(1) A foundation may be established for the private

benefit of one or more persons or of a class of persons and such

beneficiaries shall enjoy such benefits, and shall have legally

enforceable rights against the foundation, as may be stated in the

terms of the foundation and the provisions of this Schedule.

Foundations imply fiduciary obligations under this Code upon all

persons administering them.

(2) The interest of the beneficiary under a foundation shall be

deemed to be movable property even if it includes immovable

property.

(3) The benefit under a foundation is personal to the

beneficiary and subject to any applicable laws and only as stated in

the terms of the foundation, creditors, spouses, heirs or legatees of the

beneficiary may have rights only to the extent of the beneficiary’s

entitlements under the foundation and have no other rights in relation

to the assets of the foundation. Unless otherwise provided for in the

deed of foundation expressly, by the type of benefit granted to the

beneficiary or otherwise, upon the death of the beneficiary the

beneficiary’s entitlement under a foundation shall not devolve to his

heirs but shall terminate. If the foundation terminates for any other

reason at law the assets of the foundation shall, subject to the terms of

the foundation, devolve on the founder or his heirs at law.

(4) Private foundations must name

(a)

the class of persons entitled to benefit as clearly and

as fully as possible; or

(b) the person or persons entitled to benefit as clearly

and as fully as possible, by specifying first names, surnames,

identity card numbers, father’s name, mother’s name and

maiden surname and other relevant personal or family factors to

eliminate any doubt as to who the intended beneficiary is,

and if there are no beneficiaries identifiable or ascertainable as

aforesaid the foundation, the foundation shall be deemed to be for the

private benefit of the founders or their successors in title.

Such identification need not be made in the deed constituting

the foundation but may be made in a separate beneficiary statement in

accordance with article 29(4)(i) of this Schedule.

(5) Persons who are not yet conceived at the time of the

creation of a foundation may be named as beneficiaries or form part

of a class of beneficiaries but their rights arise only once they are born

viable.

(6) The founder of a foundation may also be a beneficiary.

(7) Subject to the terms of the deed of foundation, if the

founders are still alive and capable of acting they may freely amend

the deed and substitute, add or remove beneficiaries

Provided that no decision of a founder shall affect the

validity of anything lawfully done by the administrators prior to such

decision, before he receives notice of such amendment, nor shall it

affect or interrupt lawful acts in progress or lawful commitments

made and not yet fulfilled by the administrators.

(8) A beneficiary may be appointed -

(a)

subject to a condition; or

(b)

for a specified time; or

(c)

up to a specified value of benefit,

as a founder shall deem appropriate

Provided that, if the founder is deceased, a beneficiary may

apply to the Court requesting it to eliminate any condition or

requirement which is considered to be unreasonable paying regard to

all the circumstances

Provided further that persons unworthy of receiving under

a will cannot receive as beneficiaries under a foundation.

(9) The terms of the foundation may provide for the addition

of a person as a beneficiary or the exclusion of a beneficiary from

benefit at the discretion of the administrators.

(10) The terms of a foundation may make the interest of a

beneficiary -

(a)

liable to termination; or

(b)

subject to restriction on alienation or dealing; or

(c)

subject to diminution or termination in the event of

the beneficiary becoming bankrupt, or insolvent, or any of his

property becoming liable to seizure for the benefit of his

creditors; or

(d) not liable to attachment under a garnishee order

issued against the administrator or to termination without the

prior consent of the Court, when the interest is expressed to be

for the maintenance of the beneficiary or as a pension.

(11) Where the benefit consists in an annuity or pension or the

use and enjoyment of property and the enjoyment of fruits therefrom,

the terms of the foundation may make the interests of the

beneficiary -

(a)

subject to restriction on alienation or dealing;

(b) not liable to attachment under a garnishee order

served on the administrators as garnishees; or

(c)

not liable to termination without the prior consent of

the Court.

(12) When the administrator is granted the power to add a

beneficiary at his discretion, such power shall be valid on condition

that sufficient indication be given in the deed of foundation or in the

beneficiary statement as to the class of which the beneficiary forms

part. In the absence of such indication the power shall be null and

void.

(13) A person who may be appointed a beneficiary in terms of a

power or discretion granted to the administrator shall not enjoy any

rights in relation to the foundation or vis-à-vis the administrator and

shall not be considered a beneficiary in any manner until appointed as

a beneficiary by the administrator.

(14) It shall be lawful for an administrator to be granted the

power to decide at his absolute discretion, which beneficiaries are to

benefit, the quantity of any benefit, at what time and in what manner

beneficiaries are to benefit and such other powers relating to the

appointment, application or advancement of property of the

foundation.

(15) A beneficiary in whose favour a discretion to distribute or

appoint property may be exercised shall have no rights to specific

property of the foundation until such time as such discretion is

exercised by the appointment, application or advancement of such

property in his favour.

(16) A beneficiary may disclaim his whole interest in writing

and such a disclaimer shall be irrevocable.

(17) Subject to the terms of the deed of foundation, a

beneficiary may disclaim part of his interest, whether or not he has

received some benefit from his interest; in any such case, but subject

to the terms of the foundation, a disclaimer may, by the instrument by

which the interest is disclaimed, be made revocable, and shall then be

capable of revocation in the manner and under the circumstances

therein mentioned or referred to.

(18) Subject to the terms of the foundation, a beneficiary may,

by instrument in writing, sell, charge, transfer or otherwise deal with

his interest in any manner.

