cap_386 preamble—companiesact

MT

COMPANIES ACT (preamble—companiesact)

476 Articles / Provisions · Malta

Open official source Machine-readable Markdown (.md)

Table of Provisions (476)

Preamble Art. 1 Short title. First Schedule Art. 2 Interpretation. Second Schedule Art. 3 References in other Acts. Art. 3A Transposition and implementation of EU instruments. Third Schedule Art. 4 Formation of commercial partnerships and different kinds of commercial partnerships. Fourth Schedule Art. 5 Law governing commercial partnerships. Fifth Schedule Art. 6 Indication of particulars in business letters, order forms, websites etc. Sixth Schedule Art. 7 Definition. Art. 7A Seventh Schedule Art. 8 Agreement to pay share of profits. Eighth Schedule Art. 9 Partnership name. Ninth Schedule Art. 10 Penalties. Tenth Schedule Art. 11 Contributions deemed to be made in ownership. Eleventh Schedule Art. 12 Contribution of a debt owing to a partner. Twelfth Schedule Art. 13 How a partnership is constituted. Art. 14 Contents of deed of partnership. Art. 15 Registration of deed of partnership. Art. 16 Duty of Registrar and effects of registration. Art. 17 Where certificate of registration is not issued. Art. 18 Person holding himself out to be a partner. Art. 19 Changes in deed of partnership. Art. 20 Where alteration consists in change of partnership- name. Art. 21 Reduction in contribution of a partner and dissolution of a partnership before period fixed for its duration. Art. 22 Right of creditors of a partner to oppose extension of duration of a partnership. Art. 23 Duties of Registrar of Courts. Art. 24 How deed of partnership may be altered.. Art. 25 Administration and representation of a partnership and how partnership may be bound. Art. 26 Keeping of accounting records. Art. 27 New partners. Art. 28 Distribution of profits. Art. 29 Rights of creditors of a partner. Art. 30 Partner may not compete with partnership. Art. 31 Death of a partner. Art. 32 Expulsion of a partner. Art. 33 Discontinuation of membership. Art. 34 Rights of persons ceasing to be partners. Art. 35 Dissolution of partnerships en nom collectif. Art. 36 Notice of dissolution. Art. 37 How a partnership en nom collectif may be wound up. Art. 38 Power to remove liquidator. Art. 39 Remuneration of liquidator. Art. 40 Costs of winding up payable in priority to all other claims. Art. 41 Penalty. Art. 42 Powers until provision is made for winding up. Art. 43 Duties of partners vested with administration. Art. 44 Powers of liquidators. Art. 45 Liquidator not to distribute assets before paying debts. Art. 46 Duty of liquidator to give information, to render account and prepare scheme of distribution. Art. 47 Rules applicable to distribution of assets. Art. 48 Approval of accounts and scheme of distribution. Art. 49 Striking of name of partnership off register. Art. 50 Preservation of accounting records and documents after dissolution. Art. 51 Definition. Art. 51A Art. 52 Applicability of provisions governing partnerships en nom collectif. Art. 53 Partnership-name. Art. 54 Contribution of limited partner not to include personal services. Art. 55 Contents of deed of partnership. Art. 56 Rights and duties of partners. Art. 57 Administration and representation. Art. 58 Appointment of partners to administer and represent partnerships en commandite or limited partnership. Art. 59 Limited partner cannot take part in management of partnership en commandite or limited partnership. Art. 60 Communication of yearly accounts to limited partners. Art. 61 Non-applicability of certain articles to limited partners. Art. 62 Limited partner not bound to restore profits received in good faith. Art. 63 Assignment of interest by limited partner and rights of limited partners. Art. 64 Death or expulsion of limited partner. Art. 65 Dissolution of partnership en commandite or limited partnership. Art. 66 Division of capital into shares. Art. 66A Partnership en commandite or limited partnership. Art. 67 Definition. Art. 68 How a company is constituted. Art. 69 Contents of memorandum. Art. 70 Name of company. Art. 71 Objects of company. Art. 72 Minimum share capital. Art. 73 Consideration for acquisition of shares. Art. 74 Transfer to company of non- cash asset in first two years. Art. 75 Articles of association. Art. 76 Registration of memorandum and articles. Art. 77 Duty of Registrar and effects of registration. Art. 78 Where certificate of registration is not issued. Art. 79 Alterations and additions to memorandum and articles. Art. 80 Change of name of company. Art. 81 Art. 82 Authentication of documents. Art. 83 Reduction of issued share capital. Art. 84 Investment companies with variable share capital. Art. 84A Power to make regulations regarding cell companies. Art. 84B Application of article 84(10)(c) to collective investment schemes. Art. 84C Minister may make regulations relating to securitisation vehicles. Art. 84D Minister may make regulations relating to formation, etc., of incorporated cell companies and cells. Art. 84E Power to make regulations regarding cell companies carrying on or engaged in shipping or aviation business. Art. 85 Increase in issued share capital and directors’ authority to issue shares. Art. 86 Amount paid up on allotment of shares in a public company. Art. 87 Amount paid up on allotment of shares in a private company. Art. 88 Offering of shares on a pre-emptive basis on issue. Art. 89 Issue of applications for shares in or debentures of a public company to be made with a prospectus. Art. 90 Dating of prospectus and matters to be stated therein. Art. 91 Penalty. Art. 92 Prospectus including a statement by experts. Art. 93 Registration of prospectus. Art. 94 Civil liability for misstatements in prospectus. Art. 95 Document containing offer of shares or debentures for sale to be deemed prospectus. Art. 96 Interpretation of provisions relating to prospectus. Art. 96A Offer of securities to the public in third countries. Art. 97 No allotment unless minimum subscription received. Art. 98 Effect of irregular allotment. Art. 99 Time of the opening of the subscription lists. Art. 100 Revocability of application for shares or debentures. Art. 101 Allotment of shares, etc., to be dealt in on stock exchange. Art. 102 Operation of article 101 where prospectus offers shares for sale. Art. 103 Return as to allotments. Art. 104 Duty of directors on serious loss of capital. Art. 105 Company may not subscribe for its own shares. Art. 106 Conditions in which a company may acquire its own shares. Art. 107 Acquisition of own shares by a company without application of article 106. Art. 108 Shares acquired or held in contravention of articles 106 and Art. 109 Conditions for acquisition by a company of its own shares where permitted by law. Art. 110 Art. 111 Effect of acceptance of a company’s own shares as security. Art. 112 Forfeiture or surrender of shares. Art. 113 Conditions for payment of commissions, discounts, etc. Art. 114 Application of premium received on issue of shares. Art. 114A Group reconstruction relief. Art. 114B Takeover relief. Art. 114C Relief may be reflected in company’s balance sheet. Art. 114D Power to make further provisions by regulations. Art. 115 Redeemable preference shares. Art. 116 Rights of holders of special classes of shares and changes or variations thereof. Art. 117 Numbering of shares. Art. 117A Usufructuary of shares. Art. 118 Transfer of shares or debentures. Art. 119 Registration of transfer or transmission of shares or debentures. Art. 120 Issue of certificates. Art. 121 Prohibition of share warrants. Art. 121A Transitory provisions. Art. 122 Pledging of securities. Art. 123 Register of members. Art. 124 Register of debentures. Art. 125 Inspection of registers. Art. 126 Power to close registers. Art. 126A Proper keeping of register in certain instances. Art. 127 Trustees and nominees. Art. 127A Shares in companies held by private foundations, including those with segregated cells. Art. 128 Holding of annual general meeting. Art. 129 Convening of extraordinary general meeting on requisition. Art. 130 Length of notice for calling general meetings. Art. 131 General provisions as to meetings and votes. Art. 132 Powers of court to order meeting. Art. 133 Proxies. Art. 134 Right to demand a poll. Art. 135 Extraordinary and ordinary resolutions. Art. 136 Power of company to borrow money, hypothecate or charge its undertaking, etc. Art. 136A General duties of directors. Art. 137 Directors. Art. 138 Company secretary. Art. 139 Appointment of directors. Art. 140 Removal of directors and casual vacancies. Art. 141 Representation of the company. Art. 142 Disqualification for appointment as director or company secretary. Art. 143 Directors competing with company. Art. 144 Prohibition of loans, etc. to directors. Art. 145 Duty of director to disclose interest in a contract with company. Art. 146 Return as to changes among directors, company secretary and in representation of company. Art. 147 Joint and several liability of directors for breach of duty. Art. 148 Provisions as to liability of officers and auditors. Art. 149 Minutes of proceedings. Art. 150 General duty of officers of a company. Art. 151 Appointment of auditors. Art. 152 Filling of casual vacancies. Art. 153 Rules on auditor independence and professional ethics. Art. 154 Right to information. Art. 155 Right to attend company meetings. Art. 156 Remuneration of auditors. Art. 157 Removal of auditors. Art. 158 Rights of auditors who are removed or not re- appointed. Art. 159 Resignation of auditor. Art. 160 Rights of resigning auditor. Art. 161 Statement by person ceasing to hold office as auditor. Art. 162 Failure to comply with article 161. Art. 163 Keeping of accounting records. Art. 164 Accounting reference period and accounting reference date. Art. 165 Alteration of accounting reference period. Art. 166 Consequence of giving notice under article 165. Art. 167 General provisions as to content and form of individual accounts. Art. 168 Annual accounts of certain types of undertakings. Art. 169 Accounts of investment company with variable capital. Art. 170 Duty to prepare consolidated accounts. Art. 171 Form and content of consolidated accounts. Art. 172 Responsibility and liability for drawing up and publishing the financial statements and the directors’ report. Art. 173 Consolidated accounts - size exemption. Art. 174 Exemption for parent companies included in accounts of larger groups. Art. 175 Disclosure required in notes to accounts. Art. 176 Approval and signing of annual accounts. Art. 177 Contents of the directors’ report. Art. 178 Approval and signing of directors’ report. Art. 179 Auditors’ report. Art. 179A Art. 179B Audit report. Art. 180 Persons to whom a copy of the accounts of a company are to be sent. Art. 181 Directors to lay accounts before the general meeting. Art. 182 Period for laying and approval of accounts. Art. 183 Copies of accounts to be provided to Registrar. Art. 184 Annual return. Art. 185 Exemptions for certain small companies. Art. 186 Share capital in any convertible currency. Art. 187 Accounts in any convertible currency. Art. 188 Power of Minister to make regulations altering accounting requirements. Art. 189 Consequential provisions to article 188. Art. 190 Court order to make good failure to lay or deliver accounts. Art. 191 Application to other commercial partnerships. Art. 192 Certain distributions prohibited. Art. 193 Distributions by companies. Art. 194 Other distributions by investment companies with fixed share capital. Art. 195 Extension of article 194 to other companies. Art. 196 Treatment of development costs. Art. 197 Distribution to be justified by reference to company’s accounts. Art. 198 Requirements for last annual accounts. Art. 199 Requirements for interim accounts. Art. 200 Requirements for initial accounts. Art. 201 Method of applying article 197 to successive distributions. Art. 202 Treatment of assets in the relevant accounts. Art. 203 Distributions in kind. Art. 204 Consequence of unlawful distribution. Art. 205 Obligations imposed apart from article 204 not to be prejudiced. Art. 206 Saving for provision in articles operative before 1st January, Art. 207 Interpretations for the purposes of this Chapter. Art. 208 Saving for other restraints on distribution. Art. 209 Definition. Art. 210 Resolutions in writing. Art. 211 Exempt company. Art. 212 Single member companies. Art. 213 Change of status of company. Art. 213A Undertakings required to report on payments to governments. Art. 213B Undertakings and branches that are required to report on income tax information. Art. 213C Responsibility for drawing up, publishing and making accessible the report on income tax information. Art. 213D Statement by statutory auditor. Art. 214 Causes of dissolution and consequential winding up. Art. 214A Simplified dissolution procedure. Art. 215 Meaning of "contributory". Art. 216 Liability as contributories of present and past members. Art. 217 Liability of past directors and shareholders. Art. 218 Dissolution and winding up application. Art. 219 Powers of the court. Art. 220 Power to stay proceedings against company. Art. 221 Dispositions of property etc., after date of deemed dissolution. Art. 222 Warrants not to be carried into effect against company. Art. 223 Deemed date of dissolution. Art. 224 Consequences of a winding up order. Art. 225 Official receiver. Art. 226 Statement of company’s affairs to be submitted to official receiver. Art. 227 Report by official receiver. Art. 228 Appointment and powers of provisional administrator. Art. 229 Functions of official receiver in relation to office of liquidator. Art. 230 Choice of liquidator at meetings of creditors and contributories. Art. 231 Meetings of creditors and contributories. Art. 232 Creditors entitled to vote. Art. 233 Notice of first meeting to officers of company. Art. 234 Summary of statement of affairs. Art. 235 Where person other than the official receiver is appointed liquidator. Art. 236 General provisions as to liquidators. Art. 237 Custody and control of company’s property. Art. 238 Powers of liquidator. Art. 239 Exercise and control of liquidator’s powers. Art. 240 Books to be kept by liquidator. Art. 241 Payments of liquidator into bank. Art. 242 Audit of liquidator’s accounts. Art. 243 Control over liquidators. Art. 244 Release of liquidator from his appointment. Art. 245 Determination whether committee is to be appointed. Art. 246 Constitution and proceedings of liquidation committee. Art. 247 Powers of official receiver where there is no committee. Art. 248 Power to stay winding up. Art. 249 Settlement of list of contributories and application of assets. Art. 250 Delivery of property to liquidator. Art. 251 Debts due by contributory and extent of set-off. Art. 252 Power to make calls. Art. 253 Order of court to be conclusive evidence. Art. 254 Appointment of special manager. Art. 255 Fixing of time for proofs of debt. Art. 256 Adjustments of rights of contributories. Art. 257 Inspection of books of company. Art. 258 Payments of costs of winding up out of assets. Art. 259 Summoning of persons suspected of having property of the company, etc. Art. 260 Power to order examination of promoters and officers. Art. 261 Power to arrest absconding contributory. Art. 262 Powers of court cumulative. Art. 263 Liquidator may exercise certain powers of court. Art. 264 Striking of name of the company off the register. Art. 265 Notice of resolution for dissolution and consequential voluntary winding up. Art. 266 Date of dissolution in a voluntary winding up. Art. 267 Effects of voluntary winding up. Art. 268 Declaration of solvency. Art. 269 Provisions applicable to a member’s voluntary winding up. Art. 270 Appointment, remuneration and removal of liquidators. Art. 271 Vacancy in office of liquidator. Art. 272 Duty of liquidator in case of insolvency. Art. 273 Liquidator to hold general meeting where winding up continues for more than twelve months. Art. 274 Final meeting. Art. 275 Striking company’s name off the register. Art. 276 Alternative provisions in case of insolvency. Art. 277 Provisions applicable to creditors’ voluntary winding up. Art. 278 Meeting of creditors. Art. 279 Appointment and removal of liquidator. Art. 280 Liquidation committee. Art. 281 Remuneration of liquidator. Art. 282 Vacancy in office of liquidator. Art. 283 Liquidator to hold meeting of company and creditors where winding up continues for more than twelve months. Art. 284 Final meetings. Art. 285 Striking company’s name off the register. Art. 286 Provisions applicable to every voluntary winding up. Art. 287 Distribution of property of company. Art. 288 Powers and duties of liquidator. Art. 289 Powers of the court to remove liquidators. Art. 290 Notice by liquidator of his appointment. Art. 291 When arrangement is binding on members. Art. 292 Court may determine questions and exercise powers. Art. 293 Costs of voluntary winding up. Art. 294 Savings for rights of creditors and contributories. Art. 295 Powers of directors and company secretary to cease. Art. 296 Summoning of meetings. Art. 297 Proof of notice and chairman of meeting. Art. 298 Resolutions of creditors and contributories. Art. 299 Other proceedings at meetings. Art. 300 Notice of resignation or removal of liquidator. Art. 300A Rectification of scheme of distribution. Art. 300B Restoration of company name on register. Art. 301 Debts of all descriptions may be proved. Art. 302 Application of rules on ranking. Art. 303 Fraudulent preference. Art. 304 Liabilities and rights with respect to fraudulent preferences. Art. 305 Qualification of liquidators. Art. 306 Prohibition of certain transfers by liquidators. Art. 307 Fraud in anticipation of dissolution. Art. 308 Fraud by officers of companies being wound up. Art. 309 Other offences by officers of companies being wound up. Art. 310 Defence to a charge under article 309. Art. 311 Fraud by contributory. Art. 312 Remedy against delinquent directors, liquidators, etc. Art. 313 Fraud by officers of companies subsequently dissolved. Art. 314 Liability when proper accounting records are not kept by insolvent company. Art. 315 Responsibility for fraudulent trading. Art. 316 Wrongful trading. Art. 317 Restriction on reuse of company names. Art. 318 Reference by court for prosecution of delinquent officers, etc. Art. 319 Report by liquidator for prosecution of delinquent officers, etc. Art. 320 Disqualification orders. Art. 321 Other remedies. Art. 322 Statement by liquidator in respect of pending winding up. Art. 323 Supplementary powers of the court. Art. 324 Publication of striking off and disposal of accounting records of company. Art. 325 Defunct companies. Art. 326 Relationship with enactments on bankruptcy. Art. 327 Power of company to compromise with creditors and members. Art. 328 Information as to compromise to be circulated. Art. 329 Provisions for facilitating company reconstruction or amalgamation. Art. 329A Duties of directors where company unable to pay debts. Art. 329B Company recovery procedure. Art. 330 Requirements for conversion of commercial partnerships. Art. 331 Registration of the conversion of commercial partnerships. Art. 332 Where commercial partnership ceases to exist on conversion. Art. 333 Partners with unlimited liability to remain bound unless creditors consent to conversion. Art. 334 Rights of creditors to oppose conversion. Art. 335 Commercial partnership formed succeeds commercial partnership ceasing to exist. Art. 336 Application of articles 337 to 342. Art. 337 Requirements for amalgamation of commercial partnerships. Art. 338 Registration of the amalgamation of commercial partnerships. Art. 339 Where a commercial partnership ceases or partnerships cease to exist on amalgamation. Art. 340 Partners with unlimited liability to remain bound unless creditors consent to amalgamation. Art. 341 Right of creditors to oppose amalgamation. Art. 342 Acquiring or new commercial partnership succeeds commercial partnership ceasing to exist. Art. 343 Amalgamation in the form of a "merger by formation of a new company" or "merger by acquisition". Art. 344 Draft terms of merger. Art. 345 Approval by extraordinary resolution of amalgamation. Art. 346 Drawing up of detailed written report on draft terms of merger by directors. Art. 347 Non applicability of article 73(4), (5) and (6) in certain cases of amalgamation. Art. 348 Written report to shareholders to be drawn up by one or more experts. Art. 349 Documents which shareholders of amalgamating companies are entitled to inspect. Art. 350 Registration of the amalgamation of companies. Art. 351 Rights of creditors to oppose amalgamation. Art. 352 Protection of holders of securities in an amalgamation. Art. 353 Duties of Registrar in respect of amalgamations. Art. 354 Consequences of amalgamation. Art. 355 Liability of director or expert for misconduct. Art. 356 Appeal from decision of the Registrar. Art. 357 Application of articles 344 to 356 to merger by formation of a new company. Art. 358 Acquisition of one company by another which holds all its shares. Art. 359 Acquisition of one company by another which holds 90% or more, but not all, of its voting shares. Art. 360 Division of a company by acquisition or by formation of new companies. Art. 361 Draft terms of division. Art. 362 Approval by extraordinary resolution of division. Art. 363 Drawing up of detailed written report on draft terms of division by directors. Art. 364 Written report to shareholders to be drawn up by one or more experts. Art. 365 Documents which shareholders of companies involved in a division are entitled to inspect. Art. 366 Non-applicability of certain provisions where shareholders involved in a division are in agreement. Art. 367 Delivery of extraordinary resolutions relating to division to Registrar for registration. Art. 368 Rights of creditors to oppose division. Art. 369 Protection of holders of securities in a division. Art. 370 Duties of Registrar in respect of a division. Art. 371 Consequences of division. Art. 372 Liability of director or expert for wilful or negligent misconduct. Art. 373 Appeal from decisions of Registrar. Art. 374 Application of preceding articles of this Part to division by formation of new companies. Art. 374A Division by a combination of division by acquisition and division by formation of new companies. Art. 375 Application to court to supervise division and powers of the court in relation thereto. Art. 376 Definition. Art. 377 Consent of associates required for admission of other associates. Art. 378 Relations of parties vis-à-vis third parties and among themselves. Art. 379 Only associating party acquires rights and assumes obligations. Art. 380 Rights of associating party and of associates. Art. 381 Liability of associate. Art. 382 Agreements allowed between parties. Art. 383 Formalities required for association en participation. Art. 384 Application of articles 385 to 389. Art. 385 Documents, etc., to be delivered by oversea companies carrying on business in Malta. Art. 386 Return to be delivered by oversea company where documents, etc., altered. Art. 387 Accounts of oversea company. Art. 388 Other obligations of oversea company. Art. 389 Penalties. Art. 390 Application of articles 391 to 399. Art. 391 Prospectus of oversea company. Art. 392 Attempted evasion of article 391 to be void. Art. 393 Prospectus containing statement by expert. Art. 394 Restrictions on allotment to be secured in prospectus. Art. 395 Certificate exempting from compliance with Part B of the Second Schedule. Art. 396 Registration of oversea prospectus before issue. Art. 397 Consequences of non-compliance with articles 391 to Art. 398 Supplementary. Art. 399 Affairs in Malta of an oversea company may be wound up by the court. Art. 399A Closure by oversea company of its branch or place of business in Malta. Art. 400 Power of Minister to appoint Registrar. Art. 401 Additional duties of Registrar. Art. 402 Protection of shareholders against unfair prejudice. Art. 403 Investigation of commercial partnerships and oversea companies. Art. 404 Investigation of a company on its own application or that of its members. Art. 405 Other company investigations. Art. 406 Inspectors’ powers during investigation. Art. 407 Production of documents and evidence to inspectors. Art. 408 Power of inspector to call for directors’ bank accounts. Art. 409 Obstruction of inspectors during investigation of company’s affairs. Art. 410 Inspectors’ reports. Art. 411 Power to bring civil proceedings on company’s behalf. Art. 412 Expenses of investigating a company’s affairs. Art. 413 Inspectors’ report to be admissible as evidence. Art. 414 Power to investigate company ownership. Art. 415 Provisions applicable on investigation under article 414. Art. 416 Power to obtain information as to those interested in shares, etc. Art. 417 Power to impose restrictions on shares or debentures. Art. 418 Registrar’s powers to require production of documents. Art. 419 Entry and search of premises. Art. 420 Provision for security of information obtained. Art. 421 Punishment for destroying, mutilating, etc., company documents. Art. 422 Punishment for furnishing false information. Art. 423 Privileged information. Art. 424 Right to inspect and obtain copies of documents, etc., kept by Registrar. Art. 425 Power to make regulations. Art. 426 Breach of regulations. Art. 427 Administrative penalties under this Act. Art. 428 Transitional provisions. Art. 429 Transitional provisions as to winding up of commercial partnerships. Art. 430 Periods for the exercise of rights. Art. 431 Savings.

Statutory Text (476 Articles)

Laws of Malta — Chapter 386 — COMPANIES ACT

Preamble — COMPANIES ACT Open official source

C OM PA N I E S

CHAPTER 386

COMPANIES ACT

To regulate, in place of the Commercial Partnerships Ordinance, limited liability

companies and other commercial partnerships.

1st January, 1996

ACT XXV of 1995 as amended by Acts XXIV of 1995, IX, XXX of 1997, XVII of 1998, XXII

of 2000, XVII of 2002, IV, IX of 2003, II, XIII of 2004; Legal Notices 390, 391 of 2005, 181,

186 of 2006; Acts V, XII of 2006, XV of 2007; 425 of 2007; Acts IX of 2008, III of 2009 and

XIX of 2010; Legal Notice 561 of 2010; Acts X and XVI of 2011; Legal Notices 171, 337, 338

of 2012; Acts III, XX of 2013, XXII of 2014; Legal Notice 478 of 2014; Acts XXXI, XXXIII of

2015, XIX, XXXVI, LIV of 2016, Act XI XXXI of 2017 and XXXVI of 2018and XXVI of 2019

and V * and XXXI and XLVII of 2020, Acts XLVI and LX of 2021 † , XVIII of 2024, XVIII of 2025

and I of 2026.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 1 Short title. — COMPANIES ACT Open official source

The short title of this Act is the Companies Act.

PART I - PRELIMINARY PROVISIONS

Laws of Malta — Chapter 386 — COMPANIES ACT

First Schedule — COMPANIES ACT Open official source

(Article 75)

MODEL REGULATIONS FOR A LIMITED LIABILITY COMPANY

PART I REGULATIONS FOR THE MANAGEMENT OF A LIMITED

LIABILITY COMPANY

Share capital and variation of rights

1. Without prejudice to any special rights previously conferred on the holders

of any existing shares or class of shares, any share in the company may be issued

with such preferred, deferred or other special rights or such restrictions, whether in

regard to dividend, voting, return of capital or otherwise as the company may from

time to time by ordinary resolution determine.

2. Subject to the provisions of article 115 of the Companies Act, (hereinafter

referred to as "the Act"), any preference shares may, with the sanction of an ordinary

resolution, be issued on the terms that they are, or at the option of the company are,

liable to be redeemed on such terms and in such manner as the company before the

issue of the shares may by extraordinary resolution determine.

3. If at any time the share capital is divided into different classes of shares, the

change of any shares from one class into another or the variation of the rights

attached to any class (unless otherwise provided by the terms of issue of the shares

of that class which is to be changed or the rights attached to which are to be varied,

according to the case) may, whether or not the company is being wound up, be made

with the consent in writing of the holders of three-fourths of the issued shares of that

class, and the holders of three-fourths of the issued shares of any other class affected

thereby. Such change or variation may also be made with the sanction of an

extraordinary resolution passed at a separate general meeting of the holders of the

issued shares of that class and of an extraordinary resolution passed at a separate

general meeting of the holders of the issued shares of any other class affected

thereby. To every such separate general meeting the provisions of these regulations

relating to general meetings shall apply.

4. The company may exercise the power of paying commissions or of making

discounts or allowances provided it complies with the requirements of article 113 of

the Act. Such commission may be satisfied by the payment of cash or the allotment

of fully or partly paid shares or partly in one way and partly in the other.

5. Every person whose name is entered as a member in the register of members

shall be entitled without payment to receive one certificate for all his shares or

several certificates each for one or more of his shares upon payment of 20c for every

certificate after the first or such less sum as the directors shall from time to time

determine. If a share certificate be defaced, lost or destroyed, it may be renewed on

payment of a fee of 20c or such less sum and on such terms, if any, as to evidence

and indemnity and the payment of out-of-pocket expenses of the company on

investigating evidence as the directors think fit.

Calls on shares

6. The directors may from time to time make calls upon the members in respect

of any moneys unpaid on their shares (whether on account of the nominal value of

the shares or by way of premium) and not by the conditions of allotment thereof

made payable at fixed times, provided no call shall exceed one-fourth of the nominal

value of the share or be payable at less than one month from the date fixed for the

payment of the last preceding call, and each member shall (subject to receiving at

least fourteen days’ notice specifying the time or times and place of payment) pay to

the company, at the time or times and place so specified, the amount called on his

shares. A call may be revoked or postponed as the directors may determine.

7. The joint holders of a share shall be jointly and severally liable to pay all

calls in respect thereof.

8. If a sum called in respect of a share is not paid before or on the date

appointed for payment thereof, the person from whom the sum is due shall pay

annual interest thereon from the day appointed for payment thereof to the time of

actual payment at such rate not exceeding two percentage points over the Central

Bank of Malta minimum discount rate as the directors may determine, but the

directors shall be at liberty to waive payment of such interest wholly or in part.

9. Any sum which by the terms of issue of a share becomes payable on

allotment or at any fixed date, whether on account of the nominal value of the share

or by way of premium, shall for the purposes of these regulations be deemed to be a

call duly made and payable on the date on which, by the terms of issue, the same

becomes payable, and in case of non-payment, all the relevant provisions of these

regulations as to payment of interest and expenses, forfeiture or otherwise shall

apply as if such sum had become payable by virtue of a call duly made and notified.

10. The directors may, on the issue of shares, differentiate between the holders

as to the amount of calls to be paid and the times of payment.

11. The directors may, if they think fit, receive from any member willing to

advance the same, all or any part of the moneys uncalled and unpaid upon any shares

held by him, and upon all or any of the moneys so advanced may (until the same

would, but for such advance, become payable) pay annual interest at such rate not

exceeding two percentage points over the Central Bank of Malta minimum discount

rate, as may be agreed upon between the directors and the members paying such sum

in advance.

Transfer and transmission of shares

12. The instrument of transfer of any share shall be executed by or on behalf of

the transferor and transferee and the transferor shall be deemed to remain a holder of

the share until the name of the transferee is entered in the register of members in

respect thereof.

13. Subject to such of the restrictions of these regulations as may be applicable,

any member may transfer all or any of his shares by instrument in writing in any

usual or common form or any other form which the directors may approve.

14. The directors may decline to register the transfer of a share (not being a fully

paid share) to a person of whom they shall not approve.

15. The directors may also decline to recognise any instrument of transfer

unless -

(a) the instrument of transfer is accompanied by the certificate of the shares

to which it relates, and such other evidence as the directors may

reasonably require to show the right of the transferor to make the

transfer; and

(b) the instrument of transfer is in respect of only one class of share.

16. The registration of transfers may be suspended at such times and for such

periods as the directors may from time to time determine, provided always that such

C OM PA N I E S

registration shall not be suspended for more than thirty days in any year.

17. Any person becoming entitled to a share in consequence of the death of a

member may, upon such evidence being produced as may from time to time properly

be required by the directors and subject as hereinafter provided, elect either to be

registered himself as holder of the share or to have some person nominated by him

registered as the transferee thereof, but the directors shall, in either case, have the

same right to decline or suspend registration as they would have had in the case of a

transfer of the share by that member before his death.

18. If the person so becoming entitled shall elect to be registered himself, he

shall deliver or send to the company a notice in writing signed by him stating that he

so elects. If he shall elect to have another person registered he shall testify his

election by executing to that person a transfer of the share.

19. All the limitations, restrictions and provisions of these regulations relating

to the right to transfer and the registration of transfers of shares shall be applicable

to any such notice or transfer as aforesaid as if the death of the member had not

occurred and the notice or transfer were a transfer signed by that member.

20. A person becoming entitled to a share by reason of the death of the holder

shall be entitled to the same dividends and other advantages to which he would be

entitled if he were the registered holder of the share, except that he shall not, before

being registered as a member in respect of the share, be entitled in respect of it to

exercise any right conferred by membership in relation to meetings of the company.

21. Notwithstanding the provisions of regulation 20, the directors may at any

time give notice requiring any person referred to in that regulation to elect either to

be registered himself or to transfer the share, and if the notice is not complied with

within ninety days the directors may thereafter withhold payment of all dividends,

bonuses or other moneys payable in respect of the share until the requirements of the

notice have been complied with.

Forfeiture or surrender of shares

22. If a member fails to pay any call or instalment of a call on the day appointed

for payment thereof, the directors may, at any time thereafter during such time as any

part of the call or instalment remains unpaid, require payment of so much of the call

or instalment as is unpaid, together with any interest which may have accrued, by

means of a notice which shall also name a further day (not earlier than the expiration

of fourteen days from the date of service of the notice) on or before which the

payment required by the notice is to be made, and shall state that in the event of non-

payment, at or before the time appointed, the shares in respect of which the call was

made will be liable to be forfeited.

23. If the requirements specified in any such notice as aforesaid are not

complied with, any share in respect of which the notice has been given may at any

time thereafter, before the payment required by the notice has been made, be

forfeited by a resolution of the directors to that effect, or otherwise be surrendered in

favour of the company by the member to whom the said notice is addressed, if the

directors of the company accept such surrender.

