ACT No. XXXI of 2020 AN ACT to amend the Companies Act, Cap. 386, and to provide for matters ancillary or incidental thereto.

I assent.

(L.S.)

GEORGE VELLA

President

23rd June, 2020

ACT No. XXXI of 2020

AN ACT to amend the Companies Act, Cap. 386, and to provide for

matters ancillary or incidental thereto.

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

consent of the House of Representatives, in this present Parliament

assembled, and by the authority of the same, as follows:-

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

2020 and this Act shall be read and construed as one with the

Companies Act, hereinafter referred to as the "principal Act".

Article 142 of the principal Act shall be substituted by the Substitution of

article 142 of

following

the principal

Act.

"142.(1) A person shall not be qualified for appointment

or to hold office as director of a company or company secretary

if

(a) he is interdicted or incapacitated or is an

undischarged bankrupt;

(b)

he has been convicted of any of the crimes

affecting public trust or of theft or of fraud or of knowingly

receiving property obtained by theft or fraud;

(c)

he is a minor who has not been emancipated for

trade; or

(d) he is subject to a disqualification order under

article 320

Provided that a disqualification in terms of

paragraph (b) shall remain valid

(i) in perpetuity, if the punishment for the

crime he has been convicted of is of imprisonment

for life;

(ii) for a period of fifteen (15) years if the

punishment for the crime he has been convicted of is

of imprisonment between twenty-five (25) and thirty

(30) years;

(iii) for a period of ten (10) years if the

punishment for the crime he has been convicted of is

of imprisonment between ten (10) and twenty-five

(25) years;

(iv) for a period of eight (8) years if the

punishment for the crime he has been convicted of is

of imprisonment between five (5) and ten (10) years;

(v) for a period of five (5) years if the

punishment for the crime he has been convicted of is

of imprisonment between four (4) and ten (10) years;

and

(vi) for a period of three (3) years if the

punishment for the crime he has been convicted of is

of imprisonment for less than four (4) years

Provided further that in any case the

disqualification period in terms of this proviso shall

not be less than the term of imprisonment that the

person would have been awarded.

(2) Notwithstanding the provisions of this Act or of the

memorandum and articles of a company relating to the

formalities of the appointment of a director or other officer and

to his qualification, any irregularity concerning the appointment

of a director or other officer of a company raised after the

completion of the publication of his appointment shall not be

relied upon by the company as against third parties unless the

company proves that such parties were aware of the irregularity

at the relevant time.

(3) Third parties who were not aware of the irregularities

referred to in sub-article (2) at the relevant time may rely on that

irregularity as against the company.

(4) The Registrar may restrict a person from being

appointed as director or company secretary of a proposed

commercial partnership or an existing company if he is or has

been a director or secretary of an existing Maltese company in

relation to which he has breached the provisions of this Act for

three (3) times within a period of two (2) years, that shall be

reckoned from the first breach, and he is still in default as to one

or more of such breaches.

(5) Any person who feels aggrieved by a restriction from

being appointed as director or company secretary in terms of sub-

article (4) may bring an application before the court against the

Registrar for the removal of such restriction.".

Article 320 of the principal Act shall be amended as follows

Amendment of

article 320 of

the principal

(a) in sub-article (1) thereof, the words "upon the

Act.

application of the Attorney General or the Registrar" shall be

substituted by the words "upon the application of the Attorney

General, the Official Receiver or the Registrar";

(b)

sub-article (2) shall be amended as follows

(i) the words "upon the application of the Attorney

General or the Registrar" shall be substituted by the words

"upon the application of the Attorney General, the Official

Receiver or the Registrar";

(ii) paragraph (a) thereof, shall be substituted by

the following

"(a) that such person, during the time he has

been a director of a company, has been in breach of the

provisions of this Act for the third time in a period of

two (2) years that shall be reckoned from the first

breach; or"; and

(iii) paragraph (b) thereof, shall be substituted by

the following

"(b) that such person is or has been a director

of a company which at any time has become

insolvent, whether while he was a director or

subsequently, and that his conduct as a director of

that company, either taken alone or taken together

with his conduct as a director of any other company

or companies, makes him unfit to be involved in the

management of a company.".

Article 329B of the principal Act shall be amended as

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

"imposed by paragraph (c)." shall be substituted by the words

"imposed by paragraph (d).";

(b)

sub-article (5) thereof shall be amended as follows

(i) sub-paragraph (iii) of paragraph (a) thereof,

shall be substituted by the following

"(iii) order that the remuneration and the

disbursements of the special controller are initially

paid out of a fund established by regulations in

terms of sub-article (15), which expense shall be

recoverable from the company in accordance with

this article. On the making of such order, a copy

thereof shall forthwith be forwarded by the

Registrar of Courts to the Official Receiver.

The expense paid out pursuant to this article

shall be notified in writing to the company.

The company shall effect payment of

expenses paid out pursuant to this article without

delay, upon a request by the Official Receiver and in

the event that the company has been dissolved, the

Official Receiver shall, in regard to the said

expense, enjoy the same preferential ranking as a

liquidator for his expenses as properly incurred in

accordance with this Act.

Without prejudice to the previous paragraph, a

copy of the aforementioned request for payment,

served by means of a judicial act on the company or

its officers, shall constitute an executive title for all

effects and purposes of Title VII of Part I of Book

Second of the Code of Organization and Civil

Procedure."; and

(ii) paragraph (b) thereof, shall be substituted by

the following

"(b) The Court shall appoint as the special

controller an individual from the list of individuals

eligible to occupy the office of special controller held

by the Official Receiver, regard being given to the

nature of the company to be restructured and the

special controller’s experience and expertise in the

management of business enterprises. The Court shall

ascertain that there is no conflict of interest in

relation to his appointment.".

Immediately after sub-article (8) of article 425 of the principal Amendment of

article 425 of

Act there shall be added the following new sub-articles

the principal

Act.

"(9) The Minister may prescribe regulations for electronic

filing and, or electronic signing of notices required by this Act,

electronic signatures, the issuing of electronic certificates,

letters, and any other documents issued by the Registrar and any

other ancillary matters.

(10) The Minister may by regulations on the holding of

annual general meetings, extend the term for the holding of the

annual general meeting and for the laying and approval of

accounts. In addition to that the Minister may by regulations

provide for suspension of any periods for the holding of general

meetings, whether ordinary or extraordinary, and to the holding

of virtual annual general meetings and other meetings.

(11) The Minister may make regulations for the better

carrying out of any of the provisions of sub-article (1) of article

218, and may, without prejudice to the generality of the

foregoing, by such regulations suspend the right of any of the

persons mentioned in the said sub-article to file a winding up

application in terms of the said sub-article (1) of article 218 and

article 214.

(12) The Minister may make regulations for the better

carrying out of any of the provisions of article 316, and may,

without prejudice to the generality of the foregoing, by such

regulations suspend even retrospectively the application of the

provisions of the said article 316.

(13) The Minister may make regulations for the better

carrying out of any of the provisions of article 223, and may,

without prejudice to the generality of the foregoing, by such

regulations prescribe new rules in relation to the deemed date of

dissolution of a company.".

Passed by the House of Representatives at Sitting No. 345 of the

17th June, 2020.

ANĠLU FARRUGIA

Speaker

RAYMOND SCICLUNA

Clerk of the House of Representatives

€0.72