(19) Subject to the terms of the foundation, the following rules

shall apply where a foundation, or an interest under a foundation, is in

favour of a class of persons

(a)

a class closes when it is no longer possible for any

other person to become a member of a class;

(b) a woman who is over the age of fifty-five years shall

be deemed to be no longer capable of bearing a child;

(c)

where any class interest relates to income and for

any period there is no member of the class in existence, the

income shall be accumulated and, subject to article 29(7), shall

be retained until there is a member of the class in existence or

the class closes.

(1) The founder, or any other person with his consent, Augmentation

may add to the assets of a foundation by additional endowments at of fund.

any time.

(2) Third parties, with the concurrence of the founder, the

supervisory council, the administrators or, in default of such persons,

with the concurrence of the Court, may augment the endowment of a

purpose foundation by a new endowment

Provided that, when such augmentation by third parties is

made by means of a will, failing concurrence by the founders, the

administrators or the Court, such a testamentary disposition is to be

deemed to require the creation of a new foundation and the nominated

administrators shall proceed accordingly.

(3) The administrators shall be bound to file with the

Registrar, within three months from any grant, an inventory or

descriptive note of the assets added to a foundation but in the case of

cash endowments, only a certified copy of the relative bank deposit

statement shall be filed with the Registrar.

(4) In case of a purpose foundation, endowments made to such

foundations shall be deemed to be received for the purposes of the

foundation. In the event that endowments are received by such

foundation in a regular manner in terms of a scheme which is

registered with the Registrar, it shall not be required that the

administrators file a descriptive note on each occasion that an

additional endowment is made but that they shall file documentation

on endowments on an annual basis.

(5) Endowments may be granted under a condition, for a fixed

time or in accordance with express rules of a foundation. In the

absence of any indication every endowment shall be deemed to have

been made unconditionally.

(6) Endowments to purpose foundations shall be irrevocable

notwithstanding any term to the contrary in the deed of constitution.

(7) Unless expressly stated otherwise, endowments to

foundations shall be deemed to be irrevocable. The fact that an

endowment is stated to be revocable, unless otherwise stated in the

deed of constitution, shall not imply any limitation on the use or

appointment of the capital or income by the administrators. In the

case of revocation, the grantor shall only be entitled to the balance of

capital which may remain unutilised.

(8) Where an endowment is made by two or more grantors

jointly and expressed to be revocable such endowment may only be

revoked with the express consent of all the grantors.

(9) Revocation of an endowment shall not affect or invalidate

acts already carried out or interrupt acts in progress, nor affect

commitments made and not yet fulfilled. Revocation of an

endowment shall be suspended until such time as the administrators

certify to the Registrar that all commitments have been fulfilled and

shall be deemed to refer only to such amount as shall not have been

utilised in fulfilment of such commitment.

(10) The revocation of an endowment shall not imply the

termination of a foundation unless the effect of such revocation shall

result in the exhaustion of all the property of the foundation.

(11) If a foundation is the beneficiary of an endowment which

is granted for specific purposes different from those of the recipient

foundation, the administrators shall seek new instructions from the

grantor and if that is not possible they shall apply to the Court for

directions.

(12) The term "endowment" for the purposes of this Title shall

mean any grant of money or other property, including rights to money

or other property, existing or which may arise in the future.

(1) The persons named to be administrators of a Administrators

foundation may be juridical persons provided they have at least three of foundations.

directors.

(2) Purpose foundations shall have at least three

administrators or at least one juridical person acting as administrator.

(3) If the person nominated as an administrator in the

constitutive deed is unwilling or unable to accept such responsibility,

then he shall, within fifteen days, notify his intentions in writing to

the Registrar, the founder or his heirs and the persons named as

succeeding, if any. The taking of possession of any assets of a

foundation shall imply acceptance to act as an administrator thereof

and in such a case the administrator is bound to confirm his

acceptance in writing to so act on demand of any interested person or

the Registrar. Failure to do so within thirty days from a written

request shall be a breach of duty by the administrator.

(4) Any person named or appointed to succeed in

administration shall enter into the same obligations as if he were the

person named in the first place and shall notify the Registrar in

writing upon taking up office. It shall be lawful for an administrator

upon taking up office, but not later than thirty days after, to notify in

writing the Registrar and any interested parties of any reservations he

may have regarding anything relating to the foundation or the actions

of the previous administrators and he shall not be liable for any

matters so reserved until such time as the reservations are operative.

(5) When administrators, both those originally named or those

succeeding, have made any acts of administration, they are bound to

submit an account of their administration on relinquishing the

administration in addition to such accounts as are required to be

submitted in accordance with applicable law. Such account shall be

submitted to the succeeding administrators or in their absence to the

Registrar.

(6) Unless the deed of foundation provides otherwise,

administrators may be remunerated from the income or capital of the

foundation. Such remuneration shall be in such amounts and in such

manner as may be stated in the deed of foundation or in any

agreement between the founder and the administrator or in

accordance with applicable law. Remuneration may also be

established by the Court on application of the administrator or any

interested party.

(7) Subject to the provisions of subarticle (8), an administrator

may resign from office by notice in writing to his co-administrators

and in case of there being no other administrator, to the founder or to

the beneficiaries or, if impracticable, to at least one beneficiary, or if

there are none to whom notice can be given, to the administrator’s

duly appointed successor and the resignation shall take effect on

delivery of the aforesaid notice.