24. A forfeited or a surrendered share may be sold or otherwise disposed of on

such terms and in such manner as the directors think fit, and the company may

receive the consideration, if any, given for the share on any sale or disposition

thereof and may execute a transfer of the share in favour of the person to whom the

share is sold or disposed of, who shall thereupon be registered as the holder of the

share. At any time before a sale or disposition the forfeiture or surrender may be

cancelled on such terms as the directors think fit.

25. A person whose shares have been forfeited or who has surrendered his

shares to the company shall cease to be a member in respect of the forfeited or

surrendered shares, but shall, notwithstanding, remain liable to pay to the company

all moneys which, at the date of the forfeiture or surrender, were payable by him to

the company in respect of the shares; but his liability shall cease if and when the

company shall have received payment in full of all such moneys in respect of the

shares.

Conversion of shares into stock

26. The company may by ordinary resolution convert any paid up shares into

stock, and re-convert any stock into paid up shares of any denomination.

27. The holders of stock may transfer the same, or any part thereof, in the same

manner and subject to the same regulations, as and subject to which the shares from

which the stock arose might previously to conversion have been transferred, or as

near thereto as circumstances permit; and the directors may from time to time fix the

minimum amount of stock transferable but so that such minimum shall not exceed

the nominal amount of the shares from which the stock arose.

28. The holders of stock shall, according to the amount of stock held by them,

have the same rights, privileges and advantages as regards dividends, voting at

meetings of the company and other matters as if they held the shares from which the

stock arose, but no such privilege or advantage (except participation in the dividends

and profits of the company and in the assets on winding up) shall be conferred by

any amount of stock which would not, if existing in share, have conferred that

privilege or advantage.

29. Such of the regulations of the company as are applicable to paid up shares

shall apply to stock, and the words "share" and "shareholder" therein shall include

"stock" and "stockholder".

General meetings

30. Subject to the provisions of the Act the annual general meetings shall be

held at such time and place as the directors shall appoint.

31. The directors may, whenever they think fit, convene an extraordinary

general meeting, and extraordinary general meetings shall also be convened on such

requisition, or, in default, may be convened by such requisitionists, as provided by

article 129 of the Act.

32. If at any time there are not in Malta sufficient directors capable of acting to

form a quorum, any director or any two members of the company may convene an

extraordinary general meeting in the same manner, as nearly as possible, as that in

which meetings may be convened by the directors.

Notice of general meetings

33. A general meeting of the company shall be called by fourteen days’ notice in

writing at least. The notice shall be exclusive of the day on which it is served or

deemed to be served and of the day for which it is given, and shall specify the place,

the day and the hour of meeting and, in case of special business, the general nature

of that business, and shall be given, in the manner hereinafter mentioned or in such

other manner, if any, as may be prescribed by the company in general meeting, to

such persons as are, by the Act and under the regulations of the company, entitled to

receive such notices from the company

Provided that a meeting of the company shall, notwithstanding that it is called by

shorter notice than that specified in this regulation, be deemed to have been duly

C OM PA N I E S

called if it is so agreed by all the members entitled to attend and vote thereat.

34. The accidental omission to give notice of a meeting to, or the non-receipt of

notice of a meeting by, any person entitled to receive notice shall not invalidate the

proceedings at that meeting.

Proceedings at general meetings

35. All business shall be deemed special that is transacted at an extraordinary

general meeting, and also all that is transacted at an annual general meeting, with the

exception of declaring a dividend, the consideration of the annual accounts and the

reports of the directors and auditors, the election of directors in the place of those

retiring and the appointment of, and the fixing of the remuneration of, the auditors.

36. No business shall be transacted at any general meeting unless a quorum of

members is present at the time when the meeting proceeds to business; save as herein

otherwise provided, a member or members present in person or by proxy holding in

aggregate not less than one tenth of the paid up share capital of the company

carrying the right to attend and vote at general meetings of the company at the date

of the holding of the meeting, shall be a quorum.

37. If within half an hour from the time appointed for the meeting a quorum is

not present, the meeting, if convened by the requisition of members, shall be

dissolved; in any other case it shall stand adjourned to the same day in the next

week, at the same time and place or to such other day and at such other time and

place as the directors may determine, and if at the adjourned meeting a quorum is not

present within half an hour from the time appointed for the meeting, the member or

members present shall be a quorum.

38. The chairman, if any, of the board of directors shall preside as chairman at

every general meeting of the company, or if there is no such chairman, or if he shall

not be present within fifteen minutes after the time appointed for the holding of the

meeting or is unwilling to act, the directors present shall elect one of their number to

be chairman of the meeting.

39. If at any meeting no director is willing to act as chairman or if no director is

present within fifteen minutes after the time appointed for holding the meeting, the

members present shall choose one of their number to be chairman of the meeting.

40. The chairman may, with the consent of any meeting at which a quorum is

present (and shall if so directed by the meeting), adjourn the meeting from time to

time and from place to place, but no business shall be transacted at any adjourned

meeting other than the business left unfinished at the meeting from which the

adjournment took place. When a meeting is adjourned for thirty days or more, notice

of the adjourned meeting shall be given as in the case of an original meeting. Save as

aforesaid it shall not be necessary to give any notice of an adjourned meeting or of

the business to be transacted at such meeting.

41. At any general meeting a resolution put to the vote of the meeting shall be

decided on a show of hands unless a poll is (before or on the declaration of the result

of the show of hands) demanded -

(a) by the chairman; or

(b) by at least three members present in person or by proxy; or

(c) by any member or members present in person or by proxy and

representing not less than one-tenth of the total voting rights of all the

members having the right to vote at the meeting; or

(d) by a member or members holding shares in the company conferring a

right to vote at the meeting being shares on which an aggregate sum has

been paid up equal to not less than one-tenth of the total sum paid up on

all the shares conferring that right.

Unless a poll be so demanded a declaration by the chairman that a resolution has

on a show of hands been carried or carried unanimously, or by a particular majority,

or lost and an entry to that effect in the book containing the minutes of the

proceedings of the company shall be conclusive evidence of the fact without proof of

the number or proportion of the votes recorded in favour of or against such

resolution

Provided that where a resolution requires a particular majority in value, the

resolution shall not be deemed to have been carried on a show of hands by the

required majority unless there be present at that meeting, whether in person or by

proxy, a number of members holding in the aggregate the required majority as

aforesaid.

The demand for a poll may be withdrawn

42. Except as provided in regulation 44, if a poll is duly demanded it shall be

taken in such manner as the chairman directs and the result of the poll shall be

deemed to be the resolution of the meeting at which the poll was demanded.

43. In the case of an equality of votes, whether on a show of hands or on a poll,

the chairman of the meeting at which the show of hands takes place or at which the

poll is demanded, shall be entitled to a second or casting vote.

44. A poll demanded on the election of a chairman or on a question of

adjournment shall be taken forthwith. A poll demanded on any other question shall

be taken at such time as the chairman of the meeting directs, and any business other

than that upon which a poll has been demanded may be proceeded with pending the

taking of the poll.

Votes of members

45. Subject to any rights or restrictions for the time being attached to any class

or classes of shares, on a show of hands every member present in person shall have

one vote, and on a poll every member shall have one vote for each share of which he

is the holder. On a poll votes may be given either personally or by proxy.

46. No member shall be entitled to vote at any general meeting unless all calls

or other sums presently payable by him in respect of shares in the company have

been paid.

47. No objection shall be raised to the qualification of any voter except at the

meeting or adjourned meeting at which the vote objected to is given or tendered, and

every vote not disallowed at such meeting shall be valid for all purposes. Any such

objection made in due time shall be referred to the chairman of the meeting, whose

decision shall be final and conclusive.

48. The instrument appointing a proxy and the power of attorney or other

authority, if any, under which it is signed or a notarially certified copy of that power

or authority shall be deposited at the registered office of the company or at such

other place in Malta as is specified for that purpose in the notice convening the

meeting, not less than twenty-four hours before the time for holding the meeting or

adjourned meeting, at which the person named in the instrument proposes to vote, or,

in the case of a poll, not less than twenty-four hours before the time appointed for

the taking of the poll, and in default the instrument of proxy shall not be treated as

valid.

C OM PA N I E S

49. An instrument appointing a proxy shall be in the following form or a form as

near thereto as circumstances permit:......................................................(name of

the company)

"I/We...............................................................

of .............................................................................................................

residing at .........................................................................................................

b e i n g a m e m b e r / m e m b e r s o f t h e a b o v e - n a m e d c o m p a n y, h e r e b y a p p o i n t

..................................................... of ............................................................ or

failing him...................................... of ............................................................ as

my/our proxy to vote for me/us on my/our behalf at the (annual or extraordinary, as

t h e c a s e m a y b e ) g e n e r a l m e e t i n g o f t h e c o m p a n y, t o b e h e l d o n t h e

................................... day of ................................. 19 ......., and at any adjournment

thereof.

Signed this ................ day of ............................ 19.......

This form is to be used in favour of/against * the resolution. Unless otherwise

instructed, the proxy will vote as he thinks fit.".

*Strike out whichever is not desired.

Directors

50. The remuneration of the directors shall from time to time be determined by

the company in general meeting. Such remuneration shall be deemed to accrue from

day to day. The directors may also be paid all travelling, hotel and other expenses

properly incurred by them in attending and returning from meetings of the directors

or any committee of the directors or general meetings of the company or in

connection with the business of the company.

51. The shareholding qualification for directors may be fixed by the company in

general meeting, and unless and until so fixed no qualification shall be required.

Powers and duties of directors

52. The directors shall exercise their powers subject to any of these regulations,

to the provisions of the Act and to such regulations, being not inconsistent with the

aforesaid regulations or provisions, as may be prescribed by the company in general

meeting; but no regulation made by the company in general meeting shall invalidate

any prior act of the directors which would have been valid if that regulation had not

been made.

53. The directors shall have power to appoint any person to be the attorney of

the company for such purposes and with such powers, authorities and discretion (not

exceeding those vested in or exercisable by the directors under these regulations)

and for such period and subject to such conditions as they may think fit, and any

such powers of attorney may contain such provisions for the protection and

convenience of persons dealing with any such attorney as the directors may think fit,

and may also authorise any such attorney to delegate all or any of the powers,

authorities and discretions vested in him.

54. A director shall not vote at a meeting of the directors in respect of any

contract or arrangement in which he is interested, and if he shall do so his vote shall

not be counted, nor shall he be counted in the quorum present at the meeting, but

neither of these prohibitions shall apply to -

(a) any arrangement for giving any director any security or indemnity in

respect of money lent by him to or obligations undertaken by him for

the benefit of the company; or

(b) any arrangement for the giving by the company of any security to a third

party in respect of a debt or obligation of the company for which the

director himself has assumed responsibility in whole or in part under a

guarantee or indemnity or by the deposit of a security; or

(c) any contract by a director to subscribe for or underwrite shares or

debentures of the company; or

(d) any contract or arrangement with any other company in which he is

interested only as an officer of the company or as a holder of shares or

other securities,

and these prohibitions may at any time be suspended or relaxed to any extent, and

either generally or in respect of any particular contract, arrangement or transaction,

by the company in general meeting.

55. The directors shall cause minutes to be made in books provided for the

purpose -

(a) of all appointments of officers made by the directors;

(b) of the names of the directors present at each meeting of the directors

and of any committee of the directors;

(c) of all resolutions and proceedings at all meetings of the company, and of

the directors, and of committees of directors.

56. The directors on behalf of the company may pay a gratuity or pension or

allowance on retirement to any director who has held any other salaried office or

place of profit with the company or to his widow or dependants and may make

contributions to any fund and pay premiums for the purchase or provision of any

such gratuity, pension or allowance.

Rotation of Directors

57. At the first annual general meeting of the company all the directors shall

retire from office, and at the annual general meeting in every subsequent year one-

third of the directors for the time being or, if their number is not three or a multiple

of three, then the number nearest one-third, shall retire from office.

58. The directors to retire in every year shall be those who have been longest in

office since their last election, but as between persons who became directors on the

same day those to retire shall (unless they otherwise agree among themselves) be

determined by lot.

59. A retiring director shall be eligible for re-election.

60. The company at the meeting at which a director retires in manner aforesaid

may fill the vacated office by electing a person thereto.

61. No person other than a director retiring at the meeting shall unless

recommended by the directors be eligible for election to the office of director at any

general meeting unless not less than three nor more than fourteen days before the

date appointed for the meeting there shall have been left at the registered office of

the company notice in writing, signed by a member duly qualified to attend and vote

at the meeting for which such notice is given, of his intention to propose such person

for election, and also notice in writing signed by that person of his willingness to be

elected.

C OM PA N I E S

Proceedings of directors

62. The directors may meet together for the despatch of business, adjourn and

otherwise regulate their meetings, as they think fit. Questions arising at any meeting

shall be decided by a majority of votes. In case of an equality of votes, the chairman

shall have a second or casting vote. A director may, and the company secretary on

the requisition of a director shall, at any time summon a meeting of the directors. It

shall not be necessary to give notice of a meeting of directors to any director for the

time being absent from Malta.

63. The quorum necessary for the transaction of the business of the directors

may be fixed by the directors, and unless so fixed shall be two.

64. The continuing directors may act notwithstanding any vacancy in their body,

but, if and so long as their number is reduced below the number fixed by or pursuant

to the regulations of the company as the necessary quorum of directors, the

continuing directors or director may act for the purpose of increasing the number of

directors to that number, or of summoning a general meeting of the company, but for

no other purpose.

65. The directors may elect a chairman of their meetings and determine the

period for which he is to hold office; but if no such chairman is elected, or if at any

meeting the chairman is not present within five minutes after the time appointed for

holding the same, the directors present may choose one of their number to be

chairman of the meeting.

66. A resolution in writing, signed by all the directors for the time being entitled

to receive notice of a meeting of the directors, shall be as valid and effectual as if it

had been passed at a meeting of the directors duly convened and held.

Delegation of directors’ powers

67. The directors may from time to time appoint a managing director or a

director or directors holding any other executive office or offices from amongst

themselves delegating to him or them any of the powers provided in regulation 70.

68. Each such appointment shall be for such period and on such terms as the

directors think fit, and, subject to the terms of any agreement entered into in any

particular case, the directors may revoke such appointment. Any director so

appointed shall not, whilst holding that office, be subject to retirement by rotation or

be taken into account in determining the rotation or retirement of directors, but his

appointment shall be automatically determined if he ceases for any reason to be a

director.

69. A managing director or director holding any other executive office shall

receive such remuneration as the directors, subject to the approval of the company in

general meeting, may from time to time determine.

70. The directors may delegate to any managing director, or to any director

holding any other executive office, any of the powers exercisable by them upon such

terms and conditions and with such restrictions as they may think fit, and either

collaterally with or to the exclusion of their own powers and may from time to time

revoke, withdraw or vary any of such powers.

71. The directors may also appoint a committee consisting of one of more

persons selected from among themselves delegating to it any of their powers. Any

such delegation may be made subject to any condition or requirement as the directors

may impose and may be made either collaterally with or to the exclusion of their

own powers, and the directors may from time to time revoke, withdraw, alter or vary

all or any of such powers. Any such committee shall, subject to any of the said

conditions or requirements, regulate its own proceedings, in so far as possible in like

manner as if its meetings were meetings of the directors.

Company Secretary

72. Without prejudice to the provisions of the Act regulating the appointment

and functions of the company secretary, the appointment or replacement of the

company secretary and the conditions of holding office shall be determined by the

directors. The company secretary shall be responsible for keeping

-

the minute book of general meetings of the company;

-

the minute book of meetings of the board of directors;

-

the register of members;

-

the register of debentures; and

-

such other registers and records as the company secretary may be required to

keep by the board of directors.

The company secretary shall

-

ensure that proper notices are given of all meetings; and

-

ensure that all returns and other documents of the company are prepared and

delivered in accordance with the requirements of the Act.

Dividends and reserve

73. The company in general meeting may declare dividends, but no dividend

shall exceed the amount recommended by the directors.

74. The directors may from time to time pay to the members such interim

dividends as appear to the directors to be justified by the profits of the company.

75. The directors may, before recommending any dividend, set aside out of the

profits of the company such sums as they think proper as a reserve or reserves which

shall, at the discretion of the directors, be applicable for any purpose to which the

profits of the company may be properly applied, and pending such application may,

at the like discretion, either be employed in the business of the company or be

invested in such investments, other than shares of the company, as the directors may

from time to time think fit. The directors may also without placing the same to

reserve carry forward any profits which they may think prudent not to divide.

76. Subject to the rights of persons, if any, entitled to shares with special rights

as to dividend, all dividends shall be declared and paid according to the amounts

paid or credited as paid on the shares in respect whereof the dividend is paid, but no

amount paid or credited as paid on a share in advance of calls shall be treated for the

purposes of this regulation as paid on the share. All dividends shall be apportioned

and paid proportionately to the amounts paid or credited as paid on the shares during

any portion or portions of the period in respect of which the dividend is paid; but if

any share is issued on terms providing that it shall rank for dividend as from a

particular date such share shall rank for dividend accordingly.

77. The directors may deduct from any dividend payable to any member all

sums of money, if any, presently payable by him to the company on account of calls

or otherwise in relation to the shares of the company.

78. No dividend shall bear interest against the company.

Accounts

79. Subject to the provisions of article 180 of the Act, the directors shall from

C OM PA N I E S

time to time determine whether and to what extent and at what times and places and

under what conditions or regulations the annual accounts and accounting records of

the company or any of them shall be open to the inspection of members not being

directors, and no member, not being a director, shall have any right of inspecting any

such account or record or other document of the company except as conferred by law

or authorised by the directors or by the company in general meeting.

Capitalisation of profits

80. The company in general meeting may upon the recommendation of the

directors resolve that it is desirable to capitalise any part of the amount for the time

being standing to the credit of any of the company’s reserve accounts or to the credit

of the profit and loss account or otherwise available for distribution, and accordingly

that such sum be set free for distribution amongst the members who would have been

entitled thereto if distributed by way of dividend and in the same proportions on

condition that the same be not paid in cash but be applied either in or towards paying

up any amounts for the time being unpaid on any shares held by such members

respectively or paying up in full unissued shares or debentures of the company to be

allotted and distributed credited as fully paid up to and amongst such members in the

proportion aforesaid, or partly in the one way and partly in the other, and the

directors shall give effect to such resolution

Provided that a share premium account and a capital redemption reserve may, for

the purposes of this regulation, only be applied in the paying up of unissued shares to

be issued to members of the company as fully paid bonus shares

Provided further that the directors may in giving effect to such resolution make

such provision by payment in cash or otherwise as they think fit for the case of

shares or debentures becoming distributable in fractions.

Notice

81. A notice may be given by the company to any member either personally or

by sending it by post to him or to his registered address, or, if he has no registered

address in Malta, to the address, if any, in Malta supplied by him to the company for

the giving of notice to him. Where a notice is sent by post, service of the notice shall

be deemed to be effected by properly addressing, prepaying and posting a letter

containing the notice, and to have been effected in the case of a notice of a meeting

at the expiration of forty-eight hours after the letter containing the same is posted,

and in any other case at the time at which the letter would be delivered in the

ordinary course of post.

82. Notice of every general meeting shall be given in the manner hereinbefore

authorised to -

(a) every registered member except those members who, having no

registered address in Malta, have not supplied to the company an

address in Malta for the giving of notices to them; and

(b) the auditor for the time being of the company.

No other person shall be entitled to receive notices of general meetings.

Indemnity

83. Every managing director, director holding any other executive office or

other director, and every agent, auditor or company secretary and in general any

officer for the time being of the company shall be indemnified out of the assets of

the company against any liability incurred by him in defending any proceedings in

which judgment is given in his favour or in which he is acquitted.

PART II - REGULATIONS FOR THE MANAGEMENT

Amended by

XI.2017.17

OF A PRIVATE COMPANY

1. The regulations contained in Part I of this Schedule (with the exception of

regulation 14) shall apply.

2. The company is a private company and accordingly -

(a) the right to transfer shares is restricted in a manner hereinafter

prescribed;

(b) the number of members of the company is limited to fifty; and

(c) any invitation to the public to subscribe for any shares or debentures of

the company is prohibited.

3. The directors may, in their absolute discretion and without assigning any

reason therefor, decline to register any transfer of any share, whether or not it is a

fully paid share.

4. The directors may at any time require any person whose name is entered in

the register of members of the company to furnish them with any information,

supported, if the directors so require, by an affidavit, which they may consider

necessary for the purposes of determining whether or not the company satisfies the

conditions of qualification as an exempt company mentioned in sub-article (2) of

article 211 of the Act.

C OM PA N I E S

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 2 Interpretation. — COMPANIES ACT Open official source

(1) In this Act, unless the context otherwise requires, the

following expressions have the meaning hereby assigned to them -

"Agency" means the agency established by the Malta Business

Registry (Establishment as an Agency) Order;

"annual accounts" means the individual accounts required by

article 167 and, where applicable, also the consolidated accounts

required by article 170;

"appointed day" means the date appointed by the Minister for the

coming into force of this Act;

"approval", in relation to a prospectus, means the positive act at the

outcome of the scrutiny of the completeness of the prospectus by the

Malta Financial Services Authority or the regulatory authority;'

"associated undertaking" means an under-taking in which

another undertaking has a participating interest, and over whose

operating and financial policies that other undertaking exercises

significant influence. An undertaking is presumed to exercise a

significant influence over another undertaking where it has 20% or

more of the shareholders’ or members’ voting rights in that other

undertaking;

"auditor" shall have the meaning assigned to it in the

Accountancy Profession Act or regulations issued in terms thereof;

"beneficial owner" shall, unless otherwise stated, have the same

meaning assigned to it in the Prevention of Money Laundering and

Funding of Terrorism Regulations, and "beneficial ownership" shall

be construed accordingly;

"body corporate" means any entity having a legal personality

distinct from that of its members, and includes a foreign

corporation;

"central securities depository" means a legal person, that

operates a securities settlement system and is authorised to provide

at least one other of the following services

(i)

initial recording of securities in a book-entry system;

(ii) providing and maintaining securities accounts at the

top tier level;

"certificate of registration" when used in relation to a company

means a certificate of registration issued under this Act or under the

Ordinance and the words "registration", "registered" and their

derivatives shall be construed accordingly;

"commercial partnership" means a company or other commercial

partnership formed and registered under this Act or formed and

registered under the Ordinance where applicable;

"the Community" means the European Community established

by the Treaty of Rome in 1957 and amended institutionally and

otherwise in 1986 by the Single European Act, in 1993 by the

Treaty on European Union, in 1997 by the Treaty of Amsterdam

and in 2001 by the Treaty of Nice, and as amended by accession

agreements and as may be further amended from time to time;

"company" means a company formed and registered under Part V

of this Act or the Ordinance;

""company secretary" means a person who holds the office of a

company secretary in terms of article 138;

"consolidated accounts" means the accounts required by article

170;

"contributory" shall, unless otherwise stated, have the meaning

assigned to it by articles 215 to 217;

"court" means the Civil Court (Commercial Section);

"debenture" includes debenture stock, bonds and any other debt

securities of a company;

"dematerialised form" in relation to securities issued by a company

means the form where such securities exist only as book-entry records;

"director" includes any person occupying the position of director

of a company by whatever name he may be called carrying out

substantially the same functions in relation to the direction of the

company as those carried out by a director;

"directors’ report" in relation to a company, means the directors’

report required by article 177;

"EEA State" means a State which is a contracting party to the

agreement on the European Economic Area signed at Oporto on the

2nd May, 1992 as amended by the Protocol signed at Brussels on

the 17th March, 1993 and as amended by any subsequent acts;

"electronic means" means electronic equipment used for the

processing, including digital compression, and the storage of data, and

through which information is initially sent and received at its

destination; that information being entirely transmitted, conveyed and

received in a manner to be determined by the Registrar;

"equity securities" means shares and other securities which are

equivalent to shares in companies or which are convertible to such

shares, or securities which give such right of conversion, provided

such securities of the latter type are issued by the issuer of the

underlying shares or by an entity belonging to the group of the said

issuer;

"euro" refers to the currency unit of the participating states in the

European Monetary Union;

"exempt company" means a company satisfying the conditions

laid down in sub-article (2) of article 211;

"expert", except where otherwise specifically defined in this Act,

means an auditor whether or not assisted by a specialist valuer;

"extraordinary resolution" has the meaning given to it by article

135;

"group company", in relation to any company, means any body

corporate which is that company’s subsidiary or parent company, or

a subsidiary of that company’s parent company, and the term

"group" shall be construed accordingly as well as meaning a parent

undertaking and all its subsidiary undertakings;

(i)

for all Community issuers of securities which are not

mentioned in paragraph (ii) hereof, the Member State

where the issuer has its registered office;

(ii) for any issues of non-equity securities whose

denomination per unit amounts to at least one thousand

euro (1,000), and for any issues of non-equity

securities giving the right to acquire any transferable

securities or to receive a cash amount, as a

consequence of their being converted or the rights

conferred by them being exercised, provided that the

issuer of the non-equity securities is not the issuer of

the underlying securities or an entity belonging to the

group of the latter issuer, the Member State where the

issuer has its registered office, or where the securities

were offered to the public, at the choice of the issuer

or the offeror, as the case may be. The same regime

shall be applicable to non-equity securities in a

currency other than the euro, provided that the value of

such minimum denomination is nearly equivalent to one

thousand euro (1,000);

(iii) for all issuers of securities incorporated in a third

country, which are not mentioned in paragraph (ii)

hereof, the Member State where

(a) the securities are intended to be offered to the

public for the first time after the date of entry

into force of this provision; or

(b) where the first application for admission to

trading on a regulated market is made, at the

choice of the issuer, the offerer or the person

asking for admission, as the case may be, subject

to a subsequent election by issuers incorporated

in a third country in the following

circumstances

i. where the home Member State was not

determined by their choice; or

ii. in accordance with point (1)(i)(iii) of Article

2 of Directive 2004/109/EC of the European

Parliament and of the Council of 15

December 2004 on the harmonisation of

transparency requirements in relation to

information about issuers whose securities

are admitted to trading on a regulated

market;

"immobilisation" means the act of concentrating location of

physical certificates relating to securities issued by a company in a

central securities depository in a way which enables subsequent

transfers to be made by book-entry;

"individual accounts" means the accounts required by article

167;

"investment company with fixed share capital" means a public

company falling within the terms of article 194;

"investment company with variable share capital" means a

company falling within the terms of article 84;

"issuer" means an entity having a legal personality distinct from

that of its members which issues or proposes to issue securities;

"Maltese regulated market" means a regulated market duly

authorised by the competent authority in accordance with article 4

of the Financial Markets Act;

"member", except where otherwise specifically defined, means a

shareholder of a company and a partner in any other commercial

partnership;

" M e m b e r St a t e " m e a n s a m e m b e r s t a t e o f t h e E u r o p e a n

Community;

"Minister" means, unless otherwise stated, the Minister

responsible for the registration of commercial partnerships;

"money market instruments" means those classes of instruments

which are normally dealt in on the money market, such as treasury

bills, certificates of deposit and commercial papers and excluding

instruments of payment;

"name" in relation to an individual means that individual’s first

name or names and surname;

"notice" shall mean a notice in writing of any kind;

"offer of securities to the public", unless otherwise stated, shall have

the same meaning assigned to it in the Financial Markets Act;

"officer" in relation to a company, includes a director, manager

or company secretary, but does not include an auditor;

"the Ordinance" means the Commercial Partnerships Ordinance * ;

"ordinary resolution" has the meaning given to it by article 135;

"oversea company" means a body corporate constituted or

*Repealed by this Act.

incorporated outside Malta;

"participating interest" means rights in the capital of other

undertakings, whether or not represented by certificates, which, by

creating a durable link with those undertakings, are intended to

contribute to the activities of the undertaking which holds those

rights. The holding of part of the capital of another undertaking is

presumed to constitute a participating interest where it exceeds

twenty per cent of the said capital. An interest in shares includes an

interest which is convertible into an interest in shares and an option

to acquire an interest in shares. Interests in shares held by

subsidiary undertakings or held by third parties on behalf of the

company or its subsidiary undertakings shall be deemed to be held

by the company;

"prescribed" means prescribed by regulations made or deemed to

have been made under this Act, and where no regulation is in force

in respect of a matter which may or is to be prescribed, means

determined, approved or allowed by the Minister;

"principal office" means, in relation to an undertaking not having

a registered office, the office which, for the purposes of that

undertaking serves the same or a similar purpose as the registered

office of a commercial partnership under this Act;

"private company" means a private company as defined in article

209;

" p r o s p e c t u s " m e a n s a n y p r o s p e c t u s , n o t i c e , c i r c u l a r,

advertisement or other invitation, offering to the public for

subscription any shares or debentures of a company or other

commercial partnership;

"Prospectus Regulation" means Regulation (EU) No. 2017/1129 of

the European Parliament and of the Council of the 14 June 2017 on the

prospectus to be published when securities are offered to the public or

admitted to trading on a regulated market, and repealing Directive

2003/71/EC, as may be amended from time to time, and includes any

implementing measures, implementing technical standards, regulatory

technical standards and similar measures that have been, or may be

issued thereunder;

"public company" means a company which is not a private

company;

"public-interest entities" means under-takings or entities as

defined in article 2(1) of the Accountancy Profession Act;

"recognised jurisdiction" means

(a) a Member State;

(b) an EEA State;

(c) any country that is a member of the Organisation for

Economic Co-operation and Development (OECD)

established in 1961;

(d) any country that is a signatory of the IOSCO

Multilateral Memorandum of Understanding; or

(e) any other jurisdiction where the competent authority,

as referred to in the Financial Markets Act, has a

memorandum of understanding covering securities;

"Registrar" means the person appointed by the Minister pursuant

to article 400;

"regulated market" means a regulated market as defined in the

Financial Markets Act and includes a Maltese regulated market;

"regulatory authority" means a body or bodies designated by a

Member State other than Malta or an EEA State to carry out duties

provided for in the Prospectus Directive;

"resident", for the purposes of this Act, means -

(a) any natural person regardless of nationality who is

ordinarily resident in Malta;

(b) any body corporate established under the law of Malta;

"security" includes a share, debenture or any other similar

instrument issued by a company or other commercial partnership

Provided that for the purpose of sub-article (3) of this

article and of Chapter III of Part V and Part A of the Second

Schedule of this Act, the definition of "security" does not include

money market instruments having a maturity of less than twelve

months;

"share" includes stock except where a distinction between stock

and shares is expressed or implied;

"shareholder" means a person entered in the register of members

of a company pursuant to article 123;

" s m a l l a n d m e d i u m - s i z e d e n t e r p r i s e s " o r "S M E s " m ea n s

companies which, according to their last annual or consolidated

accounts, meet at least two of the following three criteria: an

average number of employees, during the financial year, of less

than 250, a total balance sheet not exceeding forty-three million

euro (43,000,000) and an annual net turnover not exceeding fifty

million euro (50,000,000);

"system of interconnection of registers" means the system of

interconnection of central, commercial and companies registers

composed of the registers of Member States and EEA States, the

European central platform, and the European e-Justice portal

serving as the European electronic access point, in terms of

Directive 2009/101/EC, as amended by Directive 2012/17/EU;

"third country" means a country that is not a Member State or an

EEA State;

"true and fair view" refers -

(a) in the case of individual accounts, to the requirements

of article 167, and

(b) in the case of consolidated

accounts,

to

the

requirements of article 171;

"undertaking" means a body corporate or unincorporate which

carries on a trade or business.

