ACT No. XV of 2007 AN ACT of 2007 to amend the Companies Act (Cap. 386) BE IT ENACTED by the President, by and with the advice of the House of Representatives, in this present Parliament assembled, and by the authority of the same as follows>-

I assent.

E DWARD F ENECH A DAMI

(L.S.)

President

24th July, 2007

ACT No. XV of 2007

AN ACT of 2007 to amend the Companies Act (Cap. 386)

BE IT ENACTED by the President, by and with the advice of the

House of Representatives, in this present Parliament assembled, and by

the authority of the same as follows>-

(1) The short title of this Act is the Companies (Amendment)

Act, 2007, and it shall be read and construed as one with the Companies

Act, hereinafter referred to as “the principal Act”.

(2) This Act shall come into force on such date or dates as

the Minister responsible for finance may, by notice in the Gazette,

appoint, and different dates may be so appointed for different provisions

and for different purposes of this Act.

In subparagraph (iii) of paragraph (b) of sub-article (3) of article

2 of the principal Act, for the word “shares”, there shall be substituted

the word “securities”.

Article 6 of the principal Act shall be amended as follows>

(a) for the marginal note thereto there shall be substituted

the following marginal note>

“Indication of particulars in business letters, order forms,

websites etc.”<

(b) for sub-article (1) thereof, there shall be substituted the

following>

“(1) In all its business letters and order forms, whether

they are in paper form or in any other medium, as well as on

its internet website or websites, if any, a commercial

partnership shall mention in legible characters its name, kind

of commercial partnership, registered office and registration

number.”<

(c) for sub-article (2) thereof, there shall be substituted the

following>

“(2) In all its business letters and order forms, whether

they are in paper form or in any other medium, as well as on

its internet website or websites, if any, in respect of the branch

or place of business in Malta, a body corporate registered

under Part XI of this Act shall mention in legible characters

its name, the country of its constitution or incorporation, its

registration number and registered office in its country of

constitution or incorporation, kind of commercial partnership,

the address of the branch or place of business in Malta, its

registration number under Part XI of this Act and, where

applicable, the fact that the oversea company is being wound

up.”<

(d) for sub-article (3) thereof, there shall be substituted the

following>

“(3) In all its business letters and order forms, whether

they are in paper form or in any other medium, as well as on

its internet website or websites, if any, a partnership en nom

collectif shall also state in legible characters the names of its

partners in addition to the requirements of sub-article (1).”<

(e) for sub-article (4) thereof, there shall be substituted the

following>

“(4) In all its business letters and order forms, whether

they are in paper form or in any other medium, as well as on

its internet website or websites, if any, a partnership en

commandite or limited partnership shall also state in legible

characters the names of the partners having unlimited liability

in addition to the requirements of sub-article (1).”<

(f) the present sub-articles (8) and (9) thereof shall be

renumbered as sub-articles (9) and (10) respectively<

(g) immediately after sub-article (7) thereof, there shall be

added the following new sub-article (8)>

“(8) Where a reference is made to the capital of a

company in the documents or internet websites referred to in

the preceding sub-articles, that reference shall include a

reference to both the issued and the paid up capital.”< and

(h) in sub-article (9), as renumbered, immediately after the

words “the provisions of sub-articles (1) to (6)”, there shall be

inserted the words “and of sub-article (8)”.

Article 49 of the principal Act shall be amended as follows>

(a) for sub-article (1) thereof, there shall be substituted the

following>

“(1) On the approval of the accounts, the liquidator

shall deliver to the Registrar for registration a notice of such

approval and the Registrar shall thereupon register it. Subject

to the provisions of Article 21 in relation to the period

established in sub-article (1) thereof and to the rights of

creditors under sub-article (2) thereof, the Registrar shall strike

the name of the partnership off the register and shall forthwith

publish a notice of completion of the winding up and of such

striking off.”< and

(b) for sub-article (2) thereof, there shall be substituted the

following>

“(2) Where the manner in which the partnership is to

be wound up is provided for in the deed of partnership or is

determined by agreement between the partners, it shall be the

duty of the partners to deliver to the Registrar for registration

a notice, signed by all of them, that the winding up has been

completed and the Registrar shall thereupon register it. Subject

to the provisions of Article 21 in relation to the period

established in sub-article (1) thereof and to the rights of

creditors under sub-article (2) thereof, the Registrar shall strike

the name of the partnership off the register and shall forthwith

publish a notice of the completion of the winding up and of

such striking off.”.

Article 66A of the principal Act shall be amended as follows> Amendment of

article 66A of the

principal Act.

(a)

in sub-article (1) thereof>

(i) for the words “a partnership en commandite or

limited partnership which in the deed of partnership”, there

shall be substituted the words “a partnership en commandite

or limited partnership the capital of which is divided into

shares which in the deed of partnership”< and

(ii) for the words “and which qualifies as a collective

investment scheme and is duly licensed in terms of the

Investment Services Act,”, there shall be substituted the words

“and which qualifies as a collective investment scheme and

is duly licensed, recognised, exempted or otherwise regulated

in terms of the Investment Services Act”<

(b) in sub-article (2) thereof>

(i) for the words “by the provisions of Part IV of this

Act”, there shall be substituted the words “by the provisions

of this Part of this Act”< and

(ii) in the proviso, for the words “or Part IV of this

Act,”, there shall be substituted the words “or this Part of this

Act,”<

(c) in sub-article (3) thereof, for the words “and of Part IV

of this Act”, there shall be substituted the words “and of this Part

of this Act”.