(8) A resignation -

(a)

given in order to facilitate a breach of duty, or

(b) which would result in there being no administrator

for the foundation,

shall have no effect; provided that an administrator may resign office

notwithstanding the provisions of paragraph (b), if, before the

resignation takes effect, application is made to the Court for the

appointment of a new administrator and a new administrator is so

appointed.

(9) An administrator shall cease to be an administrator

immediately upon -

(a)

the removal of the administrator by the Court;

(b) the coming into effect of a condition in the deed of

foundation in terms of which such administrator is removed

from office; or

(c)

steps are taken for the winding up of the

administrator when a legal person.

(10) An administrator ceasing to be an administrator shall, in

addition to the duty to account under subarticle (5), be bound to

immediately deliver all property of the foundation which may be in

his possession to the remaining or successor administrators and to

take all such formal or other actions as may be necessary in the

interest of the foundation.

(1) The founder, and such other persons who may be

designated in the deed of foundation, may exercise supervision over

the administration of a foundation, obtain a copy of the accounts held

by the administrators, a copy of the inventory or descriptive notes of

property, and may intervene in the matter of appointment of

administrators or in the disposal of the assets, when these issues are

being dealt with by the Court.

(2) A founder may be an administrator of a foundation.

(3) The founder may also be the beneficiary of a private

foundation during his lifetime

Provided that when the founder is a beneficiary, such

founder may not at the same time act as the sole administrator of such

a foundation.

(1) The terms of the foundation may provide for the Supervisory

establishment of a supervisory council consisting of at least one structure

protectors.

member or for the office of a protector or protectors with similar

functions.

(2) The members of the supervisory council or protectors shall

be appointed by the founder in the statute of the foundation or

subsequently. The deed of foundation may also provide for eventual

substitution or replacement of the members of the supervisory council

or protectors.

(3) The supervisory council or protectors shall not be

considered to be administrators.

(4) Subject to the terms of the foundation, the supervisory

council or protectors shall have the power to exercise supervision

over the acts of the administrators and may be vested with the power

of appointment, removal, substitution or addition of administrators.

(5) The exercise of any action or discretion on the part of the

administrators may be subject to the express consent of the

supervisory council or the protectors.

(1) An administrator shall, so far as is reasonable and Rights of the

within a reasonable time of receiving a request in writing to that beneficiaries.

effect, provide full and accurate information as to the state and

amount of the foundation property, including the accounts of the

foundation, and subject to subarticle (2), the conduct of the

administration to -

(a)

the founder;

(b)

the Court;

(c)

the supervisory council or protectors;

(d) any other person who is vested with such right in the

deed of foundation;

(e)

subject to the terms of the foundation, any

beneficiary of the foundation who is of full age and capacity, or

if a minor, to his lawful guardian or representative;

(f)

subject to the terms of the foundation, any other

purpose organisation or charitable trust referred to by name for

the benefit of which the foundation was established; and

(g) in case of a foundation established for a purpose, the

Attorney General or the relevant authority under applicable law.

(2) Subject to the terms of the foundation and to any order of

the Court given for special reasons, an administrator or any other

person shall not be required to disclose to any person any document

or information relating to a private foundation which -

(a)

discloses the administrator’s deliberations as to the

manner in which a power or discretion was exercised, or a duty

conferred or imposed by law or by the terms of the foundation

was performed;

(b) discloses the reason for any particular exercise of

such power or discretion or performance of duty or the material

upon which such reason will be or might have been based;

(c)

relates to the exercise or proposed exercise of such

power or discretion or the performance or proposed

performance of such duty.

(3) Unless the terms of the foundation expressly determine the

time when and the method how beneficiaries are to be informed of

their entitlement under the foundation, the administrator shall be

obliged to inform any beneficiary of his entitlement, in writing,

within a reasonable time of his accepting to act.

(4) When the terms of the foundation grant a discretion in

terms of article 33(9) of this Schedule, the terms of the foundation

may suspend, until such time as a discretion is exercised in their

favour, the duty of the administrator to inform such beneficiaries that

they may benefit under the foundation or that they form part of a class

of beneficiaries which may so benefit. The terms of the foundation

may also indicate the time when and the method of how such

beneficiaries are to be informed.

(5) If the deed of foundation expressly provides for the

notification of information to beneficiaries or to those persons that

form part of a class from among which beneficiaries may be

appointed, without reference to any point in time, ascertained or

ascertainable, such term shall be construed as implying a duty of the

administrator to inform such beneficiaries within a reasonable time

after the death of the founder.

(6) Should the administrator consider providing information as

required by the preceding subarticles to be prejudicial to the

beneficiaries of the foundation or any of them, the administrator may

apply to the Court and the Court may release the administrator from

the obligation to inform under such conditions as it may consider

appropriate.

(7) The duty to inform as above provided shall not arise if the

administrator is in possession of information which reasonably

demonstrates that those entitled to such information have already

been informed or are already aware of such information.

(8) In the case of a purpose foundation, the duty to inform

either unnamed beneficiaries forming part of a class or persons

forming part of a class of persons who may be appointed as

beneficiaries in terms of a power of the administrator, shall not arise

notwithstanding the terms of the foundation unless, in case of the

unnamed beneficiaries the administrator establishes that there exist

less than ten beneficiaries appertaining to such class of beneficiaries.