(2)

(a) For the purposes of this Act "parent company" is a

company which -

(i)

has a majority of the members’ voting rights in

another undertaking (a subsidiary undertaking);

or

(ii)

has the right to appoint or remove a majority of

the members of the board of directors or persons

entrusted with the administration of another

undertaking (a subsidiary undertaking) and is at

the same time a member of that undertaking; or

(iii)

has the right to exercise a dominant influence

over an undertaking (a subsidiary undertaking)

pursuant to a contract entered into with that

undertaking or to a provision in that

undertaking’s memorandum or articles of

association; or

(iv)

is a member of an undertaking and controls

alone, pursuant to an agreement with other

members of that undertaking (a subsidiary

undertaking), a majority of members’ voting

rights in that undertaking; or

(v)

holds a participating interest in another

undertaking and has the power to exercise, or

actually exercises a dominant influence over that

undertaking (a subsidiary undertaking) or it

manages the subsidiary undertaking on a unified

basis together with it;

and "parent undertaking" shall be construed

accordingly and shall include an undertaking which

controls one or more subsidiary undertakings.

(b) For the purposes of the definition in paragraph (a), the

provisions of the Ninth Schedule shall apply.

(c) The term "subsidiary undertaking" shall be construed in

accordance with paragraph (a) and shall include an

undertaking controlled by a parent undertaking including

any subsidiary undertaking of an ultimate parent

undertaking.

(d) References to shares of undertakings in this Act shall

include references to beneficial interests in

undertakings where the capital of such undertakings is

not divided into shares; and references to "relevant

shares", "the issue of equity shares", "the issued share

capital" and "the nominal value of the equity shares"

shall be construed accordingly.

(e) Other terms appropriate to companies shall be

construed, in relation to an undertaking which is not a

company, as references to the corresponding persons,

officers, documents or organs, as the case may be,

appropriate to undertakings of that description.

C OM PA N I E S

(3)

(a) (deleted bu Act V of 2020).

(b) The following shall not constitute offers of securities

made to the public

(i)

an offer of securities made only to qualified

investors; or

(ii) an offer made to less than one hundred and fifty

persons per Member State or EEA State, not

including qualified investors; or

(iii) an offer where the minimum consideration

which may be paid by any person for securities

acquired pursuant to the offer is at least one

hundred thousand euro (100,000.00), for each

separate offer; or

(iv) an offer of securities where the nominal value of

each security amounts to at least one hundred

thousand euro (100,000.00), or the total

consideration of the offer in the European Union

and the EEA shall not exceed one hundred

thousand euro (100,000.00), which limit shall be

calculated over a period of twelve months; or

(v) Repealed by Act XVIII.2024.2.

(vi) an offer in respect of non-equity securities

issued in a continuous or repeated manner by

credit institutions where the total consideration of

the offer in the European Union and the EEA, over

a period of twelve months is less than seventy five

million euro (75,000,000), provided that these

securities

(a) are not subordinated, convertible or

exchangeable; and

(b) do not give a right to subscribe to or

acquire other types of securities and they

are not linked to a derivative instrument

Provided that any subsequent resale of securities

which were previously the subject of one or more of

the types of offer mentioned in sub-paragraphs (i) to

(iv) shall be regarded as a separate offer and the

definition set out in paragraph (a) regarding an "offer

of securities to the public" shall apply for the purpose

of deciding whether that resale is an offer of securities

to the public. The placement of shares through

financial intermediaries shall be subject to publication

of a prospectus if none of the conditions mentioned in

sub-paragraphs (i) to (iv) above are met for the final

placement

Provided further that in the case of any such subsequent

resale of securities or final placement of securities

through financial intermediaries, it is not necessary to

draw up another prospectus as long as a valid prospectus

is available in accordance with paragraph 21 of Part A of

the Second Schedule to this Act and the issuer or the

person responsible for drawing up such a prospectus

consents to its use by means of a written agreement

Provided further and without prejudice to Articles 1(4)

and 4 of the Prospectus Regulation, offers of securities

to the public shall be exempt from the obligation to

publish a prospectus, in accordance with Article 3(1)

of the Prospectus Regulation as long as

(a)

such offers are not subject to

notification in accordance with Article 25 of the

Prospectus Regulation; and

(b)

the total consideration of each such

offer in the European Union and the EEA is less

than a monetary amount calculated over a period

of twelve (12) months which shall not exceed five

million euro (€5,000,000)

Provided further that in respect of offers mentioned in

sub-paragraph (vi) and in the third proviso, an offeror

may draw up a prospectus in accordance with any

applicable rules.

(c) Where the offer is made by a commercial partnership,

not being a company and whether formed or registered

under this Act or any other Act, the provisions of this

article shall apply to such offer mutatis mutandis.

(d) The Minister may by Order published in the Gazette

revise or amend any of the figures or amounts referred

to in this article.

(4) For the purposes of this Act, "generally accepted

accounting principles and practice" shall have the meaning

assigned to it in the Accountancy Profession Act or regulations

issued in terms thereof.

(5) For the purposes of this Act, where a document required to

be delivered to the Registrar for registration is required to state the

name and residence or address of a person, it shall be deemed to

require further the official identification, by number or otherwise

of such person, as may be applicable.

(6) For the purposes of this Act, where any document, which is

required to be delivered or given to or served on the Registrar, is to

be signed by an expert and such expert is a company, partnership or

other body corporate, such document shall carry the signature of an

individual who is a director, partner or equivalent officer, as the

case may be, duly authorised to sign on its behalf.

(7) In this Act and in any regulations made thereunder, if there

is any conflict between the English and Maltese texts, the English

text shall prevail.

Laws of Malta — Chapter 386 — COMPANIES ACT

Second Schedule — COMPANIES ACT Open official source

Amended by

IV. 2003.164;

PART A

L.N. 390 of 2005;

IX. 2008.41;

(Article 90)

L.N. 171 of 2012;

L.N. 337 of 2012;

Deleted by;

V. 2020.38.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 3 References in other Acts. — COMPANIES ACT Open official source

(1) References in any other law to the Ordinance shall be

construed as a reference to this Act and references in any other law

to a provision of the Ordinance shall be construed, insofar as

applicable, as a reference to the corresponding provision of this

Act; and references in any other law to a partnership formed and

registered under the Ordinance shall be construed as a reference, or

as including a reference, to a commercial partnership formed and

registered under this Act.

(2) The table of concordance set out in the Twelfth Schedule to

this Act may be used, insofar as applicable, in determining the

corresponding provisions in accordance with sub-article (1).

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 3A Transposition and implementation of EU instruments. — COMPANIES ACT Open official source

This Act, in part, seeks to transpose, implement and give

effect to the provisions and requirements of the following European

Union Directives and Regulations, as may be amended from time to

time, including any implementing measures that have been or may

be issued thereunder

(a) Sixth Council Directive 82/891/EEC of 17 December

1982 based on Article 54(3)(g) of the Treaty,

concerning the division of public limited liability

companies;

(b) Eleventh Council Directive 89/666/EEC of 21

December 1989 concerning disclosure requirements in

respect of branches opened in a Member State by

certain types of company governed by the law of

another State;

(c) Directive 2003/58/EC of 15 July 2003 amending

Council Directive 68/151/EEC, as regards disclosure

requirements in respect of certain types of companies;

(d) Directive 2003/71/EC of the European Parliament and

of the Council of 4 November 2003 on the prospectus

to be published when securities are offered to the

public or admitted to trading and amending Directive

2001/34/EC;

(e) Directive 2004/109/EC of the European Parliament

and of the Council of 15 December 2004 on the

harmonisation of transparency requirements in relation

to information about issuers whose securities are

admitted to trading on a regulated market and

amending Directive 2001/34/EC;

(f) Directive 2005/56/EC of the European Parliament and

of the Council of 26 October 2005 on cross-border

mergers of limited liability companies;

(g) Directive 2006/43/EC of the European Parliament and

of the Council of 17 May 2006 on statutory audits of

annual accounts and consolidated accounts, amending

Council Directives 78/660/EEC and 83/349/EEC and

repealing Council Directive 84/253/EEC, which

Directive was itself amended by Directive 2014/56/EU

of the European Parliament and of the Council of 16

April 2014;

(h) Directive 2006/68/EC of the European Parliament and

of the Council of 6 September 2006 amending Council

Directive 77/91/EEC as regards the formation of

public limited liability companies and the maintenance

and alteration of their capital;

(i)

Directive 2007/63/EC of the European Parliament and

of the Council of 13 November 2007 amending

Council Directives 78/855/EEC and 82/891/EEC as

regards the requirement of an independent expert’s

report on the occasion of merger or division of public

limited liability companies;

(j)

Directive 2009/101/EC of the European Parliament

and of the Council of 16 September 2009 on

coordination of safeguards which, for the protection of

the interests of members and third parties, are required

by Member States of companies within the meaning of

the second paragraph of Article 48 of the Treaty, with

a view to making such safeguards equivalent;

(k) Directive 2009/102/EC of the European Parliament

and of the Council of 16 September 2009 in the area of

company law on single-member private limited

liability companies;

(l)

Directive 2009/109/EC of the European Parliament

and of the Council of 16 September 2009 amending

Council Directives 77/91/EEC, 78/855/EEC and 82/

891/EEC, and Directives 2005/56/EC as regards

reporting and documentation requirements in the case

of mergers and divisions;

(m) Directive 2011/35/EU of the European Parliament and

of the Council of 5 April 2011 concerning mergers of

public limited liability companies;

(n) Directive 2012/17/EU of the European Parliament and

of the Council of 13 June 2012 amending Council

Directive 89/666/EEC and Directives 2005/56/EC and

2009/101/EC of the European Parliament and of the

Council as regards the interconnection of central,

commercial and companies registers;

(o) Directive 2012/30/EU of the European Parliament and

of the Council of 25 October 2012 on coordination of

safeguards which, for the protection of the interests of

members and others, are required by Member States of

companies within the meaning of the second paragraph

of Article 54 of the Treaty on the Functioning of the

European Union, in respect of the formation of public

limited liability companies and the maintenance and

alteration of their capital, with a view to making such

safeguards equivalent;

(p) Directive 2013/34/EU of the European Parliament and

of the Council of 26 June 2013 on the annual financial

statements, consolidated financial statements and

related reports of certain types of undertakings,

amending Directive 2006/43/EC of the European

Parliament and of the Council and repealing Council

Directives 78/660/EEC and 83/349/EEC hereinafter in

this Act referred to as the "Accounting Directive;

(q) Directive 2013/50/EU of the European Parliament and

of the Council of 22 October 2013 amending Directive

2004/109/EC of the European Parliament and of the

Council on the harmonisation of transparency

requirements in relation to information about issuers

whose securities are admitted to trading on a regulated

market, Directive 2003/71/EC of the European

Parliament and of the Council on the prospectus to be

published when securities are offered to the public or

admitted to trading and Commission Directive 2007/

14/EC laying down detailed rules for the

implementation of certain provisions of Directive

2004/109/EC;

(r) Council Regulation (EEC) No 2137/85 of 25 July 1985

on the European Economic Interest Grouping (EEIG);

(s) Council Regulation (EC) No 2157/2001 of 8 October

2001 on the Statute for a European company (SE);

(t)

Regulation (EU) No. 537/2014 of the European

Parliament and of the Council of 16 April 2014 on

specific requirements regarding statutory audit of

public-interest entities hereinafter referred to as "the

Audit Regulation;

(u) Directive 2014/95/EU of the European Parliament and

of the Council of 22 October 2014 as regards

disclosure of non-financial and diversity information

by certain large undertakings and groups, amending

Directive 2013/34/EU of the European Parliament and

of the Council of 26 June 2013 on the annual financial

statements, consolidated financial statements and

related reports of certain types of undertakings;

(v) Directive (EU) 2019/1151 of the European Parliament

and of the Council of 20 June 2019 amending

Directive (EU) 2017/1132 as regards the use of digital

tools and processes in company law, and Directive

(EU) 2019/2121 of the European Parliament and of the

Council of 27 November 2019 amending Directive

(EU) 2017/1132 as regards cross-border conversions,

mergers and divisions;

(w) Directive (EU) 2021/2101 of the European Parliament

and of the Council of 24 November 2021 amending

Directive 2013/34/EU as regards disclosure of income

tax information by certain undertakings and branches,

hereinafter in this Act referred to as the "Country-by-

Country Reporting Directive

which shall be interpreted and applied accordingly.

PART II - GENERAL PROVISIONS

Laws of Malta — Chapter 386 — COMPANIES ACT

Third Schedule — COMPANIES ACT Open official source

Substituted by

XXXI. 2015.23.

(Articles 167 and 171)

Amended by

I.2026.29.

PART I

ADDITIONAL PROVISIONS APPLICABLE TO THE ANNUAL FINANCIAL

ACCOUNTS OF LARGE UNDERTAKINGS, MEDIUM-SIZED UNDERTAKINGS

AND CERTAIN OTHER UNDERTAKINGS,

WHERE APPLICABLE

1. For the purpose of Chapter X of Title I of Part V and this Schedule, the

following definitions shall apply

"large groups" means groups consisting of parent and subsidiary undertakings to be

included in a consolidation and which, on a consolidated basis, exceed the limits of at

least two of the following three criteria on the balance sheet date of the parent

undertaking

(i)

balance sheet total: twenty-five million euro (€25,000,000)

computed net, or thirty million euro (€30,000,000) computed gross;

(ii) net turnover: fifty million euro (€50,000,000) computed net, or

sixty million euro (€60,000,000) computed gross;

(iii) average number of employees during the financial year: two

hundred and fifty (250);

"large undertakings" means undertakings which on their balance sheet dates exceed

at least two of the following three criteria

(i)

balance sheet total: twenty-five million euro (€25,000,000);

(ii)

net turnover: fifty million euro (€50,000,000);

(iii) average number of employees during the financial year: two

hundred and fifty (250);

"medium-sized groups" means groups which are not small groups, which consist of

parent and subsidiary undertakings to be included in a consolidation and which, on a

consolidated basis, do not exceed the limits of at least two of the following three criteria

on the balance sheet date of the parent undertaking

(i)

balance sheet total: twenty-five million euro (€25,000,000)

computed net, or thirty million euro (€30,000,000) computed gross;

(ii) net turnover: fifty million euro (€50,000,000) computed net, or

sixty million euro (€60,000,000) computed gross;

(iii) average number of employees during the financial year: two

hundred and fifty (250);

"medium-sized undertakings" means undertakings which are not small companies,

as defined in article 185(1), and which on their balance sheet dates do not exceed the

limits of at least two of the following three criteria

(i)

balance sheet total: twenty-five million euro (€25,000,000);

(ii)

net turnover: fifty million euro (€50,000,000);

(iii) average number of employees during the financial year: two

hundred and fifty (250).

Matters applicable to medium-sized and large undertakings

2. (1) Intangible assets shall be written off over the useful economic life of the

intangible asset.

In exceptional cases where the useful life of goodwill and development costs

cannot be reliably estimated, such assets shall be written off within a maximum

period of 10 years. An explanation of the period over which goodwill is written off

shall be provided within the notes to the financial statements.

(2) Where an asset or liability relates to more than one layout item, its

relationship to the other item or items shall be disclosed either under the item where

it appears or in the notes to the accounts, if such disclosure is essential to the

comprehension of the individual accounts.

Additional disclosures for medium-sized and large undertakings and public-

interest entities

3. In the notes to the financial statements public-interest entities, large

undertakings and medium-sized undertakings shall, in addition to the information

required under other provisions of this Act and generally accepted accounting

principles and practice, disclose information in respect of

(i)

the amount and nature of individual items of income or expenditure

which are of exceptional size or incidence;

(ii) the average number of employees during the financial year broken down

by categories and, if they are not disclosed separately in the profit and

loss account, the staff costs relating to the accounting period broken

down between wages and salaries, social security costs and pension

costs.

4. In the notes to the financial statements, medium-sized and large

C OM PA N I E S

undertakings and public-interest entities shall, in addition to the information

required under this Schedule and any other provisions of this Act, disclose

information in respect of the following matters

(a) the existence of any participation certificates, convertible debentures,

warrants, options or similar securities or rights, with an indication of

their number and the rights they confer;

(b) the name and registered office of each of the undertakings in which the

undertaking, either itself or through a person acting in his own name but

on the undertaking’s behalf, holds a participating interest, showing the

proportion of the capital held, the amount of capital and reserves, and

the profit or loss for the latest financial year of the undertaking

concerned for which financial statements have been adopted; the

information concerning capital and reserve and the profit or loss may be

omitted where the undertaking concerned does not publish its balance

sheet and is not controlled by the undertaking;

(c) the name, the head or registered office and the legal form of each of the

undertakings of which the undertaking is a member having unlimited

liability;

(d) the name and registered office of the undertaking which draws up the

consolidated financial statements of the largest body of undertakings of

which the undertaking forms part as a subsidiary undertaking;

(e) the name and registered office of the undertaking which draws up the

consolidated statements of the smallest body of undertakings of which

the undertaking forms part as a subsidiary undertaking and which is also

included in the body of undertakings referred to in sub-paragraph (d);

(f)

the place where copies of the consolidated financial statements referred

to in sub-paragraphs (c) and (d) may be obtained, provided that they are

available;

(g) the nature and business purpose of the undertaking’s arrangements that

are not included in the balance sheet and the financial impact on the

undertaking of those arrangements, provided that the risks or benefits

arising from such arrangements are material and insofar as the

disclosure of such risks or benefits is necessary for the purposes of

assessing the financial position of the undertaking.

Additional disclosures applicable to large undertakings and public-interest entities

5. In the notes to the financial statements, large undertakings and public-

interest entities shall, in addition to the information required under this Schedule and

any other provisions of this Act, disclose information in respect of the total fees for

the financial year charged by each auditor or audit firm for the statutory audit of the

annual financial statements, and the total fees charged by each auditor or audit firm

for other assurance services, for tax advisory services and for other non-audit

Provided that this requirement shall not apply to the annual financial statements of

an undertaking where that undertaking is included within the consolidated financial

statements required to be drawn up under article 170, provided, however, that such

information shall be given in the notes to the consolidated financial statements.

PART II

ADDITIONAL PROVISIONS APPLICABLE

TO CONSOLIDATED ACCOUNTS

The preparation of consolidated financial statements

1. An undertaking which draws up consolidated financial statements shall

apply the same measurement bases as are applied in its annual financial statements.

However, other measurement bases in accordance with generally accepted

accounting principles and practice may be used in consolidated financial statements.

Where an undertaking uses such other measurement bases, that fact shall be

disclosed in the notes to the consolidated financial statements and reasons given.

The notes to the consolidated financial statements

2. The notes to the consolidated financial statements of large groups and

medium-sized groups shall set out the information required by Part 1 of this Third

Schedule, in addition to any other information required under other provisions of

this Act, in a way which facilitates the assessment of the financial position of the

undertakings included in the consolidation taken as a whole, taking account of the

essential adjustments resulting from the particular characteristics of consolidated

statements as compared to annual financial statements, including the following

in disclosing the amounts of emoluments and advances and credits

granted to members of the administrative, managerial and supervisory

bodies, only amounts granted by the parent undertakings to members of

the administrative, managerial and supervisory bodies of the parent

undertaking shall be disclosed.

3. The notes to the consolidated financial statements shall, in addition to the

information required under this Act, set out the following information

(a) in relation to undertakings included in the consolidation

(i) the names and registered offices of those undertakings;

(ii) the proportion of the capital held in those undertakings, other than

the parent undertaking, by the undertakings included in the

consolidation or by persons acting in their own names but on

behalf of those undertakings, and

(iii) information as to which of the conditions referred to in sub-

articles (2), (3) and (8) of article 2 of this Act following the

application of sub-articles (4), (5) and (6) of the said article 2 has

formed the basis on which the consolidation has been carried out.

This disclosure may, however, be omitted where consolidation has

been carried out on the basis of paragraph (a) of sub-article

(2)(a)(i) of article 2 of this Act and where the proportion of the

capital and the proportion of the voting rights held are the same;

(b) The information set out in sub-paragraph (a) of this paragraph shall be

given insofar as it is applicable in respect of undertakings excluded

from a consolidation on the basis that the effect of their inclusion in the

consolidation would be immaterial pursuant to the provisions of sub-

article (3) of article 170, and an explanation must be given for the

exclusion of the undertakings referred to in sub-article (4) of that

article;

(c) the names and registered offices of associated undertakings included in

the consolidation and the proportion of their capital held by

undertakings included in the consolidation or by persons acting in their

own names but on behalf of those undertakings; and

(d) in relation to each of the undertakings, other than those referred to in

sub-paragraphs (a) and (b), in which undertakings included in the

C OM PA N I E S

consolidation, either themselves or through persons acting in their own

names but on behalf of those undertakings, hold a participating interest

(i) the name and registered offices of those undertakings;

(ii) the proportion of the capital held;

(iii) the amount of the capital and reserves, and the profit or loss for

the latest financial year of the undertaking concerned for which

financial statements have been adopted.

The information concerning capital and reserves and the profit or loss may also be

omitted where the undertaking concerned does not publish its balance sheet.

4. The information required by paragraph 3(a) to (d) may take the form of a

statement filed with the Registrar. The filing of such a statement shall be disclosed in

the notes to the consolidated financial statements. Such information may be omitted

when its nature is such that its disclosure would be seriously prejudicial to any of the

undertakings to which it relates and the Registrar agrees that the information need

not be disclosed. Any such omission shall be disclosed in the notes to the

consolidated financial statements.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 4 Formation of commercial partnerships and different kinds of commercial partnerships. — COMPANIES ACT Open official source

(1)

A commercial partnership may be of the following

kinds

(a) a partnership en nom collectif; or

(b) a partnership en commandite or limited partnership; or

(c) a company.

(2) A commercial partnership other than a company may be

formed for the exercise of one or more acts of trade.

(3) A company may be formed for any lawful purpose and shall

have the status of -

(a) a public company; or

(b) a private company.

(4) A commercial partnership has a legal personality distinct

from that of its member or members, and such legal personality

shall continue until the name of the commercial partnership is

struck off the register, whereupon the commercial partnership shall

cease to exist.

Laws of Malta — Chapter 386 — COMPANIES ACT

Fourth Schedule — COMPANIES ACT Open official source

Substituted by

XXXI. 2015.24.

(Articles 213A - 213D)

Amended by

XVIII.2024.20;

XVIII.2025.59.

REPORTS ON PAYMENTS TO GOVERNMENTS AND ON INCOME TAX

INFORMATION

Part I

Report on Payments to Governments

1. For the purpose of this Part of this Schedule, the following definitions shall

apply

"undertaking active in the extractive industry" means an undertaking with any

activity involving the exploration, prospection, discovery, development, and

extraction of minerals, oil, natural gas deposits or other materials, within the

economic activities listed in Section B, Divisions 05 to 08 of Annex 1 to Regulation

(EC) No. 1893/2006 of the European Parliament and of the Council of 20 December

2006 establishing the statistical classification of economic activities NACE Revision

2;

"undertaking active in the logging of primary forests" means an undertaking with

activities as referred to in Section A, Division 02, Group 02.2 of Annex I to

Regulation (EC) No. 1893/2006, in primary forests;

"government" means any national, regional or local authority of a Member State

or of a third country. It includes a department, agency or undertaking controlled by

that authority;

"project" means the operational activities that are governed by a single contract,

licence, lease, concession or similar legal agreements and form the basis for payment

liabilities with a government. Nonetheless, if multiple such agreements are

substantially interconnected, this shall be considered a project;

"payment" means an amount paid, whether in money or in kind, for activities, as

described in the definitions "undertaking active in the extractive industry" and

"undertaking active in the logging of primary forests", of the following types

(a) production entitlements;

(b) taxes levied on the income, production or profits of companies,

excluding taxes levied on consumption such as value added taxes,

personal income taxes or sales taxes;

(c) royalties;

(d) dividends;

(e) signature, discovery and production bonuses;

(f)

licence fees, rental fees, entry fees and other considerations for licences

and, or concessions; and

(g) payments for infrastructure improvements;

"large undertakings" and "public-interest entities" shall have the same meaning as

defined in the Third Schedule and article 2 of this Act respectively.

Contents of the report

2. (1) Any payment, whether made as a single payment or as a series of related

payments, need not be taken into account in the report if it is below EUR 100 000

within a financial year.

(2) The report shall disclose the following information in relation to activities

as described in the definitions "undertaking active in the extractive industry" and

"undertaking active in the logging of primary forests" in respect of the relevant

financial year

(a) the total amount of payments made to each government;

(b) the total amount per type of payment as specified in paragraphs (a) to

(g) of the definition "payment" in paragraph 1 of this Schedule made to

each government;

(c) where those payments have been attributed to a specific project, the

total amount per type of payment as specified in paragraphs (a) to (g) of

the definition "payment" in paragraph 1 of this Schedule, made for each

such project and the total amount of payments for each such project.

Payments made by the undertaking in respect of obligations imposed at entity

level may be disclosed at the entity level rather than at project level.

(3) Where payments in kind are made to a government, they shall be reported in

value and, where applicable, in volume. Supporting notes shall be provided to

explain how their value has been determined.

The disclosure of the payments referred to in this Schedule shall reflect the

substance, rather than the form, of the payment or activity concerned. Payments and

activities may not be artificially split or aggregated to avoid the application of this

requirement.

Consolidated report on payments to governments

3. (1) Any large undertaking or any public-interest entity active in the

extractive industry or the logging of primary forests shall draw up a consolidated

report on payments to governments in accordance with this Schedule if that parent

undertaking is under the obligation to prepare consolidated financial statements as

laid down in article 170 of the Act.

C OM PA N I E S

A parent undertaking is considered to be active in the extractive industry or the

logging of primary forests if any of its subsidiary undertakings are active in the

extractive industry or the logging of primary forests.

The consolidated report shall only include payments resulting from extractive

operations and, or operations relating to the logging of primary forests.

(2) The obligation to draw up the consolidated report referred to in sub-

paragraph (1) shall not apply to

(a) a parent undertaking of a small group, as defined in article 185(5),

except where any affiliated undertaking is a public-interest entity;

(b) a parent undertaking of a medium-sized group, as defined in the Third

Schedule, except where any group undertaking is a public-interest

entity; and

(c) a parent undertaking governed by the law of a Member State which is

also a subsidiary undertaking, if its own parent undertaking is governed

by the law of a Member State.

(3) An undertaking, including a public-interest entity, need not be included in a

consolidated report on payments to governments where at least one of the following

conditions is fulfilled

(a) severe long-term restrictions substantially hinder the parent undertaking

in the exercise of its rights over the assets or management of that

undertaking;

(b) extremely rare cases where the information necessary for the

preparation of the consolidated report on payments to governments in

accordance with this Schedule cannot be obtained without

disproportionate expense or undue delay; and

(c) the shares of that undertaking are held exclusively with a view to their

subsequent resale.

The above exemptions shall apply only if they are also used for the purposes of the

consolidated financial statements.

Publication

4. (1) The report referred to in article 213A and this Schedule and the

consolidated report referred to in paragraph 3 of this Schedule on payments to

governments shall be delivered to the Registrar for registration within the period

allowed by article 183.

(2) The directors shall have responsibility for ensuring that, to the best of their

knowledge and ability, the report on payments to governments is drawn up and

published in accordance with the requirements of this Schedule.

Equivalence criteria

5. Undertakings referred to in article 213A and paragraph 3 of this Schedule

that prepare and make public a report complying with third-country reporting

requirements assessed, as equivalent to the requirements of this Schedule are exempt

from the requirements of this Schedule except for the obligation to publish this

report as laid down in paragraph 4(1) of this Schedule.

Part II

REPORT ON PAYMENTS ON INCOME TAX INFORMATION

Definitions relating to reporting on income tax information

1. For the purposes of this Part of this Schedule, the following definitions shall

apply

"consolidated financial statements" means the financial statements

prepared by a parent undertaking of a group, in which the assets, liabilities,

equity, income and expenses are presented as those of a single economic entity;

"standalone undertaking" means an undertaking which is not part of a

group as defined in article 2;

"tax jurisdiction" means a State or non-State jurisdiction which has fiscal

autonomy in respect of corporate income tax;

"ultimate parent undertaking" means an undertaking which draws up the

consolidated financial statements of the largest body of undertakings.

2. For the purposes of article 213B "revenue" shall have the same meaning as

"net turnover" for undertakings governed by the law of a Member State or

by the law of a state which is a member of the European Economic Area that do

not apply international accounting standards adopted on the basis of Regulation

(EC) No. 1606/2002 of the European Parliament and of the Council of 19 July

2002 on the application of international accounting standards; or

"revenue" as defined by or within the meaning of the financial reporting

framework on the basis of which the financial statements are prepared, for other

undertakings.

Content of the report on income tax information

3. The report on income tax information required under article 213B shall

include information relating to all the activities of the standalone undertaking or ultimate

parent undertaking, including those of all the affiliated undertakings consolidated in the

financial statements in respect of the relevant financial year.

4. The information referred to in paragraph 3 shall consist of

(a)

the name of the ultimate parent undertaking or the standalone

undertaking, the financial year concerned, the currency used for the presentation

of the report, and where applicable, a list of all subsidiary undertakings

consolidated in the financial statements of the ultimate parent undertaking, in

respect of the relevant financial year, established in the Union or in tax

jurisdictions included in Annexes I and II to the Council conclusions on the

revised EU list of non-cooperative jurisdictions for tax purposes;

(b)

a brief description of the nature of their activities;

(c)

the number of employees on a full-time equivalent basis;

(d)

revenues, which are to be calculated as

C OM PA N I E S

(i)

the sum of the net turnover, other operating income, income

from participating interests, excluding dividends received from affiliated

undertakings, income from other investments and loans forming part of the

fixed assets, other interest receivable and similar income as listed in

Annexes V and VI to the Accounting Directive;

(ii)

the income as defined by the financial reporting framework

on the basis of which the financial statements are prepared, excluding

value adjustments and dividends received from affiliated undertakings; or

(iii) for the purposes of this paragraph, the revenues shall include

transactions with related parties;

(e)

the amount of profit or loss before income tax;

(f)

the amount of income tax accrued during the relevant financial year,

which shall be calculated as the current tax expense recognised on taxable profits

or losses of the financial year by undertakings and branches in the relevant tax

jurisdiction. For the purposes of this paragraph, the current tax expense shall

relate only to the activities of an undertaking in the relevant financial year and

shall not include deferred taxes or provisions for uncertain tax liabilities;

(g)

the amount of income tax paid on a cash basis, which shall be

calculated as the amount of income tax paid during the relevant financial year by

undertakings and branches in the relevant tax jurisdiction. For the purposes of this

paragraph, taxes paid shall include withholding taxes paid by other undertakings

with respect to payments to undertakings and branches within a group; and

(h)

the amount of accumulated earnings at the end of the relevant

financial year. For the purposes of this paragraph, the accumulated earnings shall

mean the sum of the profits from past financial years and the relevant financial

year, the distribution of which has not yet been decided upon. With regard to

branches, accumulated earnings shall be those of the undertaking which opened

the branch.

5. The information listed in paragraph 3 shall be reported on the basis of the

reporting instructions referred to in Section III, Parts B and C, of Annex III to Council

Directive 2011/16/EU of 15 February 2011 on administrative cooperation in the field of

taxation and repealing Directive 77/799/EEC.

6. The information referred to in paragraphs 4 and 5 shall be presented using a

common template and electronic reporting formats which are machine-readable, as may

be adopted by the European Commission from time to time.

7. (1)

The report on income tax information shall present the information

referred to in paragraphs 4 or 5 separately for each Member State and for each state

which is a member of the European Economic Area. Where a Member State comprises

several tax jurisdictions, the information shall be aggregated at Member State level.

Where a state which is a member of the European Economic Area comprises several tax

jurisdictions, the information shall be aggregated at the level of the state which is a

member of the European Economic Area.