In article 72 of the principal Act, immediately after sub-article Amendment of

article 72 of the

(5), there shall be added the following new sub-article>

principal Act.

“(6) Only preference shares which are to be redeemed or

are liable to be redeemed by the terms of their issue shall be

redeemable, and other shares in a company may not be converted

into redeemable shares.”.

For sub-article (2) of article 82 of the principal Act, there shall Amendment of

article 82 of the

be substituted the following>

principal Act.

“(2) All documents supplied to the Registrar shall be

authenticated in accordance with this article>

Provided that where documents are supplied to the Registrar

by electronic means, such documents may, in addition to the manner

of authentication laid down in sub-article (1), be authenticated by

an individual specifically authorised for such purpose by the

memorandum, or by a resolution of the board of directors, or by

an extraordinary resolution of the company. Authentication of

documents supplied to the Registrar by electronic means shall be

made by an electronic signature duly recognised by the Registrar.”.

Immediately after article 114 of the principal Act, there shall

be inserted the following new articles>

114A. (1) Where a company issues shares (the

“Group

reconstruction

“issuing company”) and the issuing company>

relief.

(a) is a qualifying subsidiary of another company

(“the holding company”)< and

(b) allots shares>

(i) to the holding company< or

(ii) to another qualifying subsidiary of the

holding company,

in consideration for the transfer to the issuing company

of non-cash assets of a company that is a member of the

group of companies that comprises the holding company

and all its qualifying subsidiaries (the “transferor

company”),

the issuing company shall not be required in terms of

article 114 to transfer any amount in excess of the

minimum premium value to the share premium account.

(2) For the purposes of this article the “minimum

premium value” means the amount, if any, by which the base

value of the consideration for the shares allotted exceeds the

aggregate nominal value of the shares.

(3) The base value of the consideration for the

shares allotted is the amount by which the base value of the

assets transferred exceeds the base value of any liabilities of

the transferor company assumed by the issuing company as

part of the consideration for the assets so transferred.

(4) For the purposes of this article>

(a)

The base value of assets transferred is taken

as>

(i) the cost of those assets to the transferor

company< or

(ii) the amount at which those assets are

stated in the transferor company’s accounting

records immediately before the transfer< or

(iii) the fair market value of the assets,

whichever is less.

(b) The base value of the liabilities assumed is

taken as the amount at which they are stated in the

transferor company’s accounting records immediately

before the transfer.

(5) For the purposes of this article the term

“qualifying subsidiary” shall mean a company in which the

holding company holds at least an eighty per cent equity

holding. The term “eighty per cent equity holding” shall have

the meaning assigned to it in article 114B(5).

114B. (1) The provisions of article 114 shall not

apply when the company issuing shares (“the issuing

company”) has secured at least an eighty per cent equity

holding in another company in pursuance of an arrangement

providing for the allotment of equity securities in the issuing

company on terms that the consideration for the shares allotted

is to be provided>

(a) by the issue or transfer to the issuing company

of equity securities in the other company< or

(b) by the cancellation of any such shares not held

by the issuing company.

(2) The provisions of article 114 shall not apply

when the equity securities in the issuing company allotted in

pursuance of the arrangement in consideration for the

acquisition or cancellation of equity securities in the other

company are issued at a premium.

(3) The provisions of article 114 shall not apply

where the arrangement also provides for the allotment of any

shares in the issuing company on terms that the consideration

for those shares is to be provided>

(a) by the issue or transfer to the issuing company

of non-equity securities in the other company< or

(b) by the cancellation of any such shares in that

company not held by the issuing company.

(4) The provisions of this article shall not apply

in cases falling under article 114A.

(5) For the purposes of this article an “eighty per

cent equity holding” means a holding of eighty per cent of

the nominal value of the company’s issued equity securities>

Provided that in determining the existence of

“eighty per cent equity holding” it shall be immaterial whether

any of those securities were acquired in pursuance of the

arrangement>

Provided further that shares held by the other

company in itself shall be excluded in determining the nominal

value of the company’s issued equity securities.

(6) Where the issued share capital of the issuing

company is divided into various classes of shares the

requirement in sub-article (5) must subsist in relation to each

of those classes of shares.

(7) For the purpose of this article, shares held by

a group company of the issuing company or their nominees

shall be treated as if they were held by the issuing company

itself.

114C. An amount corresponding to the amount

Relief may be

representing the premiums, or part of the premiums, on shares

balance sheet. issued by a company that by virtue of any relief under 114A

or 114B is not included in the company’s share premium

account may also be disregarded in determining the amount

at which any shares or other consideration provided for the

shares issued is to be included in the company’s balance sheet.