Furthermore, in the absence of any indication to the contrary, the

unnamed beneficiaries or persons who may be added as beneficiaries

in terms of a power shall be assumed to be persons who carry on

relevant social or other activities principally in Malta.

(9) The administrator shall carry out the duty to inform to the

best of his abilities and at the expense of the foundation and in the

event it appears to the administrator that such exercise will be too

costly or burdensome, the administrator may apply to the Court for

directions and the Court shall be empowered to release the

administrator from such duty under such conditions as it considers

appropriate.

(10) The suspension of the duty of an administrator to inform

beneficiaries as provided in this article shall not reduce the rights of

beneficiaries or the duties and liability of the administrator towards

such beneficiaries in terms of this Schedule or other applicable law.

(11) Persons who may be added as beneficiaries in terms of a

power referred to in article 33(12) of this Schedule shall have no right

of information until such time as they are appointed beneficiaries by

the administrator pursuant to such power.

(1) When there is more than one founder, initial or

subsequent, rights shall be exercised in accordance with the statute.

When the statute is silent, in case of two founders, decisions will be

taken unanimously and when there are more than two founders, in

accordance with the decision of the majority.

(2) In multi-founder foundations the rules on general meetings

according to the provisions of article 52 of this Schedule shall mutatis

mutandis apply.

(1) Subject to subarticle (2) unless expressly provided

otherwise in the statute or in this Title, a foundation shall not be

subject to revocation prior to the term for which it is established.

(2) Unless the founder has expressly excluded such a right, a

private foundation may be terminated on the demand of all the

beneficiaries of the foundation provided they are all in existence,

have been ascertained and no one of them is an interdicted or a minor.

If the founder is still alive his consent shall be required for revocation

by the beneficiaries. The founder may subject termination to the

consent of a person stated in the statute.

(3) Notwithstanding anything stated in the statute, after the

death of the founder, the Court shall have the power to dissolve and

wind up any private foundation when requested by all the

beneficiaries of the foundation if it is satisfied that the continuance of

the foundation is no longer necessary to achieve the intentions of the

founder.

(4) The statute of a foundation may provide that it is

revocable

Provided that revocation shall not affect or invalidate acts

already lawfully carried out or interrupt lawful acts in progress. Nor

shall revocation affect lawful commitments made and not yet

fulfilled. Termination upon revocation shall be suspended until such

time as the administrators certify to the Registrar that all lawful

commitments have been fulfilled.

(5) The express reservation by the founder of the right to

revoke a foundation shall not be exercisable by the heirs or spouse of

such founder unless expressly provided otherwise in the deed of

foundation. Without prejudice to any other remedies available at law,

creditors of the founder may not exercise the right to revoke a

foundation.

(6) Purpose foundations may only be constituted in an

irrevocable manner and any clause in the statute reserving the right to

revoke the foundation shall be disregarded

Provided that a power of the administrators to apply the

proceeds to another purpose when the stated purpose has been

achieved or is no longer possible shall be valid

Provided further that the reservation by the founder of a

right to maintenance for himself and his immediate family, in case of

need, from the funds of the foundation established by such founder

shall also be valid and in such case the Court shall have the exclusive

right to determine whether the funds of the foundation may be used

for such maintenance.

(7) When a foundation is terminated, the procedures in article

59 of this Schedule for voluntary winding up of an organisation shall

be observed.

(8) Except in cases contemplated in article 47(2), where a

foundation is converted into a trust, termination of registration shall

imply termination of the foundation and upon notice or upon

otherwise becoming aware thereof, the Registrar shall proceed to

strike off the foundation.

(9) The administrators shall have a duty to maintain the

registration of a foundation in the absence of any of the circumstances

provided for in this article.

The Court shall have jurisdiction in relation to Powers of the

foundations, their administrators, beneficiaries and other parties Civil

its voluntary

jurisdiction in

having an interest therein.

relation to

foundations.

(1) Subject to the provisions of subarticle (3) the Court Variation of the

terms of the

may, if it thinks fit, by order approve on behalf of -

deed of

foundation by

any person incapacitated at law having directly or the

(a)

approval of

indirectly, an interest, whether vested or contingent, under the particular

transactions.

foundation; or

(b) any person, whether ascertained or not, who may

become entitled, directly or indirectly, to an interest under the

foundation as being at a future date or on the happening of a

future event a person of any specified description or a member

of any specified class of persons; or

(c)

any person unborn; or

(d) any person in respect of any interest of his that may

arise to him by reason of any discretionary power given to any

one on the failure or determination of any existing interest that

has not failed or determined;

any arrangement, by whomsoever proposed and whether or not there

is any other person beneficially interested who is capable of assenting

thereto, varying or revoking all or any of the terms of the foundation

or enlarging the powers of the administrators of managing or

administering any of the foundation’s property.

(2) The Court shall not approve an arrangement on behalf of

any person coming within subarticle (1)(a), (b) or (c), unless it is

satisfied that the carrying out of such arrangement appears to be for

the benefit of that person.

(3) Where in the management or administration of a

foundation, any sale, lease, pledge, charge, surrender, release or other

disposition, or any purchase, investment, acquisition, expenditure or

other transaction is in the opinion of the Court expedient but the same

cannot be effected by reason of the absence of any power for that

purpose vested in the administrator by the terms of the foundation or

by law, the Court may confer on the administrator, either generally or

in any particular circumstance, a power for that purpose on such

terms and subject to such provisions and conditions, if any, as it

thinks fit, and may direct in what manner and from what property any

money authorised to be expended, and the costs of any transaction,

are to be borne.