(2)

The report on income tax information shall also present the information

referred to in paragraphs 4 or 5 separately for each tax jurisdiction which, on 1 March of

the financial year for which the report is to be drawn up, is listed in Annex I to the

Council conclusions on the revised EU list of non-cooperative jurisdictions for tax

purposes, and shall provide such information separately for each tax jurisdiction which,

on 1 March of the financial year for which the report is to be drawn up and on 1 March of

the preceding financial year, was listed in Annex II to the Council conclusions on the

revised EU list of non-cooperative jurisdictions for tax purposes.

(3)

The report on income tax information shall also present the information

referred to in paragraphs 4 or 5 on an aggregated basis for other tax jurisdictions.

(4)

The information shall be attributed to each relevant tax jurisdiction on the

basis of establishment, the existence of a fixed place of business or of a permanent

business activity which, given the activities of the group or standalone undertaking, may

be subject to income tax in that tax jurisdiction.

(5)

Where the activities of several affiliated undertakings may be subject to

income tax within a single tax jurisdiction, the information attributed to that tax

jurisdiction shall represent the sum of the information relating to such activities of each

affiliated undertaking and their branches in that tax jurisdiction.

(6)

Information on any particular activity shall not be attributed simultaneously to

more than one tax jurisdiction.

8. (1)

One or more specific items of information otherwise required to be

disclosed in accordance with paragraphs 4 or 5 may be temporarily omitted from the

report where their disclosure would be seriously prejudicial to the commercial position

of the undertakings to which the report relates. Any omission shall be clearly indicated in

the report together with a duly reasoned explanation regarding the reasons therefor.

(2)

All information omitted pursuant to the first sub-paragraph shall be made

public in a later report on income tax information, within no more than five (5) years

from the date of its original omission.

(3)

Information pertaining to tax jurisdictions included in Annexes I and II to the

Council conclusions on the revised EU list of non-cooperative jurisdictions for tax

purposes, as referred to in paragraph 5, shall never be omitted.

9. The report on income tax information may include, where applicable at group

level, an overall narrative providing explanations for any material discrepancies between

the amounts disclosed pursuant to paragraphs 4(f) and (g), taking into account, if

appropriate, corresponding amounts concerning the previous financial years.

10. (1)

The currency used in the report on income tax information shall be the

currency in which the consolidated financial statements of the ultimate parent

undertaking or the annual financial statements of the standalone undertaking are

presented. This report need not be published in a currency other than the currency used

in the financial statements.

(2)

Notwithstanding, in the case mentioned in the first proviso of sub-article (5) of

C OM PA N I E S

article 213B, the currency used in the report on income tax information shall be the

currency in which the subsidiary undertaking publishes its annual financial statements.

11. The report on income tax information shall specify whether it was prepared in

accordance with paragraphs 4 or 5.

Publication and accessibility

12. The report on income tax information and the statement mentioned in article

213B shall be published within twelve (12) months of the balance sheet date of the

financial year for which the report is drawn up as provided for by each Member State or

by the law of a state which is a member of the European Economic Area in accordance

with Articles 14 to 28 of Directive (EU) 2017/1132 of the European Parliament and of

the Council of 14 June 2017 relating to certain aspects of company law, and where

relevant, in accordance with Article 36 of the same Directive.

13. The report on income tax information and the statement published by the

undertakings in accordance with paragraph 12 shall be made accessible to the public in at

least one of the official languages of the Union, free of charge, not later than twelve (12)

months after the balance sheet date of the financial year for which the report is drawn up,

on the website of

(a)

the undertaking, where article 213B(1) or (2) apply;

(b)

the subsidiary undertaking or an affiliated undertaking, where

article 213B(5) applies; or

(c)

the branch or the undertaking which opened the branch, or an

affiliated undertaking, where article 213B(6) applies.

14. Undertakings shall deliver the report on income tax information and the

statement published by them in accordance with paragraph 12 to the Registrar for

registration within fourteen (14) days from such publication, which report and statement

are to be made accessible to the public in an electronic reporting format which is

machine-readable, on the website of the register, and free of charge to any third party

located within the Union.

15. The report referred to in the provisions of article 213B(1), (2), (5), (6), (7) and

(8) and, where applicable, the statement referred to in the provisions of article 213B(5)

and (6), shall remain accessible on the relevant website for a minimum of five (5)

consecutive years.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 5 Law governing commercial partnerships. — COMPANIES ACT Open official source

A commercial partnership formed and registered under this

Act or under the Ordinance shall be governed by this Act

irrespective of the place where the management and control of the

commercial partnership is exercised.

Laws of Malta — Chapter 386 — COMPANIES ACT

Fifth Schedule — COMPANIES ACT Open official source

Amended by

IV. 2003.165;

(Article 169)

IX. 2008.42;

XVI. 2011.59.

INDIVIDUAL ACCOUNTS AND DIRECTORS’ REPORT OF AN

INVESTMENT COMPANY WITH VARIABLE SHARE CAPITAL

Without prejudice to any requirements laid down by the competent authority under

the Investment Services Act or the Retirement Pensions Act, the individual accounts

of an investment company with variable share capital shall disclose at least the

information specified in the following provisions of this Schedule.

1. A statement of assets and liabilities showing

-

securities;

-

debt instruments;

-

bank balances;

-

other assets;

-

total assets;

-

liabilities;

-

net asset value;

-

details of accounting and valuation policies.

2. The number of units in circulation.

3. The net asset value per unit or share.

4. The composition of the portfolio, distinguishing at least between

(a) transferable securities admitted to listing on a Maltese regulated market;

(b) transferable securities dealt in on any other regulated market or on any

equivalent market in a non-Member State or non-EEA State;

(c) recently issued transferable securities;

(d) transferable securities not included in the above;

(e) debt instruments not included in the above;

(f)

other investments as applicable.

References in sub-paragraph (c) of this paragraph to recently issued transferable

securities are to securities the terms of issue of which include an undertaking that an

application will be made for admission to listing on a Maltese regulated market or

for admission on any other regulated market or on any equivalent market in a non-

Member State or non-EEA State.

The portfolio shall be analysed on the basis of economic, geographic, currency or

other appropriate criteria, having regard to the investment policy of the company.

Such analysis shall show the value of each category of investment as a percentage of

net assets and as a percentage of total assets of the company.

Any material changes in the composition of the investment portfolio made during

the accounting period shall be stated.

5. A statement or statements of the developments concerning the assets of the

company during the accounting period and including the following

-

income from investments;

-

other income;

-

management charges;

-

depositary’s charges;

C OM PA N I E S

-

other charges and taxes;

-

net income;

-

distributions and income reinvested;

-

changes in capital account;

-

appreciation or depreciation in value of investments;

-

other changes affecting the value of the assets and liabilities of the

company.

6. A comparative table covering the last three accounting periods and

including, for each accounting period, at the end of such period, the total net asset

value of the company and the net asset value per unit or share.

During its first, second and third accounting periods, a company shall show the

above information for all accounting periods since its registration.

7. Details, by category of transaction, of the resulting amount of commitments.

References in this paragraph to commitments are to the commitments resulting

from the use of techniques and instruments for the purposes of efficient portfolio

management, including protection against exchange, interest rates and market risks.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 6 Indication of particulars in business letters, order forms, websites etc. — COMPANIES ACT Open official source

(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.

(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.

(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).

(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).

(5) Every commercial partnership and every body corporate

registered under Part XI of this Act shall mention its name in

legible characters in all its notices and other official publications,

bills of exchange, promissory notes, cheques and orders for money

or goods purporting to be signed on its behalf and in all its bills of

parcels, invoices, receipts and letters of credit.

(6) An officer signing a document on behalf of a commercial

partnership or on behalf of a body corporate registered under Part

XI of this Act shall state the capacity in which he is signing.

(7) Where a commercial partnership is being wound up, every

letter, invoice or other document issued by or on behalf of the

commercial partnership, being a document on or in which the name

of the commercial partnership appears, shall, in addition to the

requirements of the preceding sub-articles of this article, contain a

statement that the commercial partnership is being wound up and,

in respect of a company it shall also contain the names of the

liquidators.

(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.

(9) If default is made in complying with the provisions of sub-

article s ( 1) to (6 ) and of sub-article (8) eve ry officer of the

commercial partnership who is in default shall be liable to a

penalty.

(10) If default is made in complying with the provisions of sub-

article (7) every liquidator or partner, as the case may be, who is in

default shall be liable to a penalty.

PART III - PARTNERSHIP EN NOM COLLECTIF

Laws of Malta — Chapter 386 — COMPANIES ACT

Sixth Schedule — COMPANIES ACT Open official source

Amended by

IV. 2003.166;

(Article 177)

XXXI. 2015.25;

LIV. 2016.5;

XVIII.2025.60.

CONTENTS OF DIRECTORS’ REPORT

1. The directors’ report shall contain -

(a) particulars of any important events affecting the company or any of its

subsidiary undertakings which have occurred since the end of the

accounting period;

(b) an indication of likely future developments in the business of the

company and of its subsidiary undertakings;

(c) an indication of the activities, if any, of the company and of its

subsidiary undertakings in the field of research and development;

(d) the amount, if any, which they recommend should be paid by way of

dividend and the amount, if any, which they propose to carry to

reserves; and

(e) the existence of branches of the company;

(f)

in relation to the undertaking’s use of financial instruments and where

material for the assessment of its assets, liabilities, financial position

and profit or loss

(i)

the undertaking’s financial risk management objectives and

policies, including its policy for hedging each major type of

forecasted transaction for which hedge accounting is used; and

(ii)

the undertaking’s exposure to price risk, credit risk, liquidity risk

and cash flow risk.

2. The directors’ report shall disclose the information specified in paragraph 3

of this Schedule where in an accounting period shares in a company -

(a) are purchased by the company or are acquired by it by forfeiture or

surrender or the company otherwise acquires its own shares; or

(b) are acquired by another person in circumstances where the acquisition is

by company’s nominee, or by another with the company financial

assistance, the company itself having a beneficial interest; or

(c) are made subject to pledge or other privileges, to a hypothec or to any

other charge in favour of the company.

3. The information required to be disclosed in the directors’ report in

accordance with the provisions of paragraph 2 of this Schedule shall consist of the

following

(a) the reasons for such transactions or occurrences;

(b) the number and nominal value of the shares so purchased, the aggregate

amount of the consideration paid by the company for such shares and

the reasons for their purchase or, in the absence of a nominal value, the

accountable par of the shares acquired and disposed of during the

financial year and the proportion of the subscribed capital which they

represent;

(c) in the case of acquisition or disposal for a value, the consideration of

the shares;

(d) the number and nominal value of all the shares acquired and held by the

company and the proportion of the subscribed capital which they

represent;

(e) Deleted by Act XVIII.2025.60.

4. Small undertakings shall be exempted from the obligation to prepare

directors’ reports, provided that they shall provide the information referred to in

paragraph 2 and paragraph 3(a) to (c) of this Schedule concerning the acquisition by

an undertaking of its own shares to be given in the notes to the financial statements.

5. Medium-sized undertakings shall be exempted from the obligation set out in

the third paragraph of sub-article (2) of article 177 insofar as it relates to non-

financial information.

6. Where a consolidated directors’ report is required in terms of article 177, the

following adjustment to the information required by that article and this Schedule

shall apply namely that in reporting details of own shares acquired, the consolidated

directors’ report shall indicate the number and nominal value of all the parent

undertaking’s shares held by that parent undertaking, by subsidiary undertakings of

that parent undertaking or by a person acting in his own name but on behalf of any of

those undertakings. The disclosure of these particulars is required in the notes to the

consolidated financial statements.

7. Where a consolidated directors’ report is required in addition to the directors’

report, the two reports may be presented as a single report.

Additional disclosures of non-financial information applicable to certain large

undertakings and groups

8. Large undertakings, as referred to in paragraph 1 of the Third Schedule,

C OM PA N I E S

which are public-interest entities exceeding on their balance sheet dates the criterion

of the average number of 500 employees during the financial year shall, in addition

to the other requirements of this Schedule, include in the directors’ report a non-

fi n a n c ia l s t a t e m e n t c o n ta i n in g i nf o r m a ti o n t o th e ex te nt ne c e s sa ry fo r a n

understanding of the undertaking’s development, performance, position and impact

of its activity, relating to, as a minimum, environmental, social and employee

matters, respect for human rights, anti-corruption and bribery matters, including

(a) a brief description of the undertaking’s business model;

(b) a description of the policies pursued by the undertaking in relation to

those matters, including due diligence processes implemented;

(c) the outcome of those policies;

(d) the principal risks related to those matters linked to the undertaking’s

operations including, where relevant and proportionate, its business

relationships, products or services which are likely to cause adverse

impacts in those areas, and how the undertaking manages those risks;

(e) non-financial key performance indicators relevant to the particular

business.

Where the undertaking does not pursue policies in relation to one or more of those

matters, the non-financial statement shall provide a clear and reasoned explanation

for not doing so.

The non-financial statement referred to in this paragraph shall also, where

appropriate, include references to, and additional explanations of, amounts reported

in the annual financial statements.

Information relating to impending developments or matters in the course of

negotiation may be omitted in exceptional cases where, in the duly justified opinion

of the directors, the disclosure of such information would be seriously prejudicial to

the commercial position of the undertaking, provided that such omission does not

prevent a fair and balanced understanding of the undertaking’s development,

performance, position and impact of its activity.

In requiring the disclosure of the information referred to in this paragraph,

un d e r ta ki n gs m a y re ly on ex is t i ng na ti o na l, U ni on - b a s e d or in t er n a t i o n a l

frameworks, and if they do so, undertakings shall specify which frameworks they

have relied upon.

9. Undertakings fulfilling the obligation set out in paragraph 8 of this Schedule

shall be deemed to have fulfilled the obligation relating to the analysis of non-

financial information set out in sub-article (2) of article 177.

10. An undertaking which is a subsidiary undertaking shall be exempted from

the obligation set out in paragraph 8 if that undertaking and its subsidiary

undertakings are included in the consolidated directors’ report.

11. Public-interest entities which are parent undertakings of a large group

exceeding on its balance sheet dates, on a consolidated basis, the criterion of the

average number of 500 employees during the financial year shall include in the

consolidated directors’ report a consolidated non-financial statement containing

information to the extent necessary for an understanding of the group's development,

performance, position and impact of its activity, relating to, as a minimum,

environmental, social and employee matters, respect for human rights, anti-

corruption and bribery matters, including

(a) a brief description of the group’s business model;

(b) a description of the policies pursued by the group in relation to those

matters, including due diligence processes implemented;

(c) the outcome of those policies;

(d) the principal risks related to those matters linked to the group’s

operations including, where relevant and proportionate, its business

relationships, products or services which are likely to cause adverse

impacts in those areas, and how the group manages those risks;

(e) non-financial key performance indicators relevant to the particular

business.

Where the group does not pursue policies in relation to one or more of those

matters, the consolidated non-financial statement shall provide a clear and reasoned

explanation for not doing so.

The consolidated non-financial statement referred to in this paragraph shall also,

where appropriate, include references to, and additional explanations of, amounts

reported in the consolidated financial statements.

Information relating to impending developments or matters in the course of

negotiation may be omitted in exceptional cases where, in the duly justified opinion

of the directors, the disclosure of such information would be seriously prejudicial to

the commercial position of the group, provided that such omission does not prevent a

fair and balanced understanding of the group’s development, performance, position

and impact of its activity.

In requiring the disclosure of the information referred to in this paragraph the

parent undertaking may rely on existing national, Union-based or international

frameworks, and if it does so, the parent undertaking shall specify which frameworks

it has relied upon.

12. A parent undertaking fulfilling the obligation set out in paragraph 11 of this

Schedule shall be deemed to have fulfilled the obligation relating to the analysis of

non-financial information set out in sub-articles (2), (5) and (6) of article 177.

13. A parent undertaking which is also a subsidiary undertaking shall be

exempted from the obligation set out in paragraph 11 if that exempted parent

undertaking and its subsidiaries are included in the consolidated directors’ report,

drawn up in accordance with sub-articles (5) and (6) of article 177 and this Schedule.

C OM PA N I E S

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 7 Definition. — COMPANIES ACT Open official source

A partnership en nom collectif (referred to as a

"partnership" in the following provisions of this Part) may be

formed by two or more partners and operates under a partnership

name and has its obligations guaranteed by the unlimited and joint

and several liability of all the partners

Provided that no action shall lie against the individual

partners unless the property of the partnership has first been

discussed

Provided further that where, and for as long as, none of the

partners is either an individual or a body corporate which has its

obligations guaranteed by the unlimited and joint and several

liability of one or more of its members, the provisions of article 7A

shall also apply to that partnership.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 7A — COMPANIES ACT Open official source

(1) The provisions of this article shall apply to a

partnership where, and for as long as, none of the partners is either

an individual or a body corporate which has its obligations

guaranteed by the unlimited and joint and several liability of one or

more of its members.

(2) A partnership which, either on formation or at any time

thereafter, becomes subject to the provisions of this article shall,

within fourteen days, deliver to the Registrar for registration a

notice specifying that it is subject to this article and that it shall

comply with the provisions laid down in this article.

(3) When a partnership ceases to be subject to the provisions of

this article, the partnership shall, within fourteen days of such

cessation , deliv er to th e Regi strar for registrati on a noti ce

specifying that it is no longer subject to this article and that the

provisions of this article shall not apply to such partnership as from

the date that it has ceased to be so subject.

(4) Notwithstanding any other penalties imposed by this Act,

any partner who fails to comply with the provisions of sub-articles

(2) and (3) shall be liable to a penalty, and, for every day during

which the default continued, to a further penalty.

(5) The provisions of Chapters IX and X of Part V of this Act,

other than the provisions of article 184, shall mutatis mutandis

apply to a partnership subject to this article for as long as such

partnership continues to be so subject.

(6) Where a partnership subject to the provisions of this article

is dissolved, a liquidator shall be appointed and the provisions of

articles 305 and 306 shall mutatis mutandis apply. The provisions

of article 37(1) and article 48 shall not apply.

(7)

(a) As soon as the affairs of the partnership are fully

wound up, the liquidator shall make an account of the

winding up, showing how the winding up has been

conducted and how the property of the partnership has

been disposed of, and shall draw up a scheme of

distribution and he shall cause the account to be

audited by one or more auditors appointed by a

decision of the partners. The liquidator shall serve on

each of the partners a copy of the accounts and of the

scheme of distribution, if any, together with the

auditors’ report and any explanation thereof.

(b) The accounts and the scheme of distribution shall be

deemed to have been approved by all the partners if no

objection thereto is lodged by application by any of the

partners within three months of the service referred to

in paragraph (a).

(c) The provisions of article 153 shall apply to an auditor

appointed in terms of paragraph (a). Such auditor shall

not be a person who has held the office of auditor of

the partnership at any time during the last three years

immediately preceding the date of dissolution.

(8)

The Minister may make regulations for the better carrying

out of any of the provisions of this article; and without prejudice to

the generality of the foregoing may, by such regulations, in

particular exempt or provide for the exemption of such partnership

from any of the provisions of this Act or of any other law in force,

subject to such modifications, variations and conditions that may

be specified thereunder.

Laws of Malta — Chapter 386 — COMPANIES ACT

Seventh Schedule — COMPANIES ACT Open official source

Substituted by

IV. 2003.167;

(Article 184)

L.N. 425 of 2007.

Company No: ........................

CONTENTS AND FORM OF ANNUAL RETURN

ANNUAL RETURN of .........................................................................................

........................................................................................ (name of the company)

Date to which this return is made up: ......................................

(being the anniversary of the company’s date of registration)

1. Address

(Address of the registered office of the company)

This form must be completed in BOLD TYPE FORM

2. Summary of Share Capital

All euro amounts are to be preceded by the symbol €. Symbols used for other

currencies are to be indicated (where applicable).

Currency

Symbol

(a)

Nominal Share Capital

Nominal Share Capital ............................................................ divided into

(Insert number and class)

shares of

................................. each

shares of

................................. each

shares of

................................. each

shares of

................................. each

(b)

Issued Share Capital

Number

Class

Number of shares of each class

...................... shares

taken up to the date of this return

...................... shares

(which number must agree with the

...................... shares

total shown on the list as held by

...................... shares

existing members).

...................... shares

C OM PA N I E S

N u m b e r o f sh a r e s o f e a c h c l a s s

issued as paid up to the extent of ..............

issued as partly paid up and extent

per share .................... ................... shares

to which each such share is so paid

issued as paid up to the extent of ..............

up.

per share .................... ................... shares

issued as paid up to the extent of ..............

per share .................... ................... shares

issued as paid up to the extent of ..............

per share .................... ................... shares

Total number of shares of each

Number

Class

class forfeited.

.................................. shares

.................................. shares

.................................. shares

.................................. shares

Total amount paid, if any, on

shares forfeited. ........... .............. .........................................

3. List of Past and Present Members

List of persons holding shares or stock in the company on the date to which this

return is made up, and of persons who have held shares or stock therein at any time

since the date of the last return, or in the case of the first return, of the registration

of the company.

Folio in

Names

register ledger

Addresses (in the

containing

Account of Shares

Remarks

case of a body

particulars

corporate, its

registered office)

Number of

Particulars of shares

shares held

transferred or transmitted

by existing

causa mortis si nc e the

members at

date of the last return, or,

the date of

i n th e c a s e o f t h e f i rs t

return*§

return, of the registration

o f t h e c o m p a n y b y (a )

persons who are still

members and (b) persons

who have c eased to be

members**

Number

Date of

§

registration

or transfer

(a)

(b)

3. List of Past and Present Members (cont. sheet)

C OM PA N I E S

The aggregate number of shares held by each member shall be stated, and the aggregates

shall be added up so as to agree with the number of the shares stated in the Summary of

Share Capital and Debentures to have been taken up.

§ When the shares are divided into different classes these columns should be sub-divided

so that the number of each class held, transferred or transmitted causa mortis, may be

shown separately. Where any shares have been converted into stock the amount of stock

held by each member shall be shown.

** The date of registration of each transfer or transmission causa mortis shall be given as

well as the number of shares transferred or transmitted causa mortis on each date. The

particulars shall be placed opposite the name of the transferor and not opposite that of

the transferee, but the name of the transferee may be inserted in the "Remarks" column

immediately opposite the particulars of each transfer. (The word "transferor" shall mean

the deceased and the word "transferee" shall mean the heir or legatee, in the case of

transmission causa mortis).

4. Particulars of Directors

Particulars of the persons who are directors of the company at the date of this return.

Name

Nationality

Usual residential address

(in the case of a body

(in the case of an individual,

corporate, the registered

name or names and surname.

office)

In the case of a body corpo-

rate, the corporate name)

5. Particulars of Company Secretary

Particulars of the person who is company secretary of the company at the date of this

return.

Name

Nationality

Usual residential address

(in the case of a body

(in the case of an individual,

corporate, the registered or

name or names and surname.

principal office)

In the case of a body

corporate, the corporate

name)

Signed ...................................

Director / Company Secretary

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 8 Agreement to pay share of profits. — COMPANIES ACT Open official source

An agreement to pay a share of the profits of a partnership

to a person in total or partial remuneration for his services shall

not, of itself, make him a partner.

Laws of Malta — Chapter 386 — COMPANIES ACT

Eighth Schedule — COMPANIES ACT Open official source

Amended by

XV. 2007.15;

(Article 186)

IX. 2008.43.

CONVERSION RULES APPLICABLE ON A CHANGE IN THE CURRENCY

IN WHICH THE SHARE CAPITAL OF A COMPANY IS EXPRESSED AND

THE CORRESPONDING PRESENTATION CURRENCY

Interpretation

1. In this Schedule, unless the context otherwise requires -

"Presentation currency" shall mean the currency used in presenting the

annual accounts in accordance with the provisions of article 187. On a change in

the presentation currency consequent to a change in the currency in which the

share capital of a company is expressed which is effected in accordance with the

provisions of article 186, the term "original presentation currency" shall refer to

the presentation currency in operation before the change; and the term "new

presentation currency" shall refer to the presentation currency applicable

following the change, and in the case of the change taking place in the first

accounting period, to the presentation currency which would have been used had

such change not taken place.

"Exchange rate" means the ratio at which the currencies of two countries are

exchanged at a particular point in time.

"Spot rate" means the middle exchange rate on a particular day for the

C OM PA N I E S

exchange of currencies on that day.

"Closing rate" means the spot rate that exists at the balance sheet date which

immediately precedes the accounting period to which the change in presentation

currency applies.

General rule

2. (1) The company’s share capital, its share premium account when

applicable, and its reserves shall be converted from the original presentation

currency to the new presentation currency in accordance with the rules set out in

paragraphs 3 and 4 of this Schedule.

(2) All other items in the company’s annual accounts, including comparative

figures where applicable, shall be presented in the new presentation currency in

accordance with generally accepted accounting principles and practice.

Conversion rules for share capital and share premium

3. (1) The called-up share capital and the balance on the share premium

account shall be converted at the exchange rate or rates applicable on the respective

date or dates when the shares in question were issued by the company.

(2) The amount which is still uncalled on any shares issued by the company

shall be converted at the exchange rate or rates applicable on the respective date or

dates when the shares in question were issued by the company.

(3) The nominal value per share in the new presentation currency shall be

calculated by taking the aggregate of the called-up share capital converted as set out

in sub-paragraph (1) of this paragraph and the uncalled amount, if any, on any shares

issued by the company converted in accordance with sub-paragraph (2) of this

paragraph, and dividing this aggregate amount (the issued share capital) by the

number of shares in issue

Provided that where there exists -

(a) preference shares or different classes of preference shares; or

(b) different classes of ordinary shares and where the nominal value per

share varies between one class and the other,

the conversion of the nominal value per share to the new presentation currency shall

be carried out separately for the ordinary shares and the preference shares, or for

each class of ordinary and preference shares in so far as the nominal value per share

varies between one class and the other, as the case may be.

(4) The authorised share capital of the company shall be converted by taking the

aggregate of -

(a) the aggregate amount referred to in sub-paragraph (3) of this paragraph

(the converted issued share capital); and

(b) the amount of the authorised share capital, which has not yet been

issued, converted from the original share capital at the closing rate.

Conversion rules for reserves

4. (1) Reserves created out of profits, including retained profits, and

accumulated losses shall be converted at the average annual exchange rate or rates

pertaining to the accounting period or periods during which the profits and losses

from which such reserves or accumulated losses originated were earned or incurred.

(2) Reserves which were not created out of profits shall be converted at the

exchange rate or rates applicable on the date or dates when such reserves were

created.

Presentation currency conversion difference

5. Where following conversion to the new presentation currency a presentation

currency conversion difference arises, this is not to be recognised in the company’s

profit and loss account but is to be recognised as a separate component of equity, and

is to be considered as an unrealised gain or as a realised loss as applicable.

Disclosure

6. In the first annual accounts following the conversion, the notes shall include

full details of the method of conversion and the exchange rates used for the

company’s share capital, its share premium account when applicable, and its

reserves.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 9 Partnership name. — COMPANIES ACT Open official source

(1) Subject to the provisions of sub-articles (2) and (3), a

partnership may be designated by any name.

(2)

A partnership shall not be registered by a name which -

(a) is the same as the name of another commercial

partnership or so nearly similar as in the opinion of the

Registrar it could create confusion; or

(b) is in the opinion of the Registrar offensive or

otherwise undesirable; or

(c) has been reserved for registration for another

commercial partnership by notice in writing to the

Registrar given not more than three months before the

date of the second request

Provided that the Registrar shall notify any refusal under

th i s su b - a r t i c l e w i th o u t d e l a y to t h e p e r s o n r e q u e s t i n g t h e

registration.

(3) For the purposes of sub-article (2)(b), the Registrar shall

have regard to the names of the partners, the business or proposed

business of the partnership and to the protection of the names of

individuals who are not connected in any way with the partnership.

Laws of Malta — Chapter 386 — COMPANIES ACT

Ninth Schedule — COMPANIES ACT Open official source

Amended by

IV. 2003.168.

(Article 2)

EXPLANATION OF EXPRESSIONS USED IN SUB-ARTICLE (2) OF

ARTICLE 2 OF THIS ACT AND PROVISIONS SUPPLEMENTARY

THERETO

Voting rights in an undertaking

1. (a) References to voting rights in an undertaking are to the rights conferred

o n s h a r e h o l d e r s i n r e s p e c t o f th e i r sh a r e s o r, i n t h e c a s e of a n

undertaking not having a share capital, on members, to vote at general

meetings of the undertaking on all, or substantially all, matters.

(b) References to directors shall be taken to include references to persons

entrusted with the administration of undertakings not having directors

and references to the board of directors shall be taken to include the

equivalent body in such undertakings.

2. In relation to an undertaking which does not have general meetings at which

matters are decided by the exercise of voting rights, the references to holding a

majority of the voting rights in the undertaking shall be construed as references to

having the right under the constitution of the undertaking to direct overall policy of

the undertaking or to alter the terms of its constitution.

Rights to appoint or remove a majority of the directors

3. Reference to the right to appoint or remove a majority of the board of

directors is to the right to appoint or remove directors holding a majority of the

C OM PA N I E S

voting rights at meetings of the board on all, or substantially all, matters.

4. An undertaking shall be treated as having the right to appoint to a

directorship if -

(a) a person’s appointment to it follows necessarily from his appointment as

director of the undertaking; or

(b) the directorship is held by the undertaking itself.

5. The right to appoint or remove which is exercisable only with the consent or

concurrence of another person shall not be taken into account unless no other person

has a right to appoint or, as the case may be, to remove in relation to that

directorship.

Right to exercise dominant influence

6. An undertaking shall not be regarded as having the right to exercise a

dominant influence over another undertaking unless it has a right to give directions

with respect to the operating and financial policies of that other undertaking which

its directors are obliged to comply with, whether or not those directions are for the

benefit of that other undertaking.

Rights exercisable only in certain circumstances

7. Rights which are exercisable only in certain circumstances shall be taken

into account only -

(a) when the circumstances have arisen, and for so long as they continue to

exist; or

(b) when the circumstances are within the control of the person having the

rights.

8. Rights which are normally exercisable but which are temporarily incapable of

exercise shall continue to be taken into account.

Rights held by one person on behalf of another

9. Rights held by a person in a fiduciary capacity shall be treated as not held by

him.

10. Rights held by a person as nominee for another shall be treated as held by

the other.

11. Rights shall be regarded as held by a person as nominee for another if they

are exercisable on that other’s instructions or with his consent or concurrence.

Rights attributed to parent undertaking

12. Rights shall be treated as held by a parent undertaking if they are held by

any of its subsidiary undertakings.

Disregard of certain rights

13. The voting rights in an undertaking shall be reduced by any rights held by

the undertaking itself.

14. The voting rights in an undertaking shall be reduced by any rights attaching

to shares -

(a) held by way of security, provided that the rights in question are

exercised in accordance with the instructions received; or

(b) held in connection with the granting of loans as part of normal business

activities, provided that the voting rights are exercised in the interests of

the person providing the security.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 10 Penalties. — COMPANIES ACT Open official source

Any person who knowingly makes use of a name falsely

implying the existence of a partnership shall be liable to a penalty.

Laws of Malta — Chapter 386 — COMPANIES ACT

Tenth Schedule — COMPANIES ACT Open official source

Added by

IV. 2003.171.

(Article 66A)

Amended by

XIII. 2004.107;

Partnerships en commandite or Limited

XII. 2006.74;

Partnerships

L.N. 425 of 2007;

IX. 2008.44;

L.N. 561 of 2010.

Substituted by

L.N. 478 of 2014.

Amended by

I.2026.31.

PART I - REGULATIONS FOR PARTNERSHIPS EN COMMANDITE

OR LIMITED PARTNERSHIPS

Interpretation.