114D. (1) The Minister may, by regulations

make further

provisions by published in the Gazette, make such provision as appears to

regulations. him to be appropriate-

(a) for relieving companies from the requirements

of article 114 in relation to premiums other than cash

premiums<

(b) for restricting or otherwise modifying any

relief from those requirements provided for in this

Chapter.

(2) The regulations referred to in sub-article (1)

hereof may make different provision for different cases or

classes of cases and may contain such incidental and

supplementary provisions as the Minister may think fit.”.

In sub-article (3) of article 159 of the principal Act, for the Amendment of

article 159 of the

words “The company shall within fourteen days of the deposit of a principal Act.

notice of resignation send a copy of the notice to the Registrar for

registration.”, there shall be substituted the words “The company shall

within fourteen days of the deposit of a notice of resignation give notice

thereof to the Registrar for registration.”.

For sub-article (3) of article 182 of the principal Act, there Amendment to

article 182 of the

shall be substituted the following>

principal Act.

“(3) If a company carries on business or has business

interests to the extent of more than ninety percent outside Malta

and in respect of an accounting period, the directors, before the

end of the period allowed by sub-article (2), give to the Registrar

for registration notice in the prescribed form>

(a) stating that the company so carries on business or

has such interests< and

(b) claiming an extension of the period so allowed<

the period allowed in relation to that accounting period shall be

eighteen months>

Provided that for the purpose of this sub-article, interests or

holdings held in companies formed and registered in Malta or in

companies referred to in article 384, and income derived therefrom,

shall be ignored for the purpose of determining whether a company

carries on business or has business interest outside Malta as

aforesaid>

Provided further that for the purpose of article 387 the

provisions of this sub-article shall apply only by reference to the

oversea company’s operations in Malta as if such operations had

been conducted by a separate company formed and registered in

Malta under this Act.”.

In sub-article (2) of article 184 of the principal Act,

immediately at the end thereof, there shall be added the words>

“Where the annual return is forwarded to the Registrar by

electronic means, in addition to the manner of signing laid down

in this sub-article, such annual return may be signed by an

individual specifically authorised for such purpose by the

memorandum, or by a resolution of the board of directors, or by

an extraordinary resolution of the company. The signature of such

annual return shall be by means of an electronic signature duly

recognised by the Registrar.”.

In sub-article (1) of article 387 of the principal Act, for the

words “in every calendar year” there shall be substituted the words

“within forty two days from the end of the period referred to in sub-

articles (2) and (3) of article 182”.

Article 401 of the principal Act shall be amended as follows>

(a) in paragraph (e) of sub-article (1) thereof, for the words

“or of any deduction referred to in article 83”, there shall be

substituted the words “or of any reduction referred to in article

83”<

(b) for paragraph (f) of sub-article (1) thereof, there shall

be substituted the following>

“(f) to supply copies or certified copies of documents

registered pursuant to this article against payment of the

prescribed fee to any person who requests them and such

copies may also be supplied by electronic means<”.

In paragraph (d) of sub-article (1) of article 425 of the

principal Act, for the words “other than the Ninth, Tenth, Eleventh and

Twelfth Schedule”, there shall be substituted the words “other than the

Ninth, Eleventh and Twelfth Schedule”.

In indent (b) of sub-paragraph (4) of paragraph 4 of the Eighth Amendment of the

Eight Schedule to

Schedule to the principal Act, for the words “closing date”, there shall the principal Act.

be substituted the words “closing rate”.

Article 47 of the Duty on Documents and Transfers Act shall Consequential

amendment of the

be amended as follows>

Duty on Documents

and Transfers Act.

(a) in sub-article (3) thereof, there shall be added the

following new paragraph>

“(e) a company which proves to the satisfaction of the

Commissioner that it carries on, or intends to carry on,

business or has, or intends to have, business interests to the

extent of more than ninety percent outside Malta by

demonstrating that it satisfies such conditions as to the

Commissioner may appear appropriate.”<

(b) sub-article (9) thereof shall be substituted by the

following>

“(9) The provisions of this article shall only be

applicable where the Commissioner has so determined and

such determination and any determination made pursuant to

sub-article (7) or sub-article (8) shall continue to be applicable

as long as the relevant conditions and provisions are

satisfied.”< and

(c) immediately after sub-article (9) thereof there shall be

added the following new sub-article>

“(10) The provisions of this article shall not apply>

(a) where the marketable securities in question

are held in a company the assets of which consist wholly

or principally of immovable property situated in Malta<

or

(b) where the said exemption arises by virtue of

sub-article 3(d), the said marketable securities are

acquired by an individual who is ordinarily resident and

domiciled in Malta or by any other person (other than

any person referred to in sub-article (3)) who is owned

or controlled, or acts on behalf of, an individual who is

ordinarily resident and domiciled in Malta.”.

Passed by the House of Representatives at Sitting No. 553 of 18th July, 2007.

A NTON T ABONE

Speaker

Clerk to the House of Representatives

Mitbug[ fl-Istamperija tal-Gvern — Printed at the Government Printing Press

Lm0.48 (€1.12)