(4) An application to the Court under this article may be made

by the administrator or by any beneficiary.

(1) An administrator may apply to the Court for

directives concerning the manner in which he may or should act in

connection with any matter concerning the foundation and the Court

may make such order, if any, as it thinks fit.

(2) The Court may also, if it thinks fit -

(a)

make an order concerning

(i) the execution or the administration of any

foundation; or

(ii) the administrator of any foundation, including

an order relating to the exercise of any power, discretion or

duty of the administrator, the appointment or removal of an

administrator, the remuneration of an administrator, the

submission of accounts, the conduct of the administrator

and any payments into the Court; or

(iii) any beneficiary or any person having any

connection with the foundation;

(b) make any declaration as to the validity or

enforcement of a foundation;

(c)

rescind or vary any order or declaration made under

this Title, or make any new or further order or declaration.

(3) An application to the Court for an order or declaration

under subarticle (2) may be made by the administrator or by any

beneficiary or by the Attorney General or by any other person having

a lawful interest

Provided that in cases where the duty to inform a

beneficiary of his interest in a foundation has been suspended in

terms of article 36 of this Schedule and until such suspension is in

force, and in the absence of any other person appointed to supervise

the administration of a foundation, the founder of a foundation may

also make an application to the Court in terms of this subarticle.

Whilst dealing with such application the Court may determine

whether the suspension of rights to information as aforesaid be

maintained in force in full or in part for all or some of the

beneficiaries.

(4) Where the Court makes an order for the appointment of an

administrator or administrators it may impose such conditions as it

thinks fit.

(5) Subject to any order of the Court, an administrator

appointed by the Court under this article shall have the same powers,

discretion and duties as if he had originally been appointed an

administrator by the deed of foundation.

(6) Where any Court makes an order on the demand of a

beneficiary who has been prejudiced as a result of bad faith on the

part of the administrator in the operation of a foundation, the Court

shall have the power to restore the position to what it would have

been had the action complained of not been taken or otherwise to

protect his interests.

(7) When a person domiciled in Malta is obliged to pay

maintenance in terms of this Code and is a beneficiary under a

foundation, the Court shall have such powers as are necessary to

review the exercise of discretion by the administrator to give due

consideration to the rights of persons entitled to claim maintenance.

(1) There shall be no appeal from any decree, order,

declaration or direction of the Court given under the provisions of this

Schedule.

(2) Such decrees, orders, declarations or directions shall

remain in force until they are substituted or varied by the Court in

either its voluntary or contentious jurisdiction.

(3) During the hearing of an application before the Court the

administrator or applicant shall at the earliest opportunity disclose to

the Court all material facts known to him which may be relevant to

the application including the existence of any res judicata or pending

judicial action given or commenced in Malta or before a foreign

court.

(4) All applications to the Court shall be notified to the

administrator and the applicant shall furthermore notify all persons

who he considers having an interest in the subject matter of the

application. The Court shall have the power to order notification to all

other persons who it considers may have an interest as it deems fit.

(5) The Court shall hear the administrator and any interested

parties as it considers appropriate.

(6) Without prejudice to any other power given to the Court by

virtue of the foregoing provisions of this article or of any other law,

where an administrator neglects or refuses to perform any duty or to

comply with any order of the Court, the Court may, on such terms and

conditions it may deem appropriate, order that the required action be

executed, made or done by such person as the Court may appoint for

the purpose, at the cost of the administrator in default, or otherwise as

the Court may direct; and anything so executed, made or done shall

operate and have effect for all purposes as if it had been executed,

made or done by the administrator.

(1) All proceedings under these articles in relation to a

private foundation shall be held in camera and only the parties to the

proceedings, the administrators, the beneficiaries, if they prove they

have an interest in the proceedings to the satisfaction of the Court,

and their respective advocates and legal procurators shall be allowed

in Court during the hearings.

(2) Any decree or judgement of the Court shall preserve the

confidentiality of the proceedings and shall only reveal such facts as

may be necessary to make the same intelligible and enforceable by

the parties and the administrators.

(3) All applications, responses, affidavits, opinions,

statements and other documents or evidence shall be kept by the

Registrar of the Court in a confidential manner and no access shall be

given thereto except with the written consent of the Court.

(4) When information, or a document or information therein,

is considered to be confidential by a party to any proceedings in

relation to other parties to the proceedings it shall be lawful for the

Court to hear only such party prior to ordering the disclosure or

otherwise of such information and if the Court is satisfied that the

other party or parties to the proceedings have no interest in the

information considered to be confidential or that it has no bearing on

the matter being addressed by the proceedings, the Court shall order

that such information shall not be disclosed in the proceedings.

The Board established under article 29 of the Code of Rules of Court.

Organization and Civil Procedure may make Rules of Court Cap. 12.

concerning applications made under or in terms of this Sub-Title.

(1) It shall be lawful to convert a foundation into a trust Conversion of

foundations into

and a trust into a foundation

trusts and vice

versa.

(a)

with the consent in writing of

(i)

all trustees or administrators, as the case may

be; and

(ii) all beneficiaries with fixed interests under the

trusts or having similar rights under the foundation; and

(iii) any other person appointed in the trust

instrument or deed of foundation, as the case may be,

whose consent may be required for the taking of material

decisions in relation to the relevant assets; and

(b) by executing a deed of foundation or instrument of

trust in the appropriate form and with content so as to faithfully

reflect the intentions of the settlor of the trusts or the founder of

the foundation and the rights of beneficiaries as the case may

be.