1. (1) In this Schedule, unless the context otherwise requires, the following

expressions have the meaning hereby assigned to them -

"the Act" means the Companies Act;

"base currency" means the currency in which a class of shares of a Share Capital

Limited Partnership is denominated;

"competent authority" means the competent authority within the meaning of and

appointed for the purposes of the Investment Services Act;

"currency" means, in addition to the euro, any convertible currency in terms of

article 186 of this Act;

"fractional share" means a fraction of a whole share in any class of shares issued

by a Share Capital Limited Partnership;

"insolvent" and cognate expressions, in respect of the Limited Partnership, shall

be construed in accordance with paragraph 25(6);

"Limited Partnership" means a partnership en commandite or limited partnership

falling within the scope of application of this Schedule as per paragraph 2 below

and, unless otherwise expressly stated or the context otherwise requires, it includes

both a Share Capital Limited Partnership and a Non-Share Capital Limited

Partnership;

"Multi-Class Limited Partnership" means a Share Capital Limited Partnership

within the terms of paragraph 36;

"Multi-Fund Limited Partnership" means a Limited Partnership within the terms

of paragraph 37;

"Non-Share Capital Limited Partnership" means a Limited Partnership the capital

of which is not divided into shares;

"Partnership Deed" means the agreement/s in writing of the partners as to the

affairs of the Limited Partnership and the conduct of its business, as the same may be

amended from time to time as provided in paragraph 10;

C OM PA N I E S

"Partnership Registration Document" means the document delivered to the

Registrar for registration as referred to in paragraph 7(3);

"partnership interest" or "interest of a partner in the Limited Partnership" and

cognate expressions, means the totality of the rights, duties and obligations of a

partner in a Limited Partnership, including a partner’s capital contribution, the right

to share in the profits and losses of the Limited Partnership and the right to receive

distributions of assets of the Limited Partnership;

"Share Capital Limited Partnership" means a Limited Partnership the capital of

which is divided into shares;

"solvent" and cognate expressions, in respect of the Limited Partnership, shall be

construed in accordance with paragraph 25(6);

"sub-fund" means the distinct class or classes of shares constituting that sub-fund

in a Multi-Fund Limited Partnership to which are allocated assets and liabilities

distinct from other assets and liabilities allocated to other sub-funds in the same

Multi-Fund Limited Partnership;

"Variable Capital Limited Partnership" means a Share Capital Limited Partnership

with variable share capital within the meaning of paragraph 35.

(2) Unless otherwise defined herein or the context otherwise requires, words

and expressions used in this Schedule shall have the same meaning as is assigned to

them in article 2(1) of the Act.

(3) Furthermore, the provisions of article 2(2) of the Act, with the exception of

paragraph (d) thereof, and the provisions of article 2(3) and article 3 of the Act shall,

to the extent they are stated to be applicable to a partnership en commandite or

limited partnership or to commercial partnerships in general, apply to a Limited

Partnership within the meaning of this Schedule.

Scope of application.

2. (1) The provisions of this Schedule shall apply only to partnerships en

commandite or limited partnerships within the meaning of article 66A(1) of this Act,

and in particular it shall apply to -

(a) a partnership en commandite or limited partnership the capital of which

may or may not be divided into shares, which in the Partnership Deed

expressly limits its object to the collective investment of its funds in

securities and in other movable and immovable property, or in any of

them, with the aim of giving the partners the benefit of the results of the

management of its funds, and to matters ancillary or incidental thereto,

and which qualifies as a collective investment scheme and is duly

licensed, recognised, exempted or otherwise regulated in terms of the

Investment Services Act

Provided that the term "unit" as defined in article 2(1) of the Investment

Services Act shall, for the purposes of this Schedule, be interpreted

broadly to encompass all forms of partnership interest, and shall not be

limited to interests in partnerships en commandite or limited

partnerships that are structured as unitised funds;

(b) a partnership en commandite or limited partnership, the capital of which

may or may not be divided into shares, which in the Partnership Deed

expressly limits its objects to any other purpose as may be prescribed in

this Schedule or as the Minister may from time to time prescribe by

regulations.

(2) Notwithstanding what is provided in sub-paragraph (1) above, one or more

particular provisions of this Schedule may be expressly stated by this Schedule or by

regulations made by the Minister not to apply to one or more categories of Limited

Partnerships set out in sub-paragraph (1)(a) or (b) above, and in such case the said

provisions shall not apply to such category or categories of Limited Partnerships.

Application of Part II of the Act.

3. (1) The provisions of Part II of the Act shall, to the extent applicable to a

partnership en commandite or limited partnership, also apply to a Limited

Partnership under this Schedule, save as otherwise provided below -

(a) the provisions of article 4(2) thereof shall be read and construed and

shall apply as if the reference therein to "one or more acts of trade"

were, in respect of such Limited Partnership, a reference to "the objects

specified in the deed of partnership in terms of and as permitted by

article 66A, the Tenth Schedule and, or regulations issued by the

Minister from time to time"; and

(b) the provisions of article 6(4) shall not apply to such Limited

Partnership.

Formation of Limited Partnership.

4. (1) A Limited Partnership may be formed by two or more partners, at least

one of which shall be a general partner and at least one of which shall be a limited

partner, shall have a separate legal personality, shall operate under a partnership

name, shall have a capital which may or may not be divided into shares, and shall

additionally be constituted and be registered as provided in this Schedule.

(2) A Limited Partnership shall have a legal personality separate and distinct

from that of its partners, and shall accordingly be the subject of rights and

obligations, be capable of owning and holding property under any title at law and of

suing and being sued, in its own name, and such legal personality shall continue until

such time as the name of the Limited Partnership shall be struck off the register,

whereupon the Limited Partnership shall cease to exist.

Constitution of Limited Partnership.

5. (1)

A Limited Partnership shall consist of

(a) one or more general partners who -

(i) are admitted to the Limited Partnership as general partners in

accordance with the Partnership Deed;

(ii) shall be jointly and severally liable for all debts of the Limited

Partnership without limitation, provided that no action shall lie

against any of the general partners unless the property of the

partnership has first been discussed; and

(iii) each of whom shall satisfy such eligibility and other criteria and

requirements as are applicable to it, if any, in terms of the

Investment Services Act and Investment Services Rules issued by

the competent authority under and within the meaning of the said

Act and, or in terms of the Partnership Deed; and

(b) one or more limited partners who -

(i) are admitted to the Limited Partnership as limited partners in

accordance with the Partnership Deed;

C OM PA N I E S

(ii) upon entering the Limited Partnership, contribute, or agree to

contribute to the capital thereof a specified sum;

(iii) subject to paragraphs 6(5), 15(2), 16(1) and 25(2), shall not be

liable for any debts of the Limited Partnership beyond the amount

so contributed or agreed to be contributed and not yet paid; and

(iv) satisfy such eligibility and other criteria and requirements as are

respectively applicable to them, if any, in terms of the Investment

Services Act and Investment Services Rules issued by the

competent authority under and within the meaning of the said Act

and, or in terms of the Partnership Deed.

(2) Any person (including, without limitation, a limited liability company) may

be a partner (whether general or limited) in a Limited Partnership.

(3) The contribution of a limited partner may be satisfied by the provision of

cash or other property capable of economic assessment but may not consist of future

services or undertakings to perform work or supply services; and where property

other than cash is so provided, the value of the property shall be deemed to be its fair

market value at the time of its transfer to the Limited Partnership.

(4) An agreement to pay a share of the profits of a Limited Partnership to a

person in total or partial remuneration for his services shall not, of itself, make him a

partner.

Partnership name.

6. (1) Subject to the provisions of sub-paragraphs (3) and (4), a Limited

Partnership may be designated by any name, but such name shall end with the words

"Limited Partnership" or its abbreviation "LP" or "L.P.".

(2) No person carrying on any business in Malta, other than a Limited

Partnership registered under this Schedule or a partner therein, shall in any way or

manner describe itself or himself or so hold itself or himself out or reasonably be

understood to indicate, or use any name which indicates or may reasonably be

understood to indicate that it or he is, or is carrying on business as, a Limited

Partnership registered under this Schedule or, as the case may be, a partner therein.

Without prejudice to the aforesaid, an undertaking which is validly registered under

the laws of a country other than Malta with a name which includes "Limited

Partnership" or its abbreviation "LP" or “L.P.”, or a partner therein, who lawfully

carries on business in Malta, shall not be deemed to be in breach of this sub-

paragraph (2) simply by reason of the fact that it uses and carries on such business

under the name by which such undertaking is so validly registered in its country of

registration or, as the case may be, describes himself as a partner in such undertaking

with such name.

(3)

A Limited Partnership shall not be registered by a name which -

(a) is the same as the name of another commercial partnership or so nearly

similar as in the opinion of the Registrar it could create confusion; or

(b) is in the opinion of the Registrar offensive or otherwise undesirable; or

(c) has been reserved for registration for another commercial partnership by

notice in writing to the Registrar given not more than three months

before the date of the second request

Provided that the Registrar shall notify any refusal under this sub-paragraph

without delay to the person requesting the registration.

Provided further that in applying sub-paragraph (3)(b), the Registrar shall

have regard to the business or proposed business of the Limited Partnership and to

the protection of the names of individuals who are not connected in any way with the

Limited Partnership.

(4) The name of a limited partner or a distinctive part thereof may not form part

of the name of the Limited Partnership.

(5) A limited partner who knowingly allows his name or a distinctive part

thereof to be used in the name of a Limited Partnership shall be liable as a general

partner to any person who extends credit to the Limited Partnership without

knowledge that the limited partner is not a general partner.

(6) A person who contravenes the provisions of sub-paragraph (2) shall be liable

to a penalty.

(7) Any person who makes use of a name falsely implying the existence of a

Limited Partnership shall be liable to a penalty.

Partnership Deed and Partnership Registration Document.

7. (1) A Limited Partnership shall not be validly constituted unless a

Partnership Deed is entered into and signed as provided in this Schedule and unless a

Partnership Registration Document is duly delivered to the Registrar and a

certificate of registration is issued by the Registrar under this Schedule in respect

thereof.

(2) The Partnership Deed shall be in writing and shall be signed by at least the

first general partner and the first limited partner.

(3) A Partnership Registration Document signed by the first general partner or (if

more than one) by the first general partners shall be delivered to the Registrar for

registration, which shall state the following matters, as provided in the Partnership

Deed, and for the avoidance of doubt the matters indicated in sub-paragraph (3)(a) to

(g) below shall also be expressly stated in the Partnership Deed

(a) the name and residence of the general partner or (if more than one) of

each of the general partners;

(b) the name of the Limited Partnership;

(c) the registered office in Malta of the Limited Partnership;

(d) the objects of the Limited Partnership;

(e) whether the capital of the Limited Partnership is or is not divided into

shares, and

(i)

in the case of a Share Capital Limited Partnership with fixed share

capital, a statement of the fact that the Limited Partnership has a

fixed share capital, the nominal (authorized) share capital of the

Limited Partnership, and where applicable an indication that the

capital is or is capable of being divided into different classes of

shares;

(ii) in the case of a Variable Capital Limited Partnership, a statement

of the fact that the Limited Partnership has a variable share

capital, and where applicable an indication that the capital is or is

capable of being divided into different classes of shares, and the

matters indicated in paragraph 35(2) and, or where applicable

paragraph 38(4);

C OM PA N I E S

(iii) in the case of a Multi-Class Limited Partnership, a statement that

the different classes of shares into which the capital is or is

capable of being divided shall not constitute distinct sub-funds of

the Limited Partnership; and

(iv) in the case of a Multi-Fund Limited Partnership, a statement that

the different classes or groups of classes of shares into which the

capital is or is capable of being divided shall constitute distinct

sub-funds of the Limited Partnership as may be provided for in

the Partnership Deed, without prejudice to the proviso to

paragraph 37(1);

(f)

where applicable, in the case of a Multi-Fund Limited Partnership, the

election referred to in paragraph 38(1);

(g) the period, if any, fixed for the duration of the Limited Partnership, and

where no such period is fixed, a statement to that effect; and

(h) a declaration that the Partnership Deed has been entered into and signed

as provided in this Schedule.

The Partnership Deed may (optionally) also provide for any of the following

matters, in which case such matters shall also be stated in the Partnership

Registration Document to be delivered to the Registrar for registration

(i)

it may specify whether the administration and representation of the

Limited Partnership is to be exercised by the general partners jointly or

severally, and unless so specified, such administration and

representation shall be exercised severally as provided in paragraph

11(1); and, or

(ii) it may expressly provide for the extension of the period, if any, fixed for

the duration of the Limited Partnership.

(4) Upon receipt of the Partnership Registration Document, the Registrar, upon

being satisfied that it complies with the requirements of this Schedule, shall register

it.

(5) To the extent so provided in the Partnership Deed, the Partnership Deed

shall be binding upon the partners and their assigns and upon subsequent partners in

the same manner as if those persons had themselves executed the same.

Duty of Registrar and effects of registration.

8. (1) On the registration of the Partnership Registration Document and the

payment of the fees prescribed under article 66A(3)(d) of this Act, the Registrar

shall certify under his hand that the Limited Partnership is registered and the Limited

Partnership shall come into existence and shall be authorised to commence business

under its name as from the date of the certificate.

(2) A certificate of registration given in respect of a Limited Partnership is

conclusive evidence that the requirements of this Schedule in respect of registration

have been complied with and that the Limited Partnership has come into existence

and is duly registered under this Act.

(3) The registration of a Limited Partnership by the Registrar under this

paragraph 8 shall be without prejudice to any other licence or other authorisation as

may be required in respect of the activities to be carried on by the Limited

Partnership under any other law.

Where certificate of registration is not issued.

9. (1) All persons carrying on business under a name falsely implying the

existence of a Limited Partnership or carrying on business or entering into

agreements in the name of or on behalf of a Limited Partnership in respect of which

a certificate of registration has not been issued under this Schedule, shall, unless

otherwise agreed, be personally and jointly and severally liable for their dealings

with third parties so entered into by them.

(2) Failing agreement to the contrary, the persons referred to in sub-paragraph

(1) shall have, as against one another and in respect of the assets and liabilities

arising out of the business carried on as provided in the said sub-paragraph (1), the

rights and obligations of joint owners.

Changes in Partnership Deed and notification of changes.

10. (1) Unless otherwise provided in the Partnership Deed, any alteration or

addition to the Partnership Deed may only be made with the unanimous consent of

the partners, provided that, unless otherwise provided in the Partnership Deed, an

alteration consisting in a change of the registered office in Malta of the Limited

Partnership, shall require only the consent of the general partners vested with the

administration or representation of the Limited Partnership.

(2) The Limited Partnership shall deliver to the Registrar for registration a

return of any change in any of the matters contained in the Partnership Registration

Document set out in paragraph 7(3) within fourteen days from the happening thereof,

specifying the date of the change and details of the change.

(3) Where the change in the Partnership Deed consists of the replacement of a

general partner by a new general partner or the appointment of any additional

general partner, the return to be delivered to the Registrar under sub-paragraph (2)

shall specify the name and residence of the new general partner.

(4) Any alteration or addition to the Partnership Deed in respect of any of the

matters set out in paragraph 7(3) shall not take effect with respect to third parties,

unless and until it is registered as provided in sub-paragraph (2).

(5) Where the extension of the period, if any, fixed for the duration of a Limited

Partnership is expressly provided for in the Partnership Deed and stated in the

Partnership Registration Document, the Limited Partnership shall, notwithstanding

that provision in the Partnership Deed, deliver a notice of extension of the period of

duration to the Registrar for registration, and any such extension, whether expressly

provided for in the Partnership Deed or otherwise, shall not take effect unless and

until the said notice is delivered to the Registrar and is registered by him, and unless

such delivery takes place at least fifteen days before the date so fixed.

(6) If default is made in complying with the provisions of sub-paragraph (2) or

sub-paragraph (5), every general partner who is in default shall be liable to a penalty,

and, for every day during which the default continues, to a further penalty.

(7) Where a Limited Partnership changes its name under the provisions of sub-

paragraph (2), the Registrar shall enter the new name on the register in place of the

former name and shall issue a certificate of registration altered to meet the

circumstances of the case

Provided that the provisions of paragraph 6 shall apply to the registration of

such new name.

Administration and representation.

11. (1) The administration and representation of a Limited Partnership shall

C OM PA N I E S

vest in the general partners, and unless the Partnership Deed and the Partnership

Registration Document otherwise provide, such administration and representation

shall vest in each of the general partners severally

Provided that, without prejudice to sub-paragraphs (3) to (6) of paragraph 12,

the Partnership Deed may contain provisions relating to the manner in which the

representation of the Limited Partnership is to be exercised by the general partners,

including restrictions on the powers of representation of any general partner, and the

Partnership Deed may also provide that the limited partners shall have the right to

participate in decisions relating to the vesting or removal of powers of

administration and representation of the Limited Partnership in or from the general

partners

Provided further that, without prejudice to the joint or several powers of

administration and representation of the general partners as provided above in sub-

paragraph (1), the said general partners vested with the administration and

representation of the Limited Partnership may by power of attorney authorise any

one of the general partners or any other person, including a limited partner, to

represent the Limited Partnership in any particular case or cases and, or for any

particular purpose or purposes.

(2) Legal proceedings by or against a Limited Partnership (including

proceedings to enforce a foreign judgment or arbitral award by or against the

Limited Partnership) may only be instituted by or against, and generally the judicial

representation of the Limited Partnership shall vest in, the general partners vested

with the administration and representation of the Limited Partnership; and, subject to

the provisions of sub-paragraphs (3) and (4), no limited partner shall be a party to or

named in such proceedings or exercise such judicial representation; in all cases

without prejudice to the provisos to sub-paragraph (1).

(3) The provisions of sub-paragraph (2) are without prejudice to the right of any

person to join or otherwise institute proceedings against a limited partner -

(a) who is liable for any debt of the Limited Partnership pursuant to

paragraphs 6(5), 15(2) or 16(1); or

(b) to obtain payment of his contribution or repayment of any amount

pursuant to paragraph 25(2).

(4) A limited partner may, with leave of the court applied by means of an

application, institute proceedings on behalf of a Limited Partnership if -

(a) the general partners have, without good cause, failed or refused to do

so; and

(b) the failure or refusal is oppressive to the limited partner or is prejudicial

to his interests as a limited partner.

How Limited Partnership may be bound.

12. (1) A Limited Partnership may not be bound in favour of third parties

except by a partner acting under the name of the Limited Partnership and having the

representation of the Limited Partnership either by virtue of the Partnership Deed

and as stated in the Partnership Registration Document or by operation of law,

including by virtue of a power of attorney as referred to in the second proviso to sub-

paragraph (1) of paragraph 11.

(2)

Where any such partner has acted as aforesaid, the Limited Partnership shall

be bound even though it derives no benefit.

(3) Notwithstanding anything contained in the Partnership Deed relating to the

manner in which the representation of the Limited Partnership is to be exercised,

anything done by the partners vested with the administration and representation of a

Limited Partnership which exceeds the limits of their authority or by any partner

vested with such administration and representation which is beyond his powers, shall

be binding on the Limited Partnership unless that act exceeds the powers granted to

the partners vested with the administration and representation or to such partner so

vested, as the case may be, by virtue of this Schedule.

(4) Any limitation on the powers of the partners vested with the administration

and representation of a Limited Partnership or of any such partner shall not be relied

on as against third parties independently of whether that limitation, published or not,

arises from the Partnership Deed or from a decision of the partners.

(5) Where an act of the Limited Partnership falls outside the Limited

Partnership’s objects, the Limited Partnership shall not be bound if it proves that,

when the act was done, the third party knew that it was outside the Limited

Partnership’s objects or the third party could not in view of the circumstances have

been unaware thereof

Provided that the publication of the Partnership Registration Document and

of any subsequent changes to the matters stated therein shall not in itself be

sufficient to prove that the third party knew, or could not have been unaware, that the

act was outside the Limited Partnership’s objects.

(6) Notwithstanding the provisions of this Schedule or of the Partnership Deed

relating to the formalities of the appointment of a partner vested with the

administration and representation of a Limited Partnership and to his qualification,

any irregularity concerning the appointment of such a partner raised after the

completion of the publication of his appointment shall not be relied upon by the

Limited Partnership as against third parties unless the Limited Partnership proves

that such parties were aware of the irregularity at the relevant time. Third parties

who were not aware of such irregularities at the relevant time may rely on that

irregularity as against the Limited Partnership.

Acts required to be done by the Limited Partnership.

13. Any return, notice or other communication to the Registrar required to be

delivered or made by a Limited Partnership under any provision of this Schedule

shall be deemed to be required to be done by the partners vested with the

administration and representation of the Limited Partnership, and where and for so

long as there are no general partners in the Limited Partnership capable or willing to

act within the prescribed time for delivery or making of such return, notice or other

communication, the same may also be delivered or made by any limited partner.

General Partners.

14. (1) Unless otherwise provided in the Partnership Deed, a general partner of

a Limited Partnership (hereinafter in this paragraph 14 referred to as the "Relevant

Limited Partnership") shall not, without the express consent of the other partners or

as otherwise expressly provided in the Partnership Deed

(a) carry on business on his own account or on account of others in

competition with the Relevant Limited Partnership;

(b) be a partner with unlimited liability in another commercial partnership

or a director in a company which is in competition with the Relevant

C OM PA N I E S

Limited Partnership;

(c) deal in any manner with any property of the Relevant Limited

Partnership or with rights of the Relevant Limited Partnership in any

such property, for any purpose other than a purpose of the Relevant

Limited Partnership; or

(d) admit a person as a partner in the Relevant Limited Partnership

otherwise than in accordance with the Partnership Deed.

(2) If a partner acts in contravention of the provisions of sub-paragraph (1)(a),

(b) or (c), the Relevant Limited Partnership may, at its option, either take action for

damages and interest against the offending partner or demand payment of any profit

made by him in violation of the relevant prohibition.

(3) The provisions of this paragraph 14 shall be without prejudice to any other

remedy which a Limited Partnership may have against a general partner for breach

of duty.

(4) The provisions of this paragraph 14 or any other provisions of this Schedule

shall also be without prejudice to any other duties, fiduciary or otherwise, which

may be incumbent upon a general partner or to which a general partner may be

subject by virtue of the Partnership Deed or by virtue of any laws, regulations, rules

of the competent authority or any condition of any licence or other authorisation,

which may be applicable to such general partner.

(5) Save as otherwise expressly provided in this Schedule or in the Partnership

Deed, decisions of the general partners related to the business of the Limited

Partnership shall be taken by a simple majority of the general partners entitled to

participate in the decision.

Limited partners.

15. (1) A limited partner shall not perform any act of administration nor

transact business on behalf of the Limited Partnership, and shall not transact the

business of, si gn o r ex ecu te do cumen ts fo r or ot herw ise bin d th e Li mi ted

Partnership, except by virtue of a power of attorney given for specified acts or

transactions or otherwise as provided and in the circumstances contemplated in sub-

paragraph (2) of paragraph 28.

(2) A limited partner who acts or purports to act in contravention of the

provisions of sub-paragraph (1), shall be liable as if he were a general partner in

respect of all debts incurred as a result of his so acting.

(3) A limited partner shall not be deemed to have acted in contravention of the

provisions of sub-paragraph (1) by reason only of any one or more of the following

circumstances

(a) he is an employee, agent or contractor of the Limited Partnership or of a

general partner thereof;

(b) he acts as an officer, employee or shareholder of a corporate general

partner of the Limited Partnership, or acts as a partner of a general

partner of the Limited Partnership;

(c) he consults with and advises a general partner of the Limited

Partnership as to the business of the Limited Partnership;

(d) he investigates, reviews, approves or is advised as to the accounts or

affairs of the Limited Partnership;

(e) he exercises any right or power conferred on limited partners by this

Schedule or any right or power conferred on limited partners by the

Partnership Deed;

(f)

he approves or disapproves an amendment to the Partnership Deed;

(g) he participates in or requests the appointment or removal of an auditor

of the Limited Partnership;

(h) he calls, convenes, requests, attends or participates in, or votes as a

limited partner in, any meeting of the partners;

(i)

he participates in the appointment or removal of any person to serve or

serving on any board or committee of the Limited Partnership or of a

general partner thereof;

(j)

without prejudice to the generality of sub-paragraph (i), he appoints or

removes a representative to any advisory committee of the Limited

Partnership and, or undertakes such representative's actions in that

capacity;

(k) he acts as surety or guarantor of, or provides security for the obligations

undertaken by, the Limited Partnership;

(l)

he lends money to, borrows money from or enters into transactions with

the Limited Partnership;

(m) he approves or vetoes a type of investment or particular investment to

be made by the Limited Partnership;

(n) he exercises a right to opt into or out of any investment to be made by

the Limited Partnership;

(o) he approves or vetoes any valuation of the Limited Partnership's

investments;

(p) he approves or vetoes any conflict of interest relating to the Limited

Partnership or its business or any partner in the Limited Partnership.

(4) The provisions of the immediately preceding sub-paragraph shall not be

construed as meaning that, if a limited partner exercises any other right, power or

function, he has necessarily, by reason of that fact alone, acted in contravention of

the provisions of sub-paragraph (1).

(5) A limited partner may, subject to the provisions of the Partnership Deed and

as and to the extent provided therein, but without prejudice to any rights granted to

him by virtue of this Schedule -

(a) inspect the books of the Limited Partnership;

(b) with such assistance as may reasonably be required of the general

partners, examine and inquire into the state and prospects of the

business of the Limited Partnership, and advise the partners thereon;

(c) request and obtain true and full information of all things affecting the

Limited Partnership; and

(d) request and obtain a formal account of the affairs of the Limited

Partnership whenever circumstances render it just and reasonable.

Person holding himself out to be a general partner.

16. (1) A person, including a limited partner, who holds himself out as being a

general partner shall be held liable unlimitedly and jointly and severally with the

general partners for all the obligations contracted by the Limited Partnership while

he so holds himself out.

C OM PA N I E S

(2) Without prejudice to sub-paragraph (5) of paragraph 6, the inclusion in the

name of a Limited Partnership of the name of a person who is not a general partner

shall be taken into account by the court in determining whether such person is

holding himself out as being a general partner.

When limited partner ceases to be a partner.

17. (1) A person shall cease to be limited partner of a Limited Partnership

(a) upon the valid and absolute assignment of the whole of his interest in

the Limited Partnership; or

(b) at such time and, or upon the occurrence of such event as may be so

specified in the Partnership Deed.

Such cessation shall be evidenced by means of an entry to that effect in the

register of partners.

(2) The fact that a person has ceased to be a limited partner shall not relieve him

of any liability arising under paragraphs 6(5), 15(2), 16(1) and 25(2).

(3) The fact only that a person ceases to be a limited partner shall not constitute

a change or amendment to the Partnership Deed.

(4) Unless the Partnership Deed otherwise provides and subject to the

provisions thereof and to the provisions of paragraph 19 of this Schedule, in the

event of death or dissolution or other cessation of existence of a limited partner, the

Limited Partnership shall continue with the heirs or other relevant successors in title

to the respective interests of such limited partner in the Limited Partnership.

(5) When a person ceases to be a limited partner in a Limited Partnership in the

cases referred to in sub-paragraph (1)(b), such person shall have such rights as to

liquidation of his interests in the Limited Partnership and other rights to assets of the

Limited Partnership, and at such time or times, and shall be subject to such

obligations, as may be provided for in the Partnership Deed.

When general partner ceases to be a partner.

18. (1) A person shall, subject to the provisions of the Partnership Deed, cease

to be a general partner of a Limited Partnership, upon the occurrence of any of the

following events

(a) his resignation, retirement, removal or expulsion in accordance with the

requirements, if any, of the Partnership Deed;

(b) in the case of a natural person his bankruptcy, death or legal incapacity

or interdiction; or

(c) in the case of a general partner which is a body corporate, the

dissolution thereof.

Such cessation shall be evidenced by means of an entry to that effect in the

register of partners.

(2) In the cases referred in sub-paragraphs (1)(b) and (c), the curator or other

person having similar functions with respect to the estate of the bankrupt general

partner, the heirs or other relevant successors to the estate of the deceased general

partner, the guardian, tutor or other person having similar functions with respect to

the estate of the incapacitated or interdicted general partner, or the liquidator,

directors, general partners or equivalent body or persons charged with the

responsibility of the administration of the affairs of the dissolved general partner

after its dissolution, as the case may be, shall have a duty to inform the Limited

Partnership of the respective event mentioned in such sub-paragraphs (1)(b) and (c)

as soon as possible and in no case later than ten days following the happening

thereof.

(3) In the event of the cessation of a person as a general partner of a Limited

Partnership, howsoever such cessation has occurred, it shall be the duty of the

Limited Partnership to deliver to the Registrar for registration a notice of such fact

within fourteen days of such cessation or from the date that the Limited Partnership

became aware thereof, whichever is the later, and in default the Limited Partnership

and every general partner shall be liable to a penalty, and, for every day during

which the default continues, to a further penalty.

(4) In the cases referred in sub-paragraph (1)(a), it shall also be the duty of the

person ceasing to be a general partner to deliver to the Registrar for registration a

notice of such cessation within fourteen days of such cessation, and in default the

said person who ceased to be a general partner shall be liable to a penalty, and, for

every day during which the default continues, to a further penalty.

(5) The Registrar shall cause such notice as referred to in sub-paragraph (3) or

(4) to be registered.

(6) A general partner shall not be relieved of any obligation under this Schedule

until such time as the notice of cessation is registered by the Registrar. Nothing in

the foregoing shall affect the continued liability of a general partner in terms of law

for his obligations arising whilst he was a general partner and until the registration

of the notice of cessation as aforesaid.

Admission of additional limited partners.

19. (1) Subject to the provisions of the Partnership Deed, a Limited Partnership

shall allow any number of partners to become limited partners in the Limited

Partnership. A person shall not be admitted as a limited partner in a Limited

Partnership except -

(a) in accordance with the provisions of the Partnership Deed and subject to

any prior approval by the Limited Partnership required for such

admission in terms of the Partnership Deed and, or pursuant to

paragraph 5(1)(b)(iv) above;

(b) by the execution of an agreement in writing with the Limited

Partnership and, or with such other partners as required by the

Partnership Deed.

Such admission shall be evidenced by the entry of the particulars of the new

limited partners in the register of partners.

Assignment of interest of limited partner.

20. (1) Subject to the provisions of the Partnership Deed -

(a) the interest of a limited partner is assignable in whole or in part;

(b) an assignment by a limited partner of his interest in the Limited

Partnership or any part thereof

(i) shall not dissolve the Limited Partnership;

(ii) shall not be valid unless made in writing and in accordance with

other requirements, if any, of the Partnership Deed and this

Schedule, including (without limitation) any prior approval by the

Limited Partnership required for such assignment in terms of the

C OM PA N I E S

Partnership Deed and paragraph 5(1)(b)(iv) above;

(iii) shall not, unless and until the assignee is admitted to the Limited

Partnership as a limited partner in accordance with the provisions

of paragraph 19, entitle the assignee to become or to exercise any

right or power of a limited partner;

(iv) shall, upon the assignee being admitted to the Limited Partnership

as a limited partner in accordance with the provisions of

paragraph 19, entitle the assignee to the rights and powers and,

subject to item (v), render him subject to the restrictions and

obligations (including any obligation to make contributions to the

capital of the Limited Partnership) to which the assignor was

entitled or subject in respect of the interest assigned immediately

before the assignment, and simultaneously the assignor shall no

longer be entitled to exercise those rights and powers and, shall be

discharged from those restrictions and obligations;

(v) shall not relieve the assignor of any liability arising under

paragraphs 6(5), 15(2), 16(1) or 25(2).

(c) a limited partner, upon the valid and absolute assignment of the whole

of his interest in the Limited Partnership and the admission of the

assignee as a limited partner in accordance with the provisions of

paragraph 19, shall cease to be a limited partner and to be entitled to

exercise any right or power of a limited partner.

(2) The agreement or instrument of assignment in writing referred to in sub-

paragraph (1)(b)(ii) or an authentic copy thereof shall be delivered by the assignor or

the assignee to the Limited Partnership simultaneously with or as soon as possible

after the execution thereof, unless the Limited Partnership is also party to it.

(3) The admission of the assignee as a limited partner and the assignment of an

interest in the Limited Partnership between an assignee and an assignor shall be

effective on the date when the requirements and conditions for the admission of the

assignee as a limited partner referred to in paragraph 19 and the requirements of sub-

paragraph (1)(b)(ii) and (2) of this paragraph 20 have been satisfied or, if later, the

date agreed to between the assignor and the assignee in the agreement or instrument

of assignment, and in such latter case the assignee shall be admitted to the Limited

Partnership with effect from such later date.

Indemnification by the Limited Partnership.

21. (1) Subject to the provisions of the Partnership Deed and of sub-paragraph

(2), a Limited Partnership may indemnify any partner from and against all or any

claims, demands, debts and other liabilities whatsoever, and may also purchase and

maintain for any partner insurance against any such liability as aforesaid.

(2) The Limited Partnership may not however indemnify any general partner

against any liability which by virtue of any rule of law would attach to him in respect

of negligence, default or breach of duty or otherwise of which he may be guilty in

relation to the Limited Partnership

Provided that a Limited Partnership may indemnify any such general partner

against any liability incurred by him in defending any proceedings in which

judgment is given in his favour or in which he is acquitted

Provided further that nothing in this sub-paragraph (2) shall be construed as

preventing or restricting a Limited Partnership from purchasing and maintaining for

any general partner insurance against any such liability as is referred to above in this

sub-paragraph (2), or as preventing or restricting any such general partner from

personally purchasing and maintaining any such insurance.

Records.

22. (1) A Limited Partnership shall maintain the following or a copy thereof at

the registered office

(a) the Partnership Deed and every amendment thereof;

(b) a register of partners showing their full names and addresses together

with an indication of who is a general and who is a limited partner;

(c) in the case of a Non-Share Capital Limited Partnership, the capital

account of each limited partner showing whichever of the following is

applicable in relation to such limited partner -

(i) the amounts and dates of his contributions;

(ii) the amounts agreed to be contributed and the times at which or

events upon which the contributions are to be made;

(iii) the amounts and dates of any payments representing a return of

his contributions or any part thereof;

(iv) where an agreement or obligation to make a contribution is

released in whole or in part, the amount and the date of such

release;

(d) in the case of a Share Capital Limited Partnership, the capital account of

each limited partner showing whichever of the following is applicable

in relation to such limited partner -

(i) the number and class or classes (where applicable) of shares,

including fractions (where applicable), subscribed by such limited

partner and the dates of subscription;

(ii) the amount paid by such limited partner in respect of each share;

(iii) where applicable, the amounts agreed to be contributed by way of

subscription of further shares or by way of payment of the unpaid

part on shares already subscribed, and the times at which or

events upon which the contributions are to be made;

(iv) where applicable, the number and class or classes (where

applicable) of shares, including fractions (where applicable), of

such limited partner which have been redeemed or repurchased by

the Limited Partnership or otherwise reduced, and the dates of

such redemption, repurchase or reduction;

(v) where an agreement or obligation to pay amounts agreed to be

contributed by way of subscription of further shares or by way of

payment of the unpaid part on shares already subscribed is

released in whole or in part, the amount and the date of such

release;

(e) any report on any non-cash contribution as referred to in paragraph 41;

(f)

a register of debentures (where the Limited Partnership has issued any

debentures) showing the full names and addresses of the registered

holders of such debentures and particulars of the debentures held by

them respectively;

(g) its accounting records;

(h) the minutes of all meetings of the general partners;

C OM PA N I E S

(i)

all documents from time to time filed with the Registrar.

(2) All documents or copies of documents required by sub-paragraph (1) to be

kept at the registered office shall, subject to the provisions of the Partnership Deed,

be available for inspection by any partner, and in the case of the register of

debentures also by any person, during normal business hours.

(3) The documents mentioned in sub-paragraph (1)(b), (c) and (d) shall

constitute prima facie evidence of the matters specified therein.

(4) Notwithstanding the foregoing provisions of this paragraph the documents

described in sub-paragraph (1) may, provided that the Partnership Deed so permits,

instead of being maintained at the registered office, be maintained at such other

place as the general partners consider appropriate, where they shall, subject to the

provisions of the Partnership Deed, be available for inspection by any partner (and in

the case of the register of debentures also by any person) during normal business

hours.

(5) In the event that such other place as is mentioned in sub-paragraph (4) is

outside Malta, copies of accounts and of returns in respect of the business dealt with

in them and copies of minutes of meetings of general partners shall be sent to, and

kept at, a place in Malta, where they shall, subject to the provisions of the

Partnership Deed, be available for inspection by any partner (and in the case of the

register of debentures also by any holder of debentures) during normal business

hours.

(6) The copies of accounts and returns mentioned in sub-paragraph (5) which

are to be sent to and kept in Malta shall be such as to disclose with reasonable

accuracy the financial position of the business of the Limited Partnership at intervals

not exceeding six months.

(7) Any accounting records which a Limited Partnership is required by this

paragraph to keep shall be preserved by it for a period of ten years from the date on

which they are made and, if default is made in complying with this sub-paragraph,

the Limited Partnership and each general partner shall be liable to a penalty.

(8) Any account, record or other document required by this Schedule to be kept

by a Limited Partnership may be kept either by making entries in books or in any

other manner, including without prejudice to the generality of the foregoing,

computer or other electronic forms.

(9) If any such account, record or other document is kept by making entries

other than in a book -

(a) it shall be deemed for the purposes of this Schedule to be kept at a place

if access to it and written copies of it can be obtained at that place; and

(b) if the matters in question are recorded in non-legible form, the

recording thereof shall be capable of being reproduced in legible form.

(10) If in respect of a Limited Partnership there is a contravention of any of the

provisions of sub-paragraphs (1), (2), (5) or (6), the Limited Partnership and each

general partner shall be liable to a penalty and for any day during which the default

continues, to a further penalty.

(11) Any duty imposed by this Schedule to allow inspection, or to furnish a copy,

of documents to be kept by the Limited Partnership shall, irrespective of the medium

in which such documents are maintained, be construed as a duty to allow inspection,

or to furnish a copy, of such documents in legible form.

Accounts of a Limited Partnership.

23. (1) Every Limited Partnership shall maintain proper accounting records

which shall be

(a) sufficient to show and explain the Limited Partnership’s transactions;

(b) such as to disclose with reasonable accuracy, at any time, the Limited

Partnership’s financial position at that time;

(c) such as to enable the general partners to ensure that the Limited

Partnership’s balance sheet and profit and loss account are prepared

properly and in accordance with generally accepted accounting

principles and practice and in accordance with any relevant enactment

or regulations for the time being in force in Malta;

(d) such as to contain day to day entries of all sums of money received and

expended by the Limited Partnership and the matters in respect of which

the receipt and expenditure takes place; and

(e) such as to contain a record of the assets and liabilities of the Limited

Partnership.

(2) The general partners of every Limited Partnership shall prepare for each

accounting period individual accounts comprising the balance sheet as at the last day

of the accounting period to which they refer, the profit and loss account for that

period, the notes to the accounts and any other financial statements which may be

required by generally accepted accounting principles and practice. These documents

shall constitute a composite whole.

(3) The individual accounts of a Limited Partnership shall give a true and fair

view of the Limited Partnership’s assets, liabilities, financial position and profit or

loss.

(4) The individual accounts of a Limited Partnership shall be drawn up in

accordance with generally accepted accounting principles and practice applicable to

the type of Limited Partnership in question in terms of this Schedule or of the

provisions of this Act in so far as such provisions are applicable to the Limited

Partnership by virtue of this Schedule, or of regulations made by the Minister under

Article 66A(3)(c) or other provisions of this Act or under the Accountancy

Profession Act, and shall comply with the requirements of such generally accepted

accounting principles and practice and with the requirements of this Schedule, and of

the applicable provisions of this Act and of applicable regulations referred to above,

as to the form and content of the balance sheet and profit and loss account and as to

additional information to be provided by way of notes to the accounts.

(5) Where the application of the provisions of this Schedule, and the applicable

provisions of the Act or regulations referred to in sub-paragraph (4), would not be

sufficient to give a true and fair view within the meaning of sub-paragraph (3),

additional information shall be given.

(6) Where in exceptional cases the application of a provision of this Schedule,

or of an applicable provision of the Act or of regulations referred to in sub-paragraph

(4), is incompatible with the obligation for the individual accounts to give a true and

fair view, that provision shall be departed from in order to give a true and fair view.

Any such departure shall be disclosed in the notes to the accounts together with an

explanation of the reasons for it and a statement of its effect on the assets, liabilities,

financial position and profit or loss.

(7) * Articles 13 to 18 and 21 of the Commercial Code shall not apply to Limited

* This-sub-paragraph is not yet in force.

C OM PA N I E S

Partnerships.

(8) At the end of each accounting period of the Limited Partnership, the balance

sheet and profit and loss account of the Limited Partnership together with the report

of the general partners and the report of the auditors (where applicable) shall be

made available to the limited partners

(a) in the case of a Limited Partnership within the meaning of paragraph

24(2), within ten months after the end of the relevant accounting

reference period, or such shorter period as may be prescribed in terms of

the Investment Services Act and Investment Services Rules issued by

the competent authority under and within the meaning of the said Act;

and

(b) in the case of other Limited Partnerships, within such period as may be

stipulated in the respective Partnership Deed, or such shorter period as

may be prescribed in terms of the Investment Services Act and

Investment Services Rules issued by the competent authority under and

within the meaning of the said Act or in terms of regulations made by

the Minister under Article 66A(3)(c) or other provisions of this Act.

Application of Chapters IX and X of Part V of this Act.

24. (1) Save for what is stated in this Schedule or in regulations made by the

Minister under Article 66A(3)(c) or other provisions of this Act or under the

Accountancy Profession Act, the provisions of Chapter IX and Chapter X of Part V

of this Act other than article 184 shall, so far as applicable and so far as they are not

inconsistent with the provisions of this Schedule or of regulations referred to above,

apply to a Limited Partnership within the meaning of paragraph 24(2), with

references to "company" therein being construed as a reference to a Limited

Partnership within the meaning of paragraph 24(2), references to "directors" being

construed as a reference to general partners, reference to "members" being construed

as a reference to "partners", references to "general meeting" being construed as a

reference to a meeting of the partners.

(2)

A Limited Partnership referred to in sub-paragraph (1) shall be

(a) a Limited Partnership which is a Share Capital Limited Partnership; or

(b) a Non-Share Capital Limited Partnership where

(i) all the partners thereof with unlimited liability are limited liability

companies or partnerships en commandite or limited partnerships

with the capital divided into shares; and

(ii) where all of the direct or indirect partners of such Non-Share

Capital Limited Partnership having otherwise unlimited liability

in fact have limited liability by reason of those partners being

(aa) a limited liability company (whether public or private); or

(bb) a partnerships en commandite or limited partnership with its

capital divided into shares; or

(cc) an undertaking not governed by the laws of Malta but which

has a legal form comparable to that listed in sub-paragraph

(b)(ii)(aa) or (b)(ii)(cc) above.

(3) The provisions of Chapter IX of Part V of this Act, shall apply as aforesaid

to a Limited Partnership within the meaning of paragraph 24(2), subject to the

provisions of the Partnership Deed dealing with the manner, and with the rights of

partners or any of them in respect, of the appointment, re-appointment, removal,

replacement and fixing the remuneration of auditors of the Limited Partnership.

(4) The provisions of article 169 of the Act and of the Fifth Schedule to the Act

shall apply mutatis mutandis to a Limited Partnership within the meaning of

paragraph 24(2) which is a Variable Capital Limited Partnership as provided in

paragraph 35.

(5) Save as otherwise expressly provided in this Schedule or in any enactment

or in regulations made by the Minister as referred to in sub-paragraph (1), the

provisions of Chapter IX and Chapter X of Part V of this Act shall not apply to a

Limited Partnership which is not a Limited Partnership within the meaning of

paragraph 24(2), and the manner, the rights of partners or any of them in respect of,

and other matters relating to, the appointment, re-appointment, removal, replacement

and fixing the remuneration of auditors of such Limited Partnership, or the

preparation, form and content and approval of the accounts of such Limited

Partnership and their submission to the partners or any other partners, shall be

regulated by the relevant provisions of this Schedule, by regulations made from time

to time by the Minister as referred to in sub-paragraph (1) for this purpose, by any

other provisions of the Act (other than Chapter IX and Chapter X of Part V of the

Act) or any other enactment so far as applicable and so far as they are not

inconsistent with the provisions of this Schedule or of regulations referred to above

or which specifically relate or apply to such Limited Partnerships, and by the

provisions of the Partnership Deed.

Return of limited partner’s contribution.

25. (1) A Limited Partnership shall not, on dissolution or otherwise, make any

payment from its capital to any limited partner representing a return of any part of

his contribution to the Limited Partnership unless, at the time of and immediately

following the making of the payment, the Limited Partnership is solvent.

(2) Where the Limited Partnership is insolvent at the time of or immediately

following the making of any such payment, or in the event of insolvency of the

Limited Partnership within a period of six months immediately following the time of

making such payment, the payment shall, for a period of one year from the date of its

receipt by the limited partner, be repayable by him to the extent necessary to

discharge any debt of the Limited Partnership incurred at a time when his

contribution formed part of the assets of the Limited Partnership.

(3) Subject to the provisions of sub-paragraphs (1) and (2) and paragraph 30(11)

and (12), a limited partner may demand the return of his contribution -

(a) on the dissolution of the Limited Partnership; or

(b) at such time or upon the occurrence of such event or events as may be

specified in the Partnership Deed.

(4) A limited partner may, notwithstanding the nature of his contribution,

demand and receive only money in return, unless -

(a) the Partnership Deed provides otherwise; or

(b) all partners agree otherwise.

(5) Any reference in this paragraph, however expressed, to the receipt by a

partner of a payment shall include a reference to the release of any debt owed by him

and forming part of the assets of the Limited Partnership (including any obligation

on his part to make a contribution to the capital of the Limited Partnership,

including, in case of a Share Capital Limited Partnership, by way of subscribing for

further shares or paying up the unpaid part on shares already subscribed by him); and

C OM PA N I E S

accordingly any reference in sub-paragraph (2) to the making of a repayment by a

partner shall be deemed to include a reference to the due performance by him of the

debt or obligation.

(6) For the purposes of this Schedule the expression "solvent" means that the

Limited Partnership is able to pay its debts (other than debts described in paragraph

31(1)(c)(ii) to (v)) in full, as they fall due, out of the assets of the Limited

Partnership without recourse to the separate assets of the general partners not

contributed to the Limited Partnership; and the expression "insolvent" shall be

construed accordingly.

(7) A distribution of any assets of a Limited Partnership to a limited partner

shall be deemed to be a return of contribution for the purposes of the provisions of

sub-paragraph (1), to the extent that the distribution reduces the value of his share in

the assets of the Partnership, calculated on the basis of the value of the net assets of

the Limited Partnership, below the value of the amount contributed or agreed to be

contributed by him. In the case of a Share Capital Limited Partnership, there shall

also be deemed to be such a return of contribution where the shares held by a limited

partner are redeemed or repurchased by the Limited Partnership or are otherwise

reduced or, in the case of a Share Capital Limited Partnership other than a Variable

Capital Limited Partnership, where the nominal value of the shares held by a limited

partner is reduced.

(8)

The provisions of this paragraph are subject to those of paragraph 31.

Distributions by Limited Partnership.

26. Without prejudice to paragraphs 25 and 31, no distributions of capital or

profits shall be made to the partners if at the time or as a result of such distributions

the Limited Partnership would be insolvent.

Acts in fraud of creditors

27. (1) Without prejudice to paragraphs 25 and 26, every act transferring

property, whether corporeal or incorporeal, including any rights of action and any

renunciation of an acquired prescription, and every obligation incurred or other act

made by a Limited Partnership which is insolvent or which becomes insolvent as a

result of such act or obligation, and which is made under a gratuitous title for the

purpose of defrauding the creditors of the Limited Partnership, shall be null and void

as regards the body of creditors, of whatever kind they may be, even though the

parties interested be in good faith.

(2) Every act of the same kind and every obligation made or incurred under an

onerous title can be annulled if there be fraud also on the part of the party interested.

(3) Any such act or obligation shall be deemed to be fraudulent as regards the

party interested, if it is proved that such party knew of the insolvency of the Limited

Partnership (whether already existing at the time of the act or obligation or resulting

from such act or obligation) or of the existence of circumstances giving rise to such

insolvency.

Causes of dissolution of Limited Partnerships.

28. (1) A Limited Partnership shall be dissolved upon the occurrence of any of

the following events

(a) upon the happening of any event specified in the Partnership Deed;

(b) upon the date fixed for its duration in the Partnership Deed and stated in

the Partnership Registration Document, if any, unless a return or notice

of its extension is delivered to the Registrar for registration in terms of

paragraph 10(2) or (5) not less than fifteen days before the date so

fixed;

(c) upon the written agreement of all partners that the Limited Partnership

shall be dissolved;

(d) if there is no general partner for a period of six months;

(e) if there is no limited partner for a period of six months.

(2) Where no general partner remains, the limited partners may, for the said

period of six months, appoint one of their number or any other person for the

performance of acts of ordinary administration and any limited partner or other

person appointed pursuant to the provisions of this sub-paragraph shall not incur any

liability which would otherwise be incurred under this Schedule for performing acts

of ordinary administration during the said six month period.

(3) Subject to the provisions of the Partnership Deed and paragraph 28(1)(a),

(d) and (e) and without prejudice to paragraph 28(1)(c), a Limited Partnership shall

not be dissolved by any change in the limited partners or general partners, or by the

bankruptcy, insolvency, death, retirement, removal, resignation, legal incapacity or

interdiction or dissolution of any limited partner or general partner whether an

individual, partnership, company or other body corporate.

Dissolution by the Court.

29. (1) The Court may order the dissolution of a Limited Partnership on the

application of any partner or creditor or on the application of the Registrar if in its

opinion

(a) the Limited Partnership is insolvent;

(b) the business of the Limited Partnership has been suspended for an

uninterrupted period of twelve months: provided, for the avoidance of

doubt, that there will not be deemed to be a suspension of business for

the purposes hereof by reason only of the fact that the business of the

Limited Partnership is of its nature passive;

(c) the affairs of the Limited Partnership are being conducted in a manner

which is oppressive to any of the limited partners or prejudicial to their

interests as limited partners or is calculated to affect adversely the

carrying on of the business of the Limited Partnership;

(d) the affairs of the Limited Partnership are being conducted in such

manner as to defraud creditors or in an unlawful manner;

(e) there has been persistent default by the Limited Partnership or by any

general partner thereof in complying with the requirements of this

Schedule or any applicable regulations made under Article 66A(3) or

under this Act;

(f)

there are grounds of sufficient gravity to warrant the dissolution.

(2) Upon the making of an order under sub-paragraph (1) for the dissolution of

the Limited Partnership or at any time thereafter, the Court may make such other

orders in relation to the dissolution as it thinks fit and proper in the circumstances,

including an order for the appointment of one or more liquidators to wind up the

Limited Partnership’s affairs and distribute its assets.

General provisions applicable to winding up.

C OM PA N I E S

30. (1) Upon the dissolution of a Limited Partnership its affairs shall, unless a

liquidator has been appointed by the Court under paragraph 29(2) or under sub-

paragraph (2) of this paragraph or by the partners under sub-paragraph (3) of this

paragraph, be wound up by the general partners.

(2) Upon the dissolution of a Limited Partnership or at any time thereafter, the

Court may, on application of any partner (including an assignee thereof) or any

creditor or the Registrar or any liquidator, make such orders in relation to the

dissolution as it thinks fit and proper, including

(a) an order for the appointment of one or more liquidators to wind up the

affairs of the Limited Partnership and distribute its assets, and the fixing

of his remuneration;

(b) an order for the stay of judicial proceedings pending against the Limited

Partnership on such terms as the Court thinks fit.

The Court may also, on any such application, remove any liquidator from

office (whether appointed by the Court or by the partners) if the court is satisfied

that there exist sufficient grounds to warrant his removal.

(3) One or more liquidators may, upon the dissolution of a Limited Partnership

or at any time thereafter and before the appointment thereof by the Court as provided

herein, be appointed by the partners in the manner provided in the Partnership Deed

or as determined by agreement between them, and his remuneration may be fixed in

like manner. Where the partners fail to agree on the appointment of a liquidator, the

provisions of sub-paragraphs (1) shall apply, unless and until one or more liquidators

are appointed by the Court under sub-paragraph (2).

(4) A liquidator appointed by the partners (but not a liquidator appointed by the

Court) may be removed by a decision of the partners in the manner provided in the

Partnership Deed or as determined by agreement between them, and if as a result of

such decision there are no liquidators, the provisions of sub-paragraphs (1) shall

apply, unless and until one or more liquidators are appointed by the partners under

sub-paragraph (3) or by the Court under sub-paragraph (2).

(5) A liquidator, howsoever appointed, shall within fourteen days after his

appointment, deliver to the Registrar for registration a notice of his appointment

stating his name and residence, and in default he shall be liable to a penalty, and for

every day during which the default continues, to a further penalty.

(6) Where more than one liquidator is appointed, they shall act jointly and shall

be jointly and severally liable for their acts, unless the Court or the partners who

appointed them have otherwise provided. Unless already fixed by the Court, the

remuneration of a liquidator (whether appointed by the Court or by the partners) may

be fixed by agreement between the partners and the liquidator, failing which it shall

be fixed by the Court on application made under sub-paragraph (2) or an application

by the liquidator.

(7) On the appointment of a liquidator, whether under this paragraph or under

paragraph 29, all powers of the general partners and, where applicable, any power of

ordinary administration vested in any limited partner or other person pursuant to

paragraph 28(2), shall cease; and any person who purports to exercise any power of a

general partner or any power of administration or representation of the Limited

Partnership at a time when, pursuant to this sub-paragraph those powers have ceased,

shall be liable to a penalty, without prejudice to the provisions of paragraph 15(2) or

16(1) or any other applicable consequences prescribed by this Schedule. The

provisions of this sub-paragraph shall be without prejudice to the provisions of sub-

paragraph (8).

(8) Where a liquidator is appointed, the partner or partners vested with the

administration of the Limited Partnership shall -

(a) deliver to the liquidator all the assets and all the accounting records and

other documents of the Limited Partnership and shall draw up accounts

relating to their administration for the period since the preceding

accounts, and for the avoidance of doubt the liquidator shall take into

his custody or under his control all the property and all rights to which

he has reasonable cause to believe the Limited Partnership to be

entitled; and

(b) together with the liquidator, draw up a balance sheet showing the state

of affairs of the Limited Partnership as at the date of the dissolution.

(9) Upon the dissolution of a Limited Partnership the Limited Partnership shall

cease to carry on business except to the extent necessary for its beneficial winding

up. Where a liquidator is appointed, such liquidator shall have power to perform all

acts conducive and ancillary to the winding up of the affairs of the Limited

Partnership, but such liquidator shall not undertake any new transaction, except to

the extent necessary for its beneficial winding up. Where in relation to a Limited

Partnership there is a contravention of the provisions of this sub-paragraph, each

general partner or other partner responsible for the contravention or, as the case may

be, the liquidator shall be liable to a penalty.

(10) Upon the dissolution of a Limited Partnership, the persons winding up the

Limited Partnership’s affairs, in the name of and on behalf of the Limited

Partnership -

(a) may, to the extent necessary for the beneficial winding up of the

Limited Partnership, prosecute, defend or settle any civil or criminal

action or other legal proceedings and refer disputes or matters to

arbitration;

(b) shall receive and collect all sums and debts due to the Limited

Partnership;

(c) shall take every necessary step for the preservation of the rights of the

Limited Partnership and for the recovery of any sums or debts due to the

Limited Partnership;

(d) shall carry on the business of the Limited Partnership so far as may be

necessary for its beneficial winding up, and for this purpose they shall

have the power to do all acts, and to execute, in the name and on behalf

of the Limited Partnership, all deeds, receipts and other documents and

to represent the Limited Partnership in all matters and to do all things as

may be necessary for the winding up of the affairs of the Limited

Partnership and distributing its assets, to raise any money requisite even

on the security of the assets of the Limited Partnership and to appoint a

mandatory to act for them (in their capacity as the persons responsible

for the winding up) for particular purposes;

(e) shall dispose of the Limited Partnership’s property and realise its assets;

(f)

shall, in accordance with the provisions of paragraph 31 discharge the

Limited Partnership’s debts and distribute to the partners any remaining

assets of the Limited Partnership;

(g) may make any compromise or arrangement with creditors or persons

claiming to be creditors, or having or alleging themselves to have any

claim, present or future, certain or contingent, ascertained or which may

C OM PA N I E S

be due in damages against the Limited Partnership or whereby the

Limited Partnership may be rendered liable, and to refer any such

matter to arbitration;

(h) may make calls on partners for payment of unpaid contributions and

calls on partners with unlimited liability for payment of sums to cover

remaining liabilities of the Limited Partnership as referred to in sub-

paragraph (12) and shall draw up a list of partners who are liable to pay

such calls; and

(i)

may summon meetings of partners or of creditors of the Limited

Partnership for the purposes of ascertaining their wishes, or to give

them an account of or otherwise update them on the process of the

winding up or any matter relating thereto or for any other purpose in

connection with the winding up as they may think fit

Provided that the above shall be without prejudice to the personal liability of

the partners.

(11) Upon the dissolution of a Limited Partnership no limited partner may, except

in accordance with the provisions of paragraphs 25 and 31, withdraw any part of his

contribution, or otherwise claim as a creditor of the Limited Partnership.

(12) The persons conducting the winding up of a Limited Partnership (whether a

liquidator or the general partner or general partners pursuant to sub-paragraph (1))

shall not distribute any assets of the Limited Partnership among the partners unless

either the debts and liabilities of the Limited Partnership under paragraph 31(1) (a)

and (b) have been paid or sufficient funds have been set aside for the payment

thereof. Where the assets of the Limited Partnership are insufficient to meet its

aforesaid liabilities, the persons conducting the winding up of a Limited Partnership

may demand from the partners payment of the contribution, if any, due by them,

irrespective of the date when it falls due, and, if necessary, they may demand from

the partners with unlimited liability the sums required for the payment of the

aforesaid liabilities which are not covered by the contributions so demanded as

aforesaid and paid. The persons conducting the winding up of a Limited Partnership

may furthermore demand from the partners payment of the contribution, if any, due

by them or any part of it, irrespective of the date when it falls due, for the purpose of

adjusting the rights of the partners among themselves in accordance with paragraph

31 or otherwise in accordance with the Partnership Deed.

(13) Upon dissolution of a Limited Partnership, notice of the fact shall, within a

period of fourteen days from the date of dissolution, be filed by the general partners

or, where applicable, by the limited partner or other person vested with the ordinary

administration pursuant to paragraph 28(2), with the Registrar who shall cause a

notice of that fact to be published in the Gazette or on a website maintained by the

Registrar

Provided that, where the Limited Partnership is dissolved by order of the

Court, notice of the dissolution shall be given as aforesaid by the Registrar of

Courts

Provided further that, in cases of dissolution other than dissolution by order

of the Court, and where there is no general partner and no limited partner or other

person vested with the ordinary administration pursuant to paragraph 28(2), such

notice may be given by any limited partner and, where a liquidator has been

appointed (whether by the Court or by the partners) such notice shall be given by

such liquidator within fourteen days after his appointment.

(14) Where the general partners or the limited partner or other person vested with

the ordinary administration pursuant to paragraph 28(2) or the liquidator fail to give

the notice of dissolution as required by the provisions of sub-paragraph (13), they

shall be liable to a penalty, and for every day during which the default continues, to

a further penalty and, in the case of general partners, they shall continue to incur

liability as if they were the general partners of a Limited Partnership which had not

been dissolved.

(15) The dissolution of a Limited Partnership shall be deemed to have occurred

upon the earlier of the following

(a) the date of the occurrence of the event upon which, under the provisions

of this Schedule, the Limited Partnership is dissolved; or

(b) the date of the order by the Court under paragraph 29(1) for its

dissolution.

(16) All expenses properly incurred in the dissolution of a Limited Partnership,

including the liquidator’s remuneration, are payable from the assets of the Limited

Partnership in priority to all other debts.

(17) The persons conducting the winding up shall, at the request of any of the

partners, inform them as to the state and progress of the liquidation.

(18) The persons conducting the winding up of a Limited Partnership may, by

application, seek the Court’s directions as to any matter in relation to the winding up,

and upon such application the Court may make such order as it thinks fit and proper.

(19) The persons conducting the winding up, any partner or creditor may apply to

the Court to determine any question arising in the course of winding up of a Limited

Partnership, or to exercise any power as respects the enforcement of calls or any

other matter and the Court, if satisfied that the determination of the question or the

required exercise of power will be just and beneficial, may accede wholly or

partially to the application on such terms and conditions as it thinks fit or may make

such other order on the application as it so determines.

(20) Without prejudice to the generality of sub-paragraph (19)

(a) if any person is aggrieved by any act or decision of the persons

conducting the winding up, that person may apply to the Court and the

Court may confirm, reverse or modify the act or decision complained

of, and make such order on the matter as it thinks just;

(b) without prejudice to sub-paragraph (20)(a), if an application is made to

the Court by any creditor or partner complaining on the conduct of the

persons conducting the winding up, the Court shall inquire into the

matter and take such action thereon as it may think expedient;

(c) the Registrar may, if he thinks fit, apply to the Court to examine the

liquidator or any other person on oath concerning the winding up;

(d) the Court may at any time after the dissolution of a Limited Partnership,

on the application either of the liquidator or other person conducting the

winding up or any creditor or partner or the Registrar, and on proof to

the satisfaction of the Court that all proceedings in relation to the

winding up ought to be stayed, make an order staying the proceedings,

for such duration and on such terms and conditions as the Court thinks

fit: provided that any such stay of proceedings shall not affect the

continuing validity and operation of the dissolution; and on an

application as aforesaid the Court may, before making an order, require

the persons conducting the winding up to furnish to the Court a report

with respect to any facts or matters which are in its opinion relevant to

C OM PA N I E S

the application;

(e) the Court, on the application either of the liquidator or other person

conducting the winding up or any creditor or partner

(i)

may require any partner liable to make any payments or calls as

referred to in sub-paragraph (12) and any person who holds any

money, property or accounting records and documents in his

hands to which the Limited Partnership is prima facie entitled, to

pay, deliver, convey, transfer or otherwise hand over such money,

property, accounting records or documents to the persons

conducting the winding up forthwith or within such time as the

Court directs;

(ii) may summon before it any general partner of the Limited

Partnership or any officer of such general partner or any other

person known or suspected to have in his possession any property

of the Limited Partnership or supposed to be indebted to the

Limited Partnership, and any person whom the Court deems

capable of giving information concerning the promotion,

formation, trade, dealings, affairs or property of the Limited

Partnership, and the Court may require any such general partner,

officer or person to produce any accounting records and

documents in his custody relating to the Limited Partnership; and

(iii) on proof of probable cause for believing that any such person as

aforesaid is about to abscond or to remove or conceal any of his

property for the purpose of evading payments due by him or of

avoiding examination respecting the affairs of the Limited

Partnership, may make such orders as it thinks fit to secure

payments by such person or the preservation and availability of

information relating to the Limited Partnership, including seizure

and, or the safekeeping of his accounting records, documents and

movable property until such time as the Court thinks fit;

(f)

the Court may, on the application either of the liquidator or other person

conducting the winding up, fix a time or times within which creditors

are to prove their debts or claims or are to be excluded from the benefit

of any distribution made before those debts are proved, and may make

such orders regarding the publication of such time or times as it thinks

fit; and

(g) the Court may, with respect to all matters relating to the dissolution and

winding up of a Limited Partnership and in exercising any of its powers,

have regard to the wishes of the creditors or partners of the Limited

Partnership, as proved to it by any sufficient evidence, and may, if it

thinks fit, for the purpose of ascertaining those wishes direct that

meetings of the creditors or partners be called, held and conducted in

such manner as the Court considers appropriate and may appoint a

person to act as chairman of any such meeting and to report the result

thereof to the Court.