(2) When a foundation is converted into a trust, the trustees of

the trust shall be bound to cancel the registration of the foundation

within thirty days of the receipt of all consents required in the

preceding subarticle and this by the filing with the Registrar of a

notice as may be prescribed.

(3) When a trust is converted into a foundation, the

administrators of the foundation shall be bound to execute a public

deed and register the foundation within thirty days of the receipt of all

consents required by this article and this by the filing with the

Registrar of the documents required by this Schedule.

Sub-Title III

Of Associations

(1)

An association may be established

(a)

for the purposes of promoting private interests;

(b)

for the purposes of promoting a trade or profession;

(c)

for the achievement of a social purpose; or

(d) for the carrying on of any lawful activity on a non-

profit making basis.

(2) When established for the promotion of a private interest an

association of persons shall be regulated by -

(a)

the provisions of Title X of Part II of Book Second

of this Code relating to civil partnerships;

(b)

the special laws relating to commercial partnerships;

(c)

the special laws relating to particular professions;

(d) the special laws relating to unions and employer

associations; and

(e)

the special laws relating to co-operatives,

as the case may be.

(3) When an association is established for the promotion of

other private interests which are identified in any special law

regulating the form or purpose of such association, such association

shall be regulated by the provisions of such special law.

(4) When established for the achievement of a social purpose

or as a non-profit making organisation, an association shall be

regulated by the provisions of this Title and the provisions of any

special law relating to voluntary organisations.

(5) Subject to article 6 of this Schedule, all associations shall

be eligible to register under the provisions of this Title.

(1) An agreement establishing an association shall be in Form and

contents of the

writing, on pain of nullity.

statute.

(2) The statute shall state the following for the association to

be eligible for registration

(a)

the name;

(b)

the registered address, in Malta;

(c)

the purposes or objects;

(d) the method or process by which membership of the

association is granted to applicants;

(e)

the mode of procedure during general meetings;

(f)

the composition of the board of administration and

the names of the first administrators;

(g) the manner in which administrators are elected to

and removed from office;

(h)

the legal representation;

(i)

in case of an association, the administrators of

which are non-residents of Malta, the name and address of a

person resident in Malta who has been appointed to act as the

local representative of the association in Malta; and

(j)

the term for which it is established, if any.

(3) The statute shall be signed by the associating persons and

any person subscribing to the statute after an association is

established shall be deemed to have consented to all the provisions of

the statute and all rules which may have been validly promulgated by

the association until such date. In the event that more than three

persons wish to establish an association, a statement may be made of

this fact in the statute and the signature of three persons on behalf of

all associating members stated in a schedule to the statute shall be

sufficient to indicate the consent of all stated persons.

(4) The written consent of the administrators named in the

statute to act as administrators of the association must be delivered to

the Registrar prior to registration of any association.

(1)

The statute of an association must clearly specify a Purposes.

purpose.

(2) The assets of an association may originate from any lawful

business or activity and may consist of present or future assets of any

nature.

(3) Failure to specify a purpose shall result in the nullity of the

agreement and the Registrar shall not accept to register such an

association until such time as the purpose is clear and unambiguous.

(4) The members of an association may add to the purpose for

the achievement of which the association was originally created, by

extending it to cover such other purposes of a similar nature as are

clearly set down in a second written instrument consented to by such

number of members as is necessary to amend the statute.

(5) A social purpose association may not have its purpose

changed or extended to other purposes which are not also social

purposes and a non-profit-making association cannot change its

statute to an organisation promoting a private interest.

(6) A restriction on the number of members which is

proportionate to the physical and other resources of an association

from time to time or the existence of a membership committee with

the power to accept or refuse new members in an association, shall

not, on its own, imply that such association is one for private benefit.

(1) For the purpose of registration of an association an

authentic copy of the constitutive instrument is to be delivered to and

filed with the Registrar by the administrators.

(2) Where the association is created by a public deed an

authentic copy thereof may be delivered by the administrators

provided for in the said deed (when they have accepted to act as such)

or the Notary publishing the said deed and the delivery by any one of

them shall suffice.

(3) On receipt of the documents mentioned in subarticle (1),

the Registrar shall register the association on being satisfied that all

the provisions of this Sub-Title have been complied with.

(1) A general meeting for all members shall be

convened at least once every year. At this meeting the annual report

and the accounts of the association as approved by the administrators,

as well as the report of the auditors or reviewers, shall be presented

and discussed.

(2) Other meetings may be convened by the administrators

whenever they consider it necessary or when they have a request in

writing signed by at least ten per cent of the members. If the

administrators fail to convene a meeting when so requisitioned, the

Court can order the meeting to be held and shall state the time and

place of the meeting which shall be binding on the administrators.

(3) In the absence of specific provisions in the statute, at

meetings of the members, decisions shall be taken by the majority of

those present at the meeting except that

(a)

when decisions are taken on the amendment of the

statute such decisions must be supported by at least fifty-one per

cent of all the registered members on the basis of one vote per

member;

(b) when decisions are taken to terminate the

association or to donate to another organisation all of its assets,

such decision must be supported by at least seventy-five per

cent of all the members; and

(c)

when decisions are taken on the approval of

accounts or matters involving the role or responsibilities of the

administrators, the administrators shall not be entitled to vote.