A copy of every order made under this sub-paragraph (20)(d) above shall

forthwith be forwarded by the Registrar of Courts to the Registrar for registration.

(21) Subject to the provisions of paragraph 31 and subject to any provision of

this Schedule or any other law as to preferential debts or payments, the property of a

Limited Partnership shall, on its winding up, be applied in satisfaction of its

liabilities pari passu. In a winding up of a Limited Partnership, all debts payable on

a contingency, and all claims against the Limited Partnership, present or future,

certain or contingent, ascertained or which may be due in damages, shall be

admissible as proof against the Limited Partnership, a just estimate being made, so

far as possible, of the value of such debts or claims as may be subject to any

contingency or which are due in damages but not ascertained, or which for some

other reason do not bear a certain value.

(22) As soon as a Limited Partnership’s affairs are fully wound up, the persons

who conducted the winding up shall

(a) prepare an account of the winding up, giving details of the conduct

thereof, and the disposal of the Limited Partnership’s property, and of

their receipts and payments, and shall draw up a scheme of distribution

and they shall cause the account to be audited by one or more auditors

appointed by a decision of the partners or in default by the Court; and

(b) provide all partners with a copy of the said account and scheme of

distribution together with the auditors’ report thereon, which shall be

served on such partners by judicial act or by registered mail with

confirmation of receipt.

(23) The provisions of article 153 of the Act shall apply to an auditor appointed

in terms of sub-paragraph (22)(a). Such auditor shall not be a person who has held

the office of auditor of the Limited Partnership at any time during the last three years

immediately preceding the date of dissolution.

(24) (a) The persons who conducted the winding up shall, after ensuring that the

provisions of sub-paragraph (22)(b) have been complied with, deliver to

the Registrar a copy of the said account and scheme of distribution and

the auditor’s report thereon: provided that such account and scheme of

distribution so delivered to the Registrar need not contain the names of

limited partners, and it shall be sufficient to show the total amounts

distributed to such partners pursuant to the scheme of distribution.

(b) The Registrar, on receiving the account and the scheme of distribution

together with the auditors’ report, shall forthwith register them, and on

the expiration of three months from the publication of the notice

referred to in article 401(1)(e) of the Act, the Registrar shall strike the

name of the Limited Partnership off the register, whereupon the Limited

Partnership’s certificate of registration shall cease to be valid

Provided that the Court may, on the application filed within the said period

of three months by the liquidator or by any other person who appears to the Court to

have an interest, make an order deferring the date at which the name of the Limited

Partnership shall be struck off the register for such time and subject to such

conditions as the Court may provide, and any partner or creditor may also, during the

said period of three months, by application to the Court object to any matter relating

to the winding up as shown in the winding up account, the scheme of distribution

and the auditors’ report, and the Court shall then make such order as it thinks fit and

proper.

(25) When an order by the Court is made under the proviso to sub-paragraph

(24)(b), the Registrar of Courts shall forthwith forward a copy of it to the Registrar

for registration and the Registrar shall defer applying the provisions of sub-

paragraph (24)(b) in accordance with the order given by the Court referred to in that

sub-paragraph.

(26) * Part III of the Commercial Code relating to bankruptcy shall not apply to a

Limited Partnership. References in other laws other than Part III of the Commercial

C OM PA N I E S

Code to a bankrupt shall, when the context requires, be interpreted as including

references to a Limited Partnership being wound up in circumstances of insolvency

under the provisions of this Schedule, and references to bankrupt shall be construed

accordingly.

Distribution of assets upon dissolution.

31. (1) Upon the dissolution of a Limited Partnership, the assets shall be

distributed in the following order -

(a) firstly, to creditors other than partners, to the extent otherwise permitted

by law, in satisfaction of debts of the Limited Partnership, according to

their priority and ranking as regulated by law;

(b) secondly to limited partners who are creditors and who are not also

general partners, to the extent otherwise permitted by law, in

satisfaction of debts of the Limited Partnership other than debts

described in sub-paragraph (c), according to their priority and ranking

as regulated by law;

(c) finally, subject to the provisions of the Partnership Deed, to partners as

follows -

(i) firstly, to limited partners for the return of their contributions or,

where appropriate, for the release of their obligations to make

contributions;

(ii) secondly, to limited partners for their share of the profits on their

contribution;

(iii) thirdly, to general partners other than for capital and profits;

(iv) fourthly, to general partners in respect of capital;

(v) finally, to general partners in respect of profits.

Preservation of accounting records and documents after liquidation.

32. (1) The accounting records and the documents of the Limited Partnership

shall be kept by the liquidator, if any, or by the person elected for that purpose by the

majority of the general partners, and shall be so kept for a period of ten years from

the date at which the name of the Limited Partnership was struck off the register. The

election of such person shall take place within fourteen days from the registration of

the notice referred to in paragraph 30(23) and shall not be effected until such person

has signified his acceptance in writing to the general partners within fourteen days

from his election

Provided that where there is no liquidator and the general partners fail to

elect such person or where such person refuses to accept his election, the accounting

records and documents shall be delivered to the Registrar within fourteen days of the

non-acceptance or failure to elect as the case may be, and the Registrar shall keep

such records for the said period of ten years.

(2) Where a person has been elected to keep the accounting records and the

documents of the Limited Partnership, or where the general partners have failed to

elect such a person, the general partners shall inform the Registrar accordingly

within fourteen days of the date when the election becomes effective or from the

failure to elect within the prescribed period, as the case may be, and in default, the

general partners shall be liable to a penalty.

*

This sub-paragraph is not yet in force.

(3) If the liquidator or the person elected by the general partners and who has

accepted to keep the accounting records and documents of the Limited Partnership

fails to keep them for the period prescribed by sub-paragraph (1), he shall be liable

to a penalty.

(4) If the liquidator or the person elected by the general partners to keep the

accounting records and documents of the Limited Partnership dies, his heirs shall be

obliged to deliver the said accounting records and documents to the Registrar within

six months and the Registrar shall keep them for the remainder of the period

prescribed by sub-paragraph (1), and in default such heirs shall be liable to a penalty.

Capital of Limited Partnerships and conversion of status.

33. (1) Without prejudice to the foregoing provisions of this Schedule, the

capital of a Limited Partnership, may be divided into shares or may not be so

divided.

(2) A Non-Share Capital Limited Partnership may change its status to a Share

Capital Limited Partnership, by a decision taken in accordance with the provisions of

the Partnership Deed, or, in the absence of any such provision, with the consent of

all the partners, both general and limited

Provided that where one or more limited partners, holding in the aggregate

not more than one-fourth of the total contributions of the limited partners, have not

given their consent the Limited Partnership may nevertheless proceed with the

change of its status, but it shall be required, for the purpose of such change, to

liquidate and reimburse to every such partner who has not given his consent, if he so

requests, his interest in the Limited Partnership on such terms as may be agreed, or

as the Court, on a demand of either the Limited Partnership or the limited partner,

may deem fit to order.

(3) A Share Capital Limited Partnership may change its status to a Non-Share

Capital Limited Partnership, by a decision taken in accordance with the provisions of

the Partnership Deed or, in the absence of any such provision, with the consent of all

the partners, both general and limited

Provided that where one or more limited partners, holding in the aggregate

not more than one-tenth of the share capital of the Limited Partnership, have not

given their consent, the Limited Partnership may nevertheless proceed with the

change of its status, but it shall be required, for the purpose of such change, to

redeem the shares held by every such partner in the Limited Partnership who has not

given his consent, if he so requests, on such terms as may be agreed, or as the Court,

on a demand of either the Limited Partnership or of the limited partner, may deem fit

to order.

(4) The Limited Partnership which has decided to change its status in

accordance with sub-paragraph (2) or sub-paragraph (3) shall deliver to the Registrar

for registration the return of the resultant change in the Partnership Deed in

accordance with the provisions of paragraph 10(2).

(5) The change of status referred to in sub-paragraph (2) or in sub-paragraph (3)

shall not take effect unless and until it is registered as required by sub-paragraph (4).

Application of provisions relating to shares in the Act.

34. (1) Without prejudice to the proviso to article 89 of the Act (in particular,

but without limitation, the provisions of paragraph (c) of such proviso), the

provisions of articles 89 to 96 and 99 to 102 of the Act shall apply mutatis mutandis

to a Limited Partnership whose securities are offered to the public, with references to

C OM PA N I E S

"public company" therein being construed as a reference to such a Limited

Partnership and references to "directors" being construed as a reference to general

partners, and with such other adjustments as are necessary to accommodate the fact

that these provisions are being applied to a Limited Partnership as aforesaid.

(2) The provisions of article 116(1), (2) and (5) and of article 117 of the Act

shall, in so far as they are not inconsistent with the foregoing provisions of this

Schedule, apply mutatis mutandis to a Share Capital Limited Partnership, with

references to "company" therein being construed as a reference to such a Limited

Partnership, references to "memorandum or articles" being construed as a reference

to the Partnership Deed, and references to "resolution passed at a separate meeting"

being construed as a reference to a decision taken as provided in the Partnership

Deed, and with such other adjustments as are necessary to accommodate the fact that

these provisions are being applied to a Limited Partnership as aforesaid.

(3) The provisions of article 127(1) and (3) to (6) of the Act shall, in so far as

they are not inconsistent with the foregoing provisions of this Schedule, apply

mutatis mutandis to a Limited Partnership, with references to "company" therein

being construed as a reference to the Limited Partnership, references to

"memorandum of association" or "articles of association" being construed as a

reference to the Partnership Deed, and references to "members" being construed as a

reference to partners, and with such other adjustments as are necessary to

accommodate the fact that these provisions are being applied to a Limited

Partnership.

Limited Partnerships with variable share capital.

35. (1) A Partnership Deed of a Share Capital Limited Partnership within the

meaning of paragraph 2 (1) (a) above may provide for the constitution of the Limited

Partnership as a Limited Partnership with variable share capital and the following

provisions of this paragraph shall apply thereto.

(2) In addition to the matters indicated in paragraph 7(3), the Partnership Deed

of a Variable Capital Limited Partnership as well as the Partnership Registration

Document to be delivered to the Registrar in terms of the said paragraph 7(3) shall

state

(a) that the share capital of the Limited Partnership shall be equal to the

value for the time being of the issued share capital of the Limited

Partnership;

(b) that such share capital shall be divided into a specified number of shares

without assigning any nominal value thereto;

(c) that the actual value of the paid up share capital of the Limited

Partnership shall be at all times equal to the value of the assets of any

kind of the Limited Partnership after the deduction of its liabilities,

without prejudice to paragraph 38(4).

(3) Without prejudice to the provisions of paragraph 6, the name of a Variable

Capital Limited Partnership shall at the end, after the words "Limited Partnership" or

its abbreviation "LP" or "L.P." as required by paragraph 6(1), be followed by the

words "with variable share capital" or by "VC” or "V.C.".

(4) No person carrying on any business in Malta, other than a Variable Capital

Limited Partnership registered under this Schedule or a partner therein, shall in any

way or manner describe itself or himself or so hold itself or himself out or

reasonably be understood to indicate, or use any name which indicates or may

reasonably be understood to indicate that it or he is, or is carrying on business as, a

Variable Capital Limited Partnership registered under this Schedule or, as the case

may be, a partner therein. Without prejudice to the aforesaid, an undertaking which

is validly registered under the laws of a country other than Malta with a name which

includes "Limited Partnership" or its abbreviation "LP" or "L.P." followed by the

words "with variable share capital" or by "VC” or "V.C.", or a partner therein, who

lawfully carries on business in Malta, shall not be deemed to be in breach of this sub-

paragraph (4) simply by reason of the fact that it uses and carries on such business

under the name by which it is so validly registered in its country of registration or, as

the case may be, describes himself as a partner in such undertaking with such name.

A person who contravenes the provisions of this sub-paragraph shall be liable to a

penalty.

(5)

A Variable Capital Limited Partnership shall not issue partly paid up shares.

(6) Without prejudice to the provisions of paragraphs 25 and 35, a Variable

Capital Limited Partnership may purchase or redeem its own shares, directly or

indirectly out of the assets of the Limited Partnership, on such terms and in such

manner as may be provided by the Partnership Deed.

(7) Shares of a Variable Capital Limited Partnership which have been purchased

or redeemed by such Limited Partnership itself shall be cancelled and the amount of

the Limited Partnership’s issued share capital shall be reduced by the amount of the

consideration paid by the Limited Partnership for the purchase of the shares, and

nothing in this Act shall require a Variable Capital Limited Partnership to create any

reserve.

(8) Any reference in any provision of this Act, which and to the extent that it

applies to a Variable Capital Limited Partnership, to the nominal value of an issued

or allotted share in, or of the issued or allotted share capital of, a company shall be

construed, in the case of a Variable Capital Limited Partnership, as a reference to the

net asset value.

Multi-Class Limited Partnership.

36. (1) A Share Capital Limited Partnership may be constituted as a multi-class

partnership where in terms of its Partnership Deed its capital is, or is capable of

being, divided into different classes of shares, not constituting any distinct sub-fund.

(2) A Multi-Class Limited Partnership may from time to time create and offer or

issue a new class or classes of shares, in accordance with the provisions of the

Partnership Deed, and subject to any approval of the competent authority or any

other requirements or conditions as may be applicable to such Limited Partnership

under or in terms of the Investment Services Act or regulations issued thereunder or

in terms of Investment Services Rules issued by the competent authority under and

within the meaning of the Investment Services Act. Such class or classes of shares

shall not constitute a distinct sub-fund or sub-funds of the Limited Partnership.

(3) Each class of shares in a Multi-Class Limited Partnership may be

denominated in a different currency provided that a class of shares may be

denominated only in one currency.

(4) A Multi-Class Limited Partnership may not elect for the segregation of any

of its assets and liabilities.

(5) A Multi-Class Limited Partnership having its capital denominated in

different currencies shall draw up its annual accounts in any one of such currencies.

(6) The provisions of sub-paragraph (5) shall mutatis mutandis apply to the

drawing up of any other reports or financial statements which may be required under

C OM PA N I E S

this Act or by the competent authority.

(7) For the purposes of sub-paragraphs (5) and (6), the conversion from the base

currency of a class of shares into the currency in which the annual accounts of the

Multi-Class Limited Partnership are to be drawn up shall be in accordance with

generally accepted accounting principles.

Multi-Fund Limited Partnership.

37. (1) A Share Capital Limited Partnership may be constituted as a multi-fund

partnership where in terms of its Partnership Deed its capital is, or is capable of

being, divided into different classes of shares, where one class or a group of classes

of shares constitute a distinct sub-fund of the Limited Partnership, as may be

provided for in the Partnership Deed

Provided that the initial capital may or may not be organized in one or more

sub-funds in terms of this paragraph.

(2) A Multi-Fund Limited Partnership may from time to time create and offer or

issue a new class or classes of shares which may constitute a new sub-fund or be

comprised in an existing sub-fund or sub-funds of the Limited Partnership, in

accordance with the provisions of the Partnership Deed, and subject to any approval

of the competent authority or any other requirements or conditions as may be

applicable to such Limited Partnership under or in terms of the Investment Services

Act or regulations issued thereunder or in terms of Investment Services Rules issued

by the competent authority under and within the meaning of the Investment Services

Act.

(3) A class or classes of shares constituting a sub-fund in a Multi-Fund Limited

Partnership may be denominated in a different currency provided that a class of

shares may be denominated only in one currency.

(4) A Multi-Fund Limited Partnership having its capital denominated in

different currencies shall draw up its annual accounts in any one of such currencies.

(5) The general partner or general partners of a Multi-Fund Limited Partnership

shall maintain proper accounting records of the assets and liabilities of each sub-

fund in the base currency of any class of shares constituting that sub-fund.

(6) The provisions of sub-paragraph (4) shall mutatis mutandis apply to the

drawing up of any other reports or financial statements which may be required under

this Act or by the competent authority.

(7) For the purposes of sub-paragraphs (4) and (6), the conversion from the base

currency of a class of shares into the currency in which the annual accounts of the

Multi-Fund Limited Partnership are to be drawn up shall be in accordance with

generally accepted accounting principles.

Segregation of assets and liabilities of Multi-Fund Limited Partnerships.

38. (1) A Multi-Fund Limited Partnership may in its Partnership Deed elect to

have the assets and liabilities of each sub-fund comprised in that Limited Partnership

treated for all intents and purposes of law as a patrimony separate from the assets

and liabilities of each other sub-fund of such Limited Partnership. Where a Multi-

Fund Limited Partnership makes the election aforementioned the assets and

liabilities of each sub-fund of that Multi-Fund Limited Partnership shall, for all

intents and purposes of law, be deemed to constitute a patrimony separate from the

assets and liabilities of each other sub-fund of such a Limited Partnership.

(2)

Save for such proportion of the liabilities of a Multi-Fund Limited

Partnership which by virtue of the Partnership Deed or by virtue of the terms of the

offer or of the issue of the shares constituting a sub-fund are, or are to be attributable

to, one or more sub-funds in the proportion established therein, the liabilities

incurred in respect of each sub-fund shall be paid out of the assets forming part of its

patrimony and the creditors in respect thereof shall have no claim or right of action

against the other assets of the Limited Partnership, and the following rules shall

apply

(a) proceedings in relation to the Multi-Fund Limited Partnership shall

respect the legal status of each sub-fund as a patrimony separate from

the assets and liabilities of each other sub-fund of the Limited

Partnership in terms of this Schedule;

(b) proceedings shall apply mutatis mutandis to the sub-fund as though it

were a distinct legal entity and with such modifications as are necessary

to accommodate the fact that the sub-fund is not a Limited Partnership;

and any Proceedings in relation to one sub-fund shall not have any

effect on the assets of any other sub-fund of the Limited Partnership or

of the Limited Partnership itself; and

(c) where, for the avoidance of doubt, a sub-fund which comprises a

separate patrimony in terms of this Schedule is being wound up, and

where a liquidator of such sub-fund is appointed, the provisions of

paragraph 30(7) shall apply solely with respect to such sub-fund; and

accordingly all the powers of the general partners shall cease solely in

respect of that sub-fund.

"Proceedings" in this sub-paragraph refers to any proceedings in terms of

paragraphs 28 to 32 of this Schedule.

(3) The general partner or general partners of a Multi-Fund Limited Partnership

shall hold or cause to be held such separate records, accounts, statements and other

documents as may be necessary to evidence the liabilities and assets of each sub-

fund as distinct and separate from the assets and liabilities of other sub-funds in the

same Limited Partnership.

(4) When a Variable Capital Limited Partnership is established as a Multi-Fund

Limited Partnership and elects to have the assets and liabilities of its sub-funds

treated as distinct patrimonies, the Partnership Deed as well as the Partnership

Registration Document to be delivered to the Registrar in terms of paragraph 7(3)

shall provide that the actual value of any sub-fund shall be at all times equal to the

value of the assets of any kind of the particular sub-fund after the deduction of such

sub-fund’s liabilities, and this in lieu of what is stated in paragraph 35(2)(c).

Non-applicability of articles 186 and 187(1) of the Act.

39. To the extent that they would otherwise (but for the provisions of this

paragraph) apply, the provisions of articles 186 and 187(1) of the Act shall not apply

to a Multi-Class Limited Partnership and to a Multi-Fund Limited Partnership.

Fractional Shares.

40. (1) A Share Capital Limited Partnership may, subject to the provisions of

the Partnership Deed, issue fractional shares up to such number of decimal places as

shall be specified in the Partnership Deed, and under such terms and conditions as

may be stipulated therein.

(2) Fractional shares shall be automatically consolidated into a whole share of

the same class when the fractional shares held by one partner become equal to a

C OM PA N I E S

whole share.

Contributions other than in cash.

41. (1) Without prejudice to paragraph 5(3), the contribution of a partner in a

Limited Partnership may only consist of cash or assets capable of economic

assessment, and such contributions shall be paid or transferred by the partner to the

Limited Partnership within such time or times as specified in the Partnership Deed,

and the following provisions of this paragraph shall apply to any such contributions

which are non-cash assets contributions.

(2) A report on any contribution other than in cash shall be drawn up before the

transfer of the contribution to the Limited Partnership and

(a) in the case of a Share Capital Limited Partnership, if and to the extent

that the non-cash contribution is to be transferred to the Limited

Partnership in consideration for the acquisition of shares therein on

original subscription, such report shall be drawn up before the Limited

Partnership is registered; or

(b) in the case of a Share Capital Limited Partnership, if and to the extent

that the non-cash contribution is to be transferred to the Limited

Partnership in consideration for the acquisition of shares on a

subsequent issue, such report shall be drawn up before the relevant

shares are issued; or

(c) in the case of a Share Capital Limited Partnership which is not a

Variable Capital Limited Partnership, if and to the extent that the non-

cash contribution is to be transferred to the Limited Partnership in

consideration for the payment of any unpaid part on shares already

subscribed at any previous time, such report shall be drawn up before

the transfer of the contribution to the Limited Partnership,

by one or more experts who are independent of the Limited Partnership and

approved as provided in the Partnership Deed (who may also be the auditors of the

Limited Partnership) or, in case of a Limited Partnership within the meaning of

paragraph 2(1)(a) above which is licensed by the competent authority as a collective

investment scheme in terms of the Investment Services Act, by such person as

provided in and in accordance with Investment Services Rules issued for that

purpose by the competent authority from time to time.

(3) The report referred to in sub-paragraph (2) shall, in the case of a Limited

Partnership within the meaning of paragraph 2(1)(a) above which is licensed by the

competent authority as a collective investment scheme in terms of the Investment

Services Act, shall be drawn up in such manner and shall contain such particulars as

may be required by Investment Services Rules issued for that purpose by the

competent authority from time to time

(4) The report referred to in sub-paragraph (2) shall, in the case of a Limited

Partnership other than a Limited Partnership referred to in sub-paragraph (3), shall

contain at least a description of each of the assets comprising the non-cash

contribution as well as the methods of valuation which have been used and

(a) in the case of a Share Capital Limited Partnership other than a Variable

Capital Limited Partnership, shall state whether the values arrived at by

the application of these methods correspond at least to the number and

nominal value, and, where applicable, to the premium on the shares to

be issued for such assets; or

(b) in the case of a Variable Capital Limited Partnership, shall state whether

the values arrived at by the application of these methods at least

correspond to the net asset value of the shares to be issued for such

assets.

(5) In both cases referred to in sub-paragraphs (3) and (4), the value of the

assets comprising the non-cash contribution shall be deemed to be their fair market

value at the time of the transfer thereof to the Limited Partnership as provided in

paragraph 5(3) and shall be valued accordingly.

(6) In all cases, the report referred to in the foregoing provisions of this

paragraph or a copy thereof shall be kept amongst the records of the Limited

Partnership as provided in paragraph 22 and shall be subject to the provisions of

such paragraph 22.

(7) The provisions of this paragraph shall be without prejudice to the provisions

of paragraph 42.

Issue of shares at a discount.

42. (1) It shall be lawful for a Share Capital Limited Partnership to make a

discount to an existing partner who has committed by written agreement with the

Limited Partnership to subscribe for any shares in the Limited Partnership, which

discount shall be in consideration for such commitment, provided that

(a) such discount shall apply exclusively to any outstanding commitment

arising under the above-mentioned agreement;

(b)

authority therefor is given by the Partnership Deed;

(c) the nature of the discount shall be disclosed in the manner required by

sub-paragraph (2);

(d) in the case of a Variable Capital Limited Partnership, in no event shall

the value of such shares, issued at a discount, be reduced as a result of

such discount to below the net asset value at the time the partner, to

whom the discount is being granted, first subscribed for the shares in

terms of the aforementioned agreement; and

(e) in the case of a Share Capital Limited Partnership other than a Variable

Capital Limited Partnership, in no event shall the value of such shares,

issued at a discount, be reduced as a result of such discount to below the

nominal value of such shares.

(2) If shares are issued at a discount which is in excess of that permitted by this

paragraph, the holder thereof shall be bound to pay the Limited Partnership an

amount equal to such excess, with annual interest at the rate of two percentage points

over the minimum bid rate set by the European Central Bank for the main re-

financing operations of the Eurosystem.

(3) The conditions specified in sub-paragraph (1) shall be clearly disclosed in

the Partnership Deed, and where the shares of the Limited Partnership are offered

through a prospectus or other offering document issued by the Limited Partnership,

they shall at least be disclosed in such prospectus or other offering document.

Pledging of securities of Limited Partnerships.

43. (1) The pledge of shares in a Share Capital Limited Partnership or of other

securities in a Limited Partnership shall be subject to the provisions of this

paragraph.

C OM PA N I E S

(2) Securities may, if the Partnership Deed so provides or if permitted under the

conditions of the offer or the issue of those securities, be pledged by their holder in

favour of any person as security for an obligation. The pledge of securities shall be

constituted by means of an instrument in writing entered into between the pledgor

and the pledgee.

(3) Notice of the pledge shall be delivered by the pledgor or the pledgee to the

Limited Partnership within fourteen days of the granting of the pledge. The pledge of

securities shall be recorded in the register of the holders of the respective securities.

(4) The pledge of securities shall be effective in relation to a third party only

from the date of the recording of the pledge in the register of the holders of the

respective securities referred to in sub-paragraph (3)

Provided that the Limited Partnership shall, upon a request in writing made

by a third party who may show an interest therein, disclose whether a pledge of

securities has been recorded in the register of the holders of the respective securities,

including the name of the pledgor and the pledgee, the amount of securities pledged

and the date of the recording of the pledge.

(5) Saving the provisions of sub-paragraph (4), during the existence of a pledge

of securities, any transfer or other assignment of the pledged securities made by the

pledgor, whether by onerous or gratuitous title, shall be null and void

Provided that any such transfer or other assignment made with the consent

of the pledgee shall be valid and the securities to be transferred or assigned shall

continue to be subject to the pledge.

(6) Without prejudice to the right of the pledgee to apply for the judicial sale of

the securities and notwithstanding the provisions of the Civil Code or of the

Partnership Deed, in the event of a default under the agreement of pledge and upon

giving notice by judicial act to the pledgor and the Limited Partnership, the pledgee

shall be entitled to -

(a) dispose of the securities which are pledged in his favour; or

(b) appropriate and acquire the securities himself; or

(c) request the Limited Partnership to purchase or redeem the pledged

securities in settlement of the debt due to him or of part thereof

Provided that the remedy of the pledgee in sub-paragraph 6(c) above shall

only apply if and to the extent that the relevant securities would, in terms of the

Partnership Deed or the conditions of the offer or the issue of such securities, entitle

the holder thereof to request the repurchase or redemption thereof by the Limited

Partnership, and such request by the pledgee shall be made in accordance with the

procedure, and shall be subject to the same terms and conditions, for such repurchase

or redemption as set out in the Partnership Deed or the conditions of the offer or the

issue of the relevant securities

Provided further that the exercise of any remedies of the pledgee in sub-

paragraph 6(a) to (c) shall be subject to any securities holding eligibility criteria and

minimum holding requirements as may be applicable in respect of the relevant

securities in terms of the Investment Services Act and Investment Services Rules

issued by the competent authority under and within the meaning of the said Act, in

terms of the Partnership Deed and, or in terms of the conditions of the offer or the

issue of such securities.

(7)

For the purposes of sub-paragraph (6)

(a) in the case where the relevant pledged securities consist of shares in a

Variable Capital Limited Partnership, the value of such securities shall

be their current net asset value; and

(b) in the case of other pledged securities, the value of such securities

(i)

shall be such value specified, or such value arrived at by the

application of such valuation method specified, in the pledge

agreement between the pledgor and the pledgee; or

(ii) failing such specification in the pledge agreement as referred to in

sub-paragraph (7)(b)(i), shall be such value as may be established

by agreement between the pledgor and the pledgee after notice of

default has been given by the pledgee to the pledgor in terms of

the sub-paragraph (6); or

(iii) failing such specification in the pledge agreement as referred to in

sub-paragraph (7)(b)(i) and failing agreement between the

pledgor and the pledgee as referred to in sub-paragraph (7)(b)(ii),

shall be the fair value of the securities obtaining on the date of the

notice of default referred to in sub-paragraph (6) determined by a

certified public accountant appointed by agreement between the

pledger and the pledgee at the relevant time or, failing such

agreement, appointed by the Civil Court, First Hall, on the

application of the pledgee

Provided that, notwithstanding what is provided above in this sub-

paragraph, when the pledgee exercises his remedy under sub-paragraph 6(c) above

(where applicable), the value of the pledged securities for the purposes of such

remedy shall be, and the Limited Partnership shall repurchase or redeem the relevant

securities at, such value which is specified or otherwise calculated in terms of the

Partnership Deed or the conditions of the offer or the issue of such securities.

(8) Where the Partnership Deed or the conditions of the offer or the issue of the

pledged securities requires any holder thereof wishing to transfer such securities to

offer them on a pre-emptive basis to other holders of such securities, the pledgee

shall be obliged, prior to the exercise of the rights granted by this sub-paragraph (6),

to offer any such securities to those other holders at the price determined in

accordance with sub-paragraph (7), which offer shall be kept open for at least ten

working days.

(9) In the exercise of his rights under this paragraph, the pledgee shall only

dispose of, appropriate or request the repurchase or redemption of such number of

securities as are needed to raise sufficient proceeds to repay the debt due. All

remaining securities shall be released to the pledgor.

(10) It shall be lawful for the parties to an agreement of pledge of securities to

agree on the person or persons who shall exercise all the rights belonging to the

holder of securities, including voting rights and the right to receive income,

dividends, profits, interest or any other payments due on such securities

Provided that, should the agreement between the parties not make provision

for such matters, all rights belonging to a holder of securities shall, for the duration

of the pledge, be exercised by the pledgor until such time as he defaults under the

agreement of pledge or until the pledgee enforces his security; and in any such case,

upon giving notice by a judicial act to the pledgor and the Limited Partnership, all

the rights belonging to the pledgor shall immediately become exercisable by the

pledgee

Provided further that, unless the pledgor and the pledgee have otherwise

agreed in the pledge agreement and notice thereof has been given to the Limited

C OM PA N I E S

Partnership, income, dividends, profits, interests or any other payments due on

securities which are pledged shall, during such time as the pledge is registered in the

register of the holders of the respective securities, be paid by the Limited Partnership

to the pledgee who shall appropriate any such amounts received to the interest due

on the debt secured by the pledge, and, if there is an excess, to the capital.

(11) Notice of termination of the pledge shall be delivered by the pledgee to the

Limited Partnership within fourteen days of the termination of the pledge. The

termination of the pledge shall be recorded in the register of the holders of the

respective securities.

(12) (a) In the case of a pledge of securities in a Limited Partnership which

securities are listed and traded on a Maltese regulated market and in

respect of which arrangements have been made for the maintenance by

such regulated market of the relevant register of the holders thereof, the

provisions of sub-paragraphs (3) to (8) and (11) shall not apply to such

listed and traded securities. The following provisions shall apply

instead

(i) the pledgor or the pledgee shall deliver within fourteen days of

the granting of the pledge of a listed and traded security a notice

of the pledge to the Maltese regulated market, which shall also be

served with a notice of termination of the pledge by the pledgee

within fourteen days of the termination of the pledge;

(ii) the Limited Partnership whose listed and traded securities have

been pledged shall also be notified of the pledge and of its

termination within the said periods and the Limited Partnership

shall record that fact in the register of the holders of the

respective securities;

(iii) such pledge of securities shall be effective in relation to a third

party only from the date of delivery of the notice of the pledge to

the Maltese regulated market and any transfer or other assignment

made therefrom by the pledgor, whether by onerous or gratuitous

title, of the pledged securities shall be null and void; and

(iv) the pledgee shall, in the event of a default under the agreement of

pledge and upon giving notice by judicial act to the pledgor, the

Maltese regulated market and the Limited Partnership, have the

securities sold through a person duly licensed under the

Investment Services Act.