(4) Members may appoint proxies to attend a general meeting

on their behalf and such proxy shall have the right to vote in addition

to his own if he is a member.

(5) When any members use their right to request a meeting in

terms of this article, it shall not be lawful for the administrators or the

association to dismiss, retire or otherwise limit or reduce the rights of

those members until after the holding of the requested meeting.

(1) Unless otherwise stated or implied by the statute it Administrators.

shall be presumed that the administrators must be members of the

organisation except in the case where the administrators are engaged

under a contract of employment.

(2) The provisions of article 35 of this Schedule shall mutatis

mutandis apply to administrators of associations.

(1)

Members of associations are those persons who

Members.

(a)

subscribe to the purposes of the association;

(b) meet the personal status or qualifications for

membership as set out in the statute;

(c)

provide the necessary membership details;

(d) pay such membership fee as may be applicable or

otherwise fulfil such conditions on participation as may be

required by the statute or rules of the organisation; and

(e)

are otherwise admitted by the membership

committee or a committee authorised by the general meeting of

members to admit new members, if any.

(2) Every person who is a member of an association shall be

free to leave the association and such member cannot be subjected to

any liability, other than for unpaid fees, on leaving an association

Provided that in an unregistered association, when a

member leaves the association, this does not affect his liability under

the applicable law for the period while he was a member but he shall

not be liable in relation to any activities of the association after such

time.

(3) If the number of paid up members of an association falls

below three, the administrators are bound to proceed with a written

call for payment of dues to the members informing them that non-

payment will lead to termination under this provision and on the lapse

of the said period, with the termination of the registration of such

association in terms of this Title.

(4) Any expulsion procedure in a statute, except for failure to

pay membership fees or to comply with other purely formal

conditions of membership, should cater for

(a)

the non-participation of persons with an interest in a

dispute, in the decision to expel;

(b) the right of the member whose expulsion is sought

to make submissions to the persons who are empowered to

decide.

(5) If the statute of an association does not provide for the

procedures mentioned in subarticle (4), the administrators shall be

bound to implement a procedure which respects the rules stated in the

previous subarticle

Provided that when an organisation’s administrators are

involved in the dispute and cannot find independent members to

adjudge a motion of dismissal, reference shall be made to the Court

on such issue.

(6) The membership of a person in an association established

for a social purpose or as non-profit making is not transferable or

subject to inheritance.

(7) Members may not have patrimonial rights to the assets of

an association established for a social purpose or as non-profit

making and are not entitled to any compensation on retirement or

expulsion or on winding up of the association.

(1) The provisions of article 34 of this Schedule shall Endowments.

apply to endowments to associations.

(2) Membership fees are not endowments and shall not be

treated as such nor shall they be refundable except as expressly stated

in the statute.

(1) An association shall exist until it is terminated in Termination.

accordance with the provisions of its statute or in terms of this Title

unless the members, upon being given thirty days’ written notice of

termination by the administrators, amend the statute to establish other

purposes to which the property of the association may be dedicated.

(2) The termination of an association shall not affect or

invalidate lawful acts already carried out nor interrupt lawful acts in

progress. Nor shall termination affect lawful commitments made and

not yet fulfilled. Termination shall be suspended until such time as the

administrators certify to the Registrar that all lawful commitments

have been fulfilled.

(3) In the case of associations established for a social purpose

or as non-profit making, any assets on termination must be donated

by the administrators to another organisation with similar purposes

and failing such action, subject to the power of the Court to give

directions, they shall be disposed of in favour of such organisation as

may be designated by the Minister responsible for social policy by

notice published in the Gazette which shall apply the same to a

similar purpose or as may be provided in applicable law.

(4) Termination of registration shall not imply the termination

of the association which shall occur only upon the express

determination to that effect by the members in accordance with the

statute of the association or, in the other cases of termination, as is

provided for in this Schedule.

Title IV

OF WINDING UP OF ORGANISATIONS

(1) An organisation may request the termination of its

registration by means of a written request signed by all its

administrators or as otherwise required by its statute, and rendering a

statement of accounts, declaring the assets and liabilities of the

organisation and stating how they are to be dealt with on termination

of registration.

(2) The termination of registration shall not imply the winding

up of an organisation. Organisations may continue as unregistered

organisations subject to the application of the relevant rules of this

Schedule.

(3) Any interested party or any competent authority may, in

accordance with the provisions of this Title, apply to the Court for the

termination of registration and, or the cessation of an organisation.

(4) The termination of registration of an organisation on the

order of the Court, on the basis of grounds which imply that the

organisation may no longer operate, shall include an order by the

Court requiring the cessation of such organisation as a legal person

and as an organisation. In such a case such organisation may not

continue to exist as an unregistered organisation.

(1) An organisation may be wound up voluntarily or by

order of the Court.

(2) In this Sub-Title, the term "organisation" includes both

those organisations which are registered and those which are not.

(1) An organisation is wound up voluntarily by

following the procedures laid down in the statute of the organisation.

Unless otherwise stated, the winding up of an organisation shall

require the support of a majority of all members, in case of an

association, or a majority of all administrators, in case of a

foundation.

(2) A certified copy of a winding up resolution shall be

delivered to the Registrar within fourteen days from when it is passed.

(3) An organisation may be wound up voluntarily only if its

assets exceed its liabilities and all its debts have been paid. The

administrators shall prepare a scheme of distribution of the remaining

assets of the organisation which shall be notified to the Registrar and

all interested parties. It shall require approval by members, or in case

of foundations, by the founder or the beneficiaries, as the case may

be, or in their absence the Registrar, before being implemented.

(1) In the absence of a clear statement in the statute of a Disposal of

purpose organisation, as to how assets are to be disposed of on assets

winding up.

termination of the organisation, the administrators may apply for

directions and shall dispose of the assets as ordered by the Court.

(2) In case of dissolution and winding up of any private

organisation and in the absence of an indication in the constitutive act

how assets are to be distributed in case of winding up, the assets shall

be paid to the beneficiaries or returned to the founder’s estate, after

payment of all expenses, as may be determined by the Court after

hearing the proposals of the administrators, the beneficiaries and any

other interested persons, keeping in view the intentions of the

founder. Unless the Court is satisfied that the founder intended the

assets to be available to the beneficiaries, the assets shall be returned

to the founder or his heirs at law.

The administrators of an organisation shall be bound to Dissolution and

dissolve and wind up an organisation when the term for which it has winding

when term

been created, if any, has expired or if its purpose has been achieved or expires, etc.

becomes impossible. The founder or members may amend the statute

at any time, even after such event, to remove the reason for

dissolution as stated by this article, in which case any determination

of the administrators and any dissolution proceedings shall be

terminated and shall have no effect.

(1) An organisation shall be wound up on order of the Winding up by

Court, upon the application from any interested party, for reasons order

court.

valid at law in terms of its statute or this Schedule.

(2) The Court may order the winding up of an organisation on

an application to this effect if it considers it necessary in the public

interest or if the provisions of this Schedule or any other laws are not

being observed by the organisation and the Court considers the

situation to be so grave as to merit such an order, the ordinary

remedies for breach of laws not being sufficient in the circumstances.

(3) In the case of a private foundation, the power to request its

winding up in terms of this article shall be exercisable also by the

Malta Financial Services Authority.

(4) In the case of a purpose foundation which makes public

collections, the power to request its winding up in terms of this article

shall be exercisable by any member of the public.

The Court shall outline the reasons for any order given Appeal.

under the preceding article and steps to be taken in relation to all

assets of any relevant organisation, including the appointment of a

liquidator for such organisation. The administrators and any person

interested shall be entitled to appeal to the Court of Appeal within

fifteen days of any such order.

(1) If an organisation becomes insolvent or is

undergoing serious difficulties which impede the organisation from

operating and achieving its aims, the administrators shall cease

operations and notify the Registrar who shall immediately co-operate

with the administrators to appoint a liquidator to wind up the affairs

in the interest of creditors, the promoters or beneficiaries of the

organisation and the organisation itself.

(2) In this Title "insolvency" shall mean the inability to pay its

debts when due and for three months after a debt is judicially

acknowledged or admitted or if it is proved to the satisfaction of the

Court that the organisation is unable to pay its debts, account being

taken of its assets and liabilities, including contingent and prospective

liabilities.

(3) If the organisation does not have any administrators for

more than six months and suitable persons are not appointed by the

Court on the application of any interested person, the Registrar shall

proceed to demand from the Court an order for the winding up of the

organisation and the appointment of a liquidator. In the case of a

private foundation such power to apply to the Court shall also be

vested in the Malta Financial Services Authority.

(4) Upon such order, the liquidator shall take over all assets of

the organisation and shall notify all creditors, if necessary by means

of public notices, and shall seek appropriate solutions to any issue

which may arise. The liquidator shall have the power to dispose of all

assets and pay all debts, observing the ranking order of creditors as

provided by law in making payments to creditors.

(5) The liquidator shall consult the Court which shall give

directions from time to time for the resolution of disputes and the

distribution of assets. The liquidator and any creditor may apply to

the Court at any time for orders in the liquidation. The Court shall

have the power to give any orders it deems appropriate.

(6) The same rules shall mutatis mutandis apply in cases

where organisations have been found to be operating illegally or are

abandoned and the Registrar is unable to obtain the co-operation of

the administrators or other interested persons for the formal winding

up of the organisation.

On receipt of a declaration by the administrators or Cancellation of

liquidators or on otherwise being satisfied that all assets have been registration.

appropriately exhausted as required by law and that all assets have

been distributed in accordance with the approved scheme of

distribution, the Registrar shall cancel the registration of the

organisation which shall thereby be struck off the Register and the

organisation shall thereafter cease to exist.

Should it result that the assets or liabilities of an Revival of

organisation which has been cancelled were not determined or dealt registration.

with, distributed, paid out or otherwise liquidated, the Court shall

have all necessary powers to revive the organisation, and any cell

thereof, only for the purpose of determining and dealing with or

distributing or liquidating such assets or liabilities.

The winding up of an organisation shall not affect the Effects of

continuing validity or effect of another organisation established by it. winding

groups of

In such a case the role of the founding organisation, if any, shall be organisations

and cells.

carried out by the successor in title of the organisation or by such

person or persons as may be appointed by the Court. For an

organisation to be wound up any segregated cells which may be in

existence must be wound up prior to the winding up of the

organisation.

Passed by the House of Representatives at Sitting No. 552 of the

17th July, 2007.

A NTON T ABONE

Speaker

R ICHARD J. C AUCHI

Clerk to the House of Representatives