(b) In the case of a pledge of securities in a Limited Partnership which are

listed and traded on a regulated market other than a Maltese regulated

market, or on an equivalent market in a non-Member State or non-EEA

State, the provisions of sub-paragraphs (3) to (8) and (11) shall not

apply and in the event of a default under the agreement of pledge, the

pledgee shall, upon notice in writing to the pledgor and the Limited

Partnership have the securities sold through a person duly authorised for

this purpose.

(c) References in this paragraph to the maintenance by a regulated market

of the register of the holders of the respective securities shall be deemed

to include a reference to the maintenance of the said register by a duly

authorised central securities depositary and the delivery of the notices

referred to in this paragraph shall be construed accordingly.

Matters subject to Partnership Deed.

44. (1) Without prejudice to the provisions of this Schedule, matters relating to

the issue and repurchase or redemption of shares by a Share Capital Limited

Partnership, the manner and timing and other matters relating to payment of

contributions (including payment on shares in a Share Capital Limited Partnership)

by partners in a Limited Partnership, the manner and timing and other matters

relating to payments (whether of profits, return of contributions or otherwise) to

partners by a Limited Partnership, matters relating to meetings and decisions of

partners or any of them, and in general any matters relating to the Limited

Partnership, shall be regulated by and shall be made in accordance with and subject

to the terms and conditions of the Partnership Deed.

(2) Without prejudice to the generality of sub-paragraph (1) and without

prejudice to the provisions of paragraphs 25 and 35, a Share Capital Limited

Partnership may, if and to the extent permitted by the Partnership Deed, purchase or

redeem its own shares, directly or indirectly out of the assets of the Limited

Partnership, on such terms and in such manner as may be provided by the

Partnership Deed.

Investment Services Rules.

45. Without prejudice to the provisions of article 66A(3) of the Act, the

competent authority may issue Investment Services Rules in terms of article 6(2)(b)

of the Investment Services Act for the better carrying out of the provisions of this

Schedule.

Administrative penalties in respect of Limited Partnerships.

46. (1) Where any provision of this Schedule provides for the imposition of a

penalty, the amount of such penalty shall be determined by reference to Part II of this

Schedule, which specifies the maximum penalty that may be imposed by the

Registrar under any of the provisions of this Schedule.

(2) In Part II of this Schedule, the first column indicates the paragraph and sub-

paragraph of this Schedule which prescribes that a penalty shall be imposed, the

second column gives a general description of the infringement, which description

shall not be relied on in interpreting any provision of this Schedule, the third column

prescribes the maximum penalty and the fourth column prescribes the maximum

daily default penalty, if any. The penalty shall become due on the day on which the

default occurs and the daily default penalty shall be due for every day during which

the default continues and shall accrue from the day following that on which the

default occurs.

(3) Action by the Registrar for the recovery of a penalty under this Schedule

shall be prescribed by the lapse of five years from the day on which the default

occurs.

(4) In relation to penalties raised under this Schedule, the provisions of article

401 of this Act shall apply mutatis mutandis.

PART II - PENALTIES

Daily

Paragraph

Default

Penalty

Penalty

6(6)

Person other than a Limited Partnership or a partner

therein falsely indicating existence of Limited

Partnership

€500

None

6(7)

Person using name falsely indicating existence of Limited

Partnership

€500

None

Paragraph

Default

Penalty

10(6)

Failure of any general partner, vested with administration

and representation, to deliver to the Registrar for

registration the return of changes in the Partnership Deed,

within fourteen days from the change

18(3) & Failure of Limited Partnership and any general partner, or

failure by person who ceased to be a general partner, as

(4)

applicable, to notify the Registrar of the cessation of a

person as a general partner, within fourteen days as

mentioned in paragraph 18(3) or paragraph 18(4), as

applicable

22(7) Failure by Limited Partnership and any general partner to

keep any of the accounting records mentioned for a

period of ten years from the date when they were made

€1,200

22(10) Failure by the Limited Partnership or any general partner

to maintain the documents mentioned and as provided,

make them available for inspection, and failure in respect

of documents which are to be sent and kept in Malta

39(5) Failure by liquidator to notify the Registrar of his

appointment, within fourteen days of such appointment

30(7) Exercise by any person of the powers pertaining to the

general partners or any power of administration or

representation of the Limited Partnership after the

appointment of the liquidator

€1,200

30(9) Exercise by any person of the business of the Limited

Partnership following its dissolution

€1,200

30(14) Failure of the general partners, or the limited partner or

other person vested with the ordinary administration or

the liquidator to give notice of dissolution as required by

paragraph 30(13)

32(2) Failure of general partners to inform Registrar of election

of a person for custody of records/documents after

liquidation, within fourteen days of such election, or of

failure to elect such a person, within fourteen days from

the failure to elect within the prescribed period for

election

32(3) Failure of liquidator or elected person to keep records/

documents of the Limited Partnership for prescribed

period

€1,200

32(4) Failure of heirs of liquidator or elected person to deliver

records/documents of the Limited Partnership within 6

months after death of liquidator or elected person

35(4) Person other than a Variable Capital Limited Partnership

or a partner therein falsely indicating existence of

Variable Capital Limited Partnership

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 11 Contributions deemed to be made in ownership. — COMPANIES ACT Open official source

Unless specifically provided in the deed of partnership,

things contributed to the partnership shall be deemed to have been

transferred in full ownership

Provided that, where any of the partners has contributed his

own services only, the contributions made by the other partners

shall, unless specifically provided in the deed of partnership, be

deemed to have been made in usufruct.

Laws of Malta — Chapter 386 — COMPANIES ACT

Eleventh Schedule — COMPANIES ACT Open official source

Amended by

IV. 2003.170, 172.

(Article 427)

Substituted by

L.N. 425 of 2007.

Amended by

IX. 2008.45;

XXII. 2014.23;

V.2020.39;

XVIII.2024.21.

Substituted by

I.2026.42.

ADMINISTRATIVE PENALTIES

Daily

Article

Default

Penalty

penalty

6(9)

Failure to indicate particulars concerning

commercial partnership on business letters,

etc., and officer of commercial partnership

failing to state capacity in which he signs a

document on behalf of the commercial

partnership

€465

None

6(10)

Liquidator failing to include statement on

business letters, etc., that the commercial

partnership is being wound up or failing to

include names of liquidators of company

being wound up

€465

None

7A(4)

Failure of partner of partnership en nom

collectif to comply with article 7A(2) and (3)

€465

€23

Any person who knowingly makes use of a

name falsely implying the existence of a

partnership

€2,329

None

19(4)

Partners failing to give notice that a person

becomes or has ceased to be a partner of a

partnership

€465

€23

26(2)

Partners failing to keep accounting records

for ten (10) years

€1,164

None

Failure to comply with the requirements of

articles 36 and 37(3)

€465

€23

50(2)

Failure to inform the Registrar where a

person has been elected to keep the

accounting records and the documents of the

partnership, or where the partners have failed

to elect such a person within fourteen (14)

days

€465

None

50(3)

Failure of liquidator or elected person to keep

accounting record s and documents of

partnership for the prescribed period

€1,164

None

50(5)

Failure of heirs of elected person to deliver

accounting record s and documents of

partnership to the Registrar within six (6)

months

€465

None

C OM PA N I E S

Daily

Article

Default

Penalty

penalty

51A(4)

Failure of partner of partnership en nom

commandite or limited partnership to comply

with article 51A(2) and (3)

€465

€23

66(6)

Failure of partner vested with

administration or representation to deliver

to the Registrar a copy of any documents

altering or adding to the deed of

partnership of a partnership en

commandite or limited partnership the

capital of which is divided into shares to

the Registrar or failure to deliver amended

deed of partnership

€465

€23

70(6)

Trading or carrying on business under

certain prohibited names

€465

€23

74(2)

Failure of company to deliver to Registrar

report of transfer of non-cash asset from

subscriber or member

€1,164

None

79(5)

Failure of officer to deliver a copy of any

resolution altering or adding to a company’s

memorandum or articles to the Registrar or

failure to deliver amended memorandum or

articles

€465

€23

83(12)

Failure of officer to deliver a copy of the

notice of reduction of the issued share capital

to the Registrar, when applicable

€465

€23

85(4)

Failure to comply with sub-articles (1) to (3)

of article 85

€465

€23

88(11)

Failure to comply with sub-articles (6) or (8)

of article 88

€465

€23

Breach o f article 89 in r espect of the

obligation to issue a prospectus or for the

issue of a form of application for shares or

debentures

€2,329

None

93(2)

Issue of a prospectus before registration

thereof

€2,329

€46

96A(2)

Failure of officers to provide Registrar with

notice that the company issued an offer of

securities to the public in a third country

€500

€25

97(5)

Failure of company and its officers to keep in

a separate account money received from

applicants in pursuance of a prospectus

€2,329

€46

103(2)

Failure to comply with article 103(1)

€465

€23

104(3)

Failure of directors to convene a general

meeting in case of serious loss of capital

€465

€23

106(2)

Failure of officers of company to provide

Registrar with a copy of resolution for

company to acquire its own shares otherwise

than by subscription

€465

€23

Daily

Article

Default

Penalty

penalty

106(8)

Failure of officers of company to deliver to

the Registrar for registration a copy of the

notice within fourteen days after the

cancellation of shares becomes effective

€465

€23

113(4)

Failure of officer to disclose commissions,

discounts or allowance on issue of shares

€465

€23

115(6)

Failure of officers to provide Registrar with

notice of redemption of preference shares

€465

€23

119(6)

Failure to comply with sub-articles (2) and

(5) of article 119

€465

€23

120(4)

Failure of officers of company to comply

with provisions with regard the issuance of

share certificates

€465

€23

123(4)

Failure of officers of company to comply

with provisions with regard to the register of

members

€465

€23

124(4)

Failure of officers of company to keep proper

register of debentures

€465

€23

128(3)

Failure of officers of company to hold annual

general meeting

€2,329

€46

133(3)

Failure of officers of company to give notice

to members of right to vote by proxy at a

meeting of the company

€465

None

133(5)

Officer of company breaching further

provisions as to votes by proxy at meetings of

the company

€465

None

138(8)

Failure to appoint a company secretary

€465

€23

145(2)

Director failing to disclose interest in a

contract or a proposed contract

€2,329

None

146(2)

Officers of company failing to send a return

as to change in directors, or secretary or

representation

€465

€23

149(4)

Officers of company failing to take minutes

of general meetings and all proceedings at a

director’s meeting and to keep minute book at

registered office

€1,164

None

151(6)

Officers of company failing to give notice to

Registrar of default in appointment of

auditors

€465

€23

154(3)

Officer and auditors of subsidiary

undertaking failing to give information to

auditors of parent company

€465

None

154(4)

Officers of parent company failing to provide

auditors with inform ation concerning

overseas subsidiary

€465

None

157(2)

Officers of company failing to give notice to

Registrar of resolution removing an auditor

€465

€23

159(3)

Officers of company failing to give notice

to Registrar of resignation of an auditor

€2,329

€46

C OM PA N I E S

Daily

Article

Default

Penalty

penalty

160(5)

Directors failing to take reasonable steps to

convene a meeting requisitioned by a

resigning auditor

€2,329

None

162(1)

Auditor failing to comply with requirements

of article 161 upon ceasing to hold office

€1,164

€34

162(3)

Officers of company failing to comply with

article 161 upon an auditor’s ceasing to hold

office

€1,164

€34

163(7)

Officers failing to keep accounting records

for ten years

€1,164

None

176(4)

Directors approving annual accounts which

do not comply with the provisions of this Act

€2,329

None

176(5)

Officers of company issuing or delivering to

Registrar annual accounts not duly signed

€465

None

177(4)

Directors failing to comply with requirements

as to Directors’ report

€1,164

None

178(4)

Officer circulating, filing or delivering to the

Registrar unsigned directors’ report

€1,164

None

179(7)

Officers of company failing to state names of

auditors in auditors’ report or assurance

179C(4)

report

€465

None

180(4)

Company and its officers failing to send

copies of annual accounts to persons entitled

to receive such copies

€1,164

None

180(6)

Officers of company failing to provide

document on demand by person entitled to it

€465

€23

181(3)

Directors failing to lay annual accounts or

laying annual accounts that do not comply

with this Act before a general meeting

€2,329

€46

183(6)

Directors failing to deliver or delivering

defective annual accounts, or defective

information related to sustainability reporting

in the directors’ report to the Registrar

€2,329

€46

184(3)

Officers of company failing to file annual

return

€2,329

€46

209(2)

Officers of private company offering shares

or debentures for sale to the public, or

209(3)

allotting or agreeing to allot any shares in or

debentures of the company, or allowing any

equity securities of the company to be

admitted to listing or trading

€2,329

None

212(6)

Officers of company failing to deliver notice

to Registrar of becoming or ceasing to be a

single member company

€465

€23

212(9)

The single member failing to record in

writing all agreements between him and the

company

€1,164

None

Daily

Article

Default

Penalty

penalty

213C(4)

Failure of directors or persons to comply with

provisions relating to reporting obligations

under articles 213B, 213C, 213D and Part II

of the Fourth Schedule

€2,329

€46

226(6)

Persons breaching article 226 on preparation

of statement to official receiver as to affairs

of company ordered by court to carry out

winding up

€2,329

€46

265(2)

Officers of company failing to deliver to the

Registrar notice of resolution for dissolution

and voluntary winding up

€465

€23

270(4)

Directors failing to summon general meeting

or failing to apply to the court for

appointment of a liquidator

€2,329

€46

272(2)

Liquidator failing to summon meeting of

creditors where a company is unable to pay

debts

€2,329

None

273(2)

Liquidator failing to hold a general meeting

where winding up continues for more than

twelve (12) months

€1,164

None

274(2)

Liquidator failing to provide Registrar with a

copy of the winding up account or a return of

the general meeting on members’ voluntary

winding up

€465

€23

274(3)

Liquidator failing to call final meeting in

members’ voluntary winding up

€465

None

278(6)

Directors failing to comply with requirements

as to creditors meeting following resolution

for dissolution and voluntary winding up

€2,329

None

279(3)

Failure of directors to apply to the court to

appoint liquidator

€2,329

€46

283(2)

Liquidator failing to summon meetings of

company and of creditors where winding up

continues for more than twelve (12) months

€465

None

284(2)

Liquidator failing to provide Registrar with a

copy of winding up account or a return of the

company and creditors’ meetings on a

creditors’ voluntary winding up

€465

€23

284(3)

Liquidator failing to call general meeting or

creditors’ meeting on creditors’ voluntary

winding up

€1,164

None

290(2)

Liquidator failing to notify Registrar of his

appointment

€465

€23

322(2)

Liquidator failing to comply with periodic

reporting requirements

€1,164

€34

324(3)

Liquidator failing to keep accounts,

accounting records and documents of the

company during the period specified

€1,164

None

C OM PA N I E S

Daily

Article

Default

Penalty

penalty

327(4)

Officer failing to annex to memorandum a

copy of court’s order, comprom ise or

arrangement

€465

€23

328(6)

Company and officers failing to comply with

the requirements of article 328

€2,329

None

328(7)

Director of the company failing to give notice

to the company and to any debenture holder

of such matters relating to himself as may be

necessary for the purposes of article 328

€2,329

None

329(5)

Failure to deliver a copy of the court order for

the sanctioning of a compromise or

arrangement to the Registrar

€465

€23

Officer or agent of overseas company failing

to comply with provisions as to registration

or returns of oversea company

€465

€23

399A(1)

Liquidator, officer or agent of oversea

company failing to give notice to

Registrar of winding-up of overseas

company or closure of branch or place of

business

€465

€23

399A(2)

Liquidator of overseas company failing to

notify Registrar of his appointment

€465

€23

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 12 Contribution of a debt owing to a partner. — COMPANIES ACT Open official source

Where a partner has contributed to the partnership a debt

owing to him, he shall not be discharged until the partnership

obtains payment of the amount for which the debt was contributed

and, in case of non-payment at the due date, he shall be liable,

jointly and severally with the debtor, for the said amount with

interest from the date the debt contributed fell due.

Laws of Malta — Chapter 386 — COMPANIES ACT

Twelfth Schedule — COMPANIES ACT Open official source

Amended by

IV. 2003.169.

(Article 3)

TABLE OF CONCORDANCE

Articles of

Marginal note for the article in the Ordinance

Articles of Act

Ordinance

1. Short title.

2. Interpretation.

2 to the extent

that the

definitions are

contained therein

3. Law governing commercial partnerships.

4. Formation of partnership.

5. Different kinds of partnerships.

4 (1)

6. Indication of particulars concerning

partnerships in business letters, etc.

7. Definition.

8. Agreement to pay share of profits.

9. Partnership-name.

9, 18

10. Penalties for use of partnership-name

including name of fictitious person, etc.

11. Contributions deemed to be made in ownership.

12. Contribution of a debt owing to a partner.

13. Valuation of contribution.

14 (e)

14. How partnership is constituted.

15. Contents of deed of partnership.

16. Registration of deeds of partnership.

17. Duty of Registrar and effect of registration.

18. Where certificate of registration is not issued.

19. Changes in deed of partnership.

20. Where alteration consists in change of

partnership-name.

21. Reductions in contribution of a partner and

dissolution of a partnership before

period fixed for its duration.

22. Right of creditors of a partner to oppose

enlargement of duration of a partnership.

23. Duties of Registrar of Courts.

24. How deed of partnership may be altered.

C OM PA N I E S

25. Administration and representation of a

partnership.

25 (1)

26. How partnership may be bound.

25 (2), (3)

27. New partners.

28. Distribution of profits.

29. How rights of creditors of a partner are

enforceable.

30. A partner may not compete with partnership.

31. Death of a partner.

32. Expulsion of a partner.

33. Cessation of membership.

34. Rights of persons ceasing to be partners.

35. Dissolution of partnerships en nom collectif.

36. Notice of dissolution.

37. How a partnership en nom collectif may be

wound up.

38. Power to remove liquidator.

39. Remuneration of liquidator.

40. Costs of winding up payable in priority to

other claims.

41. Penalty.

42. Powers until provision is made for winding up.

43. Duties of partners vested with administration.

44. Powers of liquidators.

45. Liquidator not to distribute assets before

paying debts.

46. Duty of liquidator to give information, to

render account and prepare scheme of

distribution.

47. Rules applicable to distribution of assets.

48. Approval of accounts and scheme of distribution.

49. Striking of name of partnership off register.

50. Preservation of books of accounts, etc., after

dissolution.

51. Definition.

52. Applicability of provisions governing

partnerships en nom collectif.

53. Partnership-name.

54. Contribution of limited partner not to include

personal services.

55. Contents of deed of partnership.

56. Rights of general partners.

57. Administration and representation.

58. Appointment of partners to administer and

represent partnership.

59. Limited partner cannot take part in

management of partnerships.

60. Communication of yearly accounts to limited

partners.

61. Article 30 not to apply to limited partners.

62. Limited partner not bound to restore profits

received in good faith.

63. Assignment of interest by limited partner.

64. Death of limited partner.

65. Dissolution of partnership en commandite.

66. Division of capital into shares.

67. Definition.

68. How company is constituted.

69. Contents of memorandum.

70. Name of company.

71. Objects of company.

72. Minimum share capital.

73. Articles of association.

74. Registration of memorandum and articles.

75. Duty of Registrar and effects of registration.

76. Where certificate of registration is not issued.

77. Alterations and additions to memorandum

and articles.

78. Reduction of share capital.

79. Change of name of company.

80. Alterations in memorandum or articles

increasing liability to contribute to share

capital not to bind existing members

without consent.

81. Authentication of documents.

82. Issue of applications for shares in or

debentures of a company to be made with

a prospectus.

83. Dating of prospectus and matters to be stated

therein.

84. Penalty.

85. Prospectus including a statement by experts.

86. Registration of prospectus.

87. Restriction on alteration of terms mentioned in

prospectus.

-

C OM PA N I E S

88. Civil liability for mis-statements in prospectus.

89. Document containing offer of shares or

debentures for sale to be deemed prospectus.

90. Interpretation of provisions relating to prospectus. 96

91. No allotment of share capital unless seventy-five

per cent subscribed.

92. No allotment after lapse of three months from

issue of prospectus.

-

93. Time of the opening of the subscription lists.

94. Revocability of applications for shares or

debentures.

95. Return as to allotments.

96. Company may not hold its own shares.

105, 106, 107,

108, 109,112

97. Company may not hold shares in its holding

company nor provide financial assistance for

purchase of or subscription for its own, or its

holding company’s shares.

98. Conditions for payment of commissions,

discounts, etc.

99. Application of premium received on issue of

shares.

100. Redeemable preference shares.

101. Rights of holders of special classes of shares

and variations thereof.

102. Numbering of shares.

103. Transfer of shares.

104. Registration of transfer at request of transferor.

105. Issue of certificates.

106. Share warrants.

107. Register of members.

108. Register of debentures.

109. Inspection of registers.

110. Power to close registers.

111. Statutory meeting.

-

112. Holding of annual general meeting.

113. Penalty.

128(3)

114. Convening of extraordinary general meeting

on requisition.

115. Length of notice for calling meetings.

116. General provisions as to meetings and votes.

117. Power of court to order meeting.

132 (1)

118. Proxies.

119. Right to demand a poll.

120. Extraordinary resolutions.

121. Directors.

122. Restrictions on appointment of director.

123. Removal of directors.

140 (1) to (5)

124. Casual vacancy.

140 (6)

125. Disqualification for appointment as director.

126. Director may not compete with company.

127. Prohibition of loans, etc., to directors.

128. Duty of director to disclose interest in a

contract with company.

129. Return as to changes among directors.

130. Joint and several liability of directors.

131. Provisions as to liability of officers and auditors.

132. Minutes of proceedings.

133. Keeping of books of account.

134. Profit and loss account and balance sheet.

181, 182

135. General provisions as to contents and

form of accounts.

136. Signing of balance sheet.

137. Directors’ report to be attached to balance sheet.

177, 181

138. Inspection of accounts.

139. Penalty.

Incorporated in

relevant articles

140. Appointment and remuneration of auditors.

151, 152, 156

141. Disqualification for appointment as auditor.

142. Auditor’s report.

179,181

143. Right of access to books and to attend

at general meetings.

154, 155

144. Annual return.

145. Documents to be annexed to annual return.

146. Penalty.

Incorporated in

relevant articles

147. Definition.

148. Provisions not applicable to private companies.

Incorporated in

relevant articles

149. Exemption of private company from

requirements of article 145, etc.

150. Dissolution of companies.

151. Notice of dissolution and calling of meeting for

appointment of liquidator.

265, 279

C OM PA N I E S

152. Appointment, removal and remuneration

of liquidator.

270, 278, 279,

281, 289, 293

153. Notice of appointment of liquidator.

154. Penalty.

Incorporated in

relevant articles

155. Powers of directors and convening of

general meetings.

267, 295

156. Applicability of articles 43, 44 and sub-article

(1) of article 45.

287, 288

157. Calls for payment of unpaid share capital.

158. Duties of liquidator where winding up continues

for more than one year.

273, 283

159. Duties of liquidator when affairs have been

completely wound up.

274, 284

160. Approval of accounts and scheme of

distribution.

275, 285

161. Name of company to be struck off the register.

275, 285, 324

162. Conversion of partnerships.

163. Amalgamation of partnerships.

337, 343, 357

164. Registration of the conversion or amalgamation

of partnerships.

331, 338, 350

165. Where partnership ceases to exist on

conversion or amalgamation.

332, 339, 343 (4)

166. Partners with unlimited liability to remain

bound unless creditors consent to conversion.

333, 340

167. Rights of creditors to oppose conversion

or amalgamation.

334, 341, 351

168. Continuing or new partnership succeeds

partnership ceasing to exist.

335, 342, 354 (1)

169. Definition.

170. Consent of associates required for admission

of other associates.

171. Relations of parties vis-à-vis third parties

and among themselves.

172. Only associating party acquires rights and

assumes obligations.

173. Rights of associating party and of associates.

174. Liability of associate.

175. Agreements allowed between parties.

176. No formalities required for association

en participation.

177. Application of articles 178 to 182.

178. Documents, etc., to be delivered by oversea

companies carrying on business in Malta.

179. Return to be delivered by oversea company

where documents, etc., altered.

180. Accounts of oversea company.

181. Other obligations of oversea company.

182. Penalties.

183. Application of articles 184 to 187.

184. Documents, etc., to be delivered by oversea

partnerships carrying on business in Malta.

185. Return to be delivered by oversea partnerships

where documents, etc., altered.

186. Other obligations of oversea partnerships.

187. Penalties.

188. Dating of prospectus and particulars to be

contained therein.

189. Application of articles 85, 86 and 88.

393, 396, 397

190. Interpretation of provisions as to prospectuses.

191. Power of Prime Minister to appoint Registrar.

192. Additional duties of Registrar.

193. Powers of Registrar to investigate affairs of

partnership.

403 to 423

194. Inspection, etc., of documents kept by Registrar.

195. Power of Minister to make regulations

First Schedule

Regulations for management of a limited

liability company

First Schedule

Second Schedule Matters to be set out in a prospectus and

reports to be set out therein

Second Schedule

Third Schedule

General provisions as to balance sheet and

profit and loss account

168, Third Schedule

Fourth Schedule

Contents and form of annual return

Seventh Schedule

Articles of

Marginal note for the article in the Commercial

Articles of Act

Partnerships (Special Provisions) Act, 1994

Commercial

Partnerships

(Special

Provisions)

Act, 1994

Short title

-

Other enactments

-

Interpretation

Investment Companies with variable

share capital

Name of company

70 (3) and (6)

C OM PA N I E S

Accounts of investment company with

variable share capital

Trustees and nominees

Share Capital in a convertible currency

186, 187

Power to make regulations

-

Schedule - Accounts and Director’s report

of an investment company with

variable share capital

Fifth Schedule

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 13 How a partnership is constituted. — COMPANIES ACT Open official source

A partnership shall not be validly constituted unless a deed

of partnership is entered into and signed and a certificate of

registration is issued under this Act in respect thereof.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 14 Contents of deed of partnership. — COMPANIES ACT Open official source

(1) The deed of partnership shall state

(a) the name and residence of each of the partners;

(b) the partnership-name;

(c) the registered office in Malta of the partnership;

(d) the objects of the partnership, that is to say, whether

the objects are trade in general or a particular branch

of trade, and in the latter case, the nature of the trade;

(e) the contribution of each of the partners, specifying the

value of the respective contribution of every partner;

(f)

the period if any fixed for the duration of the

partnership.

(2) The exclusion or omission of any matter from the objects

stated in the deed of partnership may not be set up against third

parties.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 15 Registration of deed of partnership. — COMPANIES ACT Open official source

(1) The deed of partnership shall be delivered for

registration to the Registrar who, being satisfied that it complies

with the requirements of article 14 and of sub-article (2), shall

register it.

(2) Where the deed of partnership is a public deed or a private

writing enrolled in the records of a notary public, an authentic copy

thereof shall be delivered in lieu of the original.

(3) The aforesaid delivery shall be made by any one of the

partners or his authorised agent.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 16 Duty of Registrar and effects of registration. — COMPANIES ACT Open official source

(1) On the registration of the deed of partnership the

Registrar shall certify under his hand that the partnership is

registered and the partnership shall come into existence and shall

be authorised to commence business under the partnership name as

from the date of the certificate

Provided that, if registration is obtained before the date

fixed in the deed of partnership for the commencement of the

partnership, the certificate shall indicate such date, and the

partnership shall come into existence and shall be authorised to

commence business as from such later date.

(2) A certificate of registration given in respect of a partnership

is conclusive evidence that the requirements of this Act in respect

of registration and of matters precedent and incidental to it have

been complied with and that the partnership is duly registered,

under this Act.

(3) The registration of a partnership by the Registrar under this

article shall be without prejudice to any other licence or other

authorisation as may be required in respect of the activities to be

carried on by the partnership under any other law.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 17 Where certificate of registration is not issued. — COMPANIES ACT Open official source

Unless and until a certificate of registration is issued under

this Act in respect of a partnership or until the date indicated in a

certificate of registration as the date on which a partnership shall

come into existence -

(a) any two or more persons carrying on business under a

name falsely implying the existence of a partnership

shall have, as against one another and limitedly to

property acquired from such business, such rights only

as are by law conferred on joint owners;

(b) any obligation contracted in favour of third parties in

good faith under a name falsely implying the existence

of a partnership shall be jointly and severally binding

on those persons, who, if a certificate of registration

had been issued, would have been partners carrying on

business under that name.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 18 Person holding himself out to be a partner. — COMPANIES ACT Open official source

(1) A person who holds himself out as being a partner

shall be held liable unlimitedly and jointly and severally with the

partners for all the obligations contracted by the partnership.

(2) The inclusion in the partnership-name of the name of a

person who is not a partner shall be taken into account by the court

in determining whether such person is holding himself out as being

a partner.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 19 Changes in deed of partnership. — COMPANIES ACT Open official source

(1) Every change relating to the administration or the

representation of a partnership, the dissolution of a partnership

before the period, if any, fixed for its duration, any extension of the

said period not expressly provided for in the deed of partnership

and generally any alteration or addition to the deed of partnership

shall be made in writing and duly signed by the partners authorised

to make that change and, subject to the provisions of article 21,

shall not take effect unless and until the relative instrument or,

where such instrument is a public deed or a private writing enrolled

in the records of a notary public, an authentic copy thereof is

delivered to the Registrar for registration and is registered by him.

In the case of a change relating to the administration or the

representation of a partnership, the relative instrument shall specify

the name and residence of the person or persons entrusted with the

said administration or representation

Provided that notwithstanding the provisions of this sub-

article, where the alteration or addition consists in an increase in

the contributions by a partner or a contribution by a new partner,

such alteration or addition shall take effect immediately upon the

receipt by the partnership of the contribution and without the need

of an amendment to the partnership deed

Provided further that the partner or partners having the

administration or the representation of the partnership shall, within

three (3) months from the end of the calendar year in which any

such increase or new contributions are effected, deliver to the

Registrar for registration a resolution of the partners confirming

that the contributions have been received by the partnership during

the preceding calendar year

Provided further that if an increase in contributions has

occurred in the same calendar year as when any interests in the

partnership are to be assigned, the partner or partners having the

administration or representation of the partnership shall, prior to any

assignment of such interests in the partnership, deliver to the Registrar

for registration a resolution of the partners confirming the increase in

contributions made during that calendar year.

(2) Where the extension of the period, if any, fixed for the

duration of a partnership is expressly provided for in the deed of

partnership, the partner or partners having the administration or

representation of the partnership shall, notwithstanding that

provision in the deed, deliver a notice of extension of the period of

duration to the Registrar for registration and such extension shall

not take effect unless and until the said notice is delivered to the

Registrar and is registered by him.

(3) Where a partner ceases to be a partner, whether upon an

assignment of his interest, upon the demise of such partner, or

otherwise, or where a person whose name does not appear in the

deed of partnership or in any alteration or addition thereto becomes

a partner of an already existing partnership, the partner or partners

having the administration or the representation of the partnership

shall, within one month from the date when a partner ceases to be a

partner or when a person is appointed as a partner, as applicable,

deliver to the Registrar for registration a notice of the cessation or a

notice of appointment of a new partner, as the case may be, stating

the names, addresses and identification details of the person

ceasing to be a partner or the person being appointed a partner, as

applicable

Provided that any inter vivos assignment of interest in

whole or in part of any partner shall, unless otherwise provided in

the deed of partnership, require the prior consent in writing of all

the other partners, and no such consent shall be required for any

assignment causa mortis of a partner’s interests

Provided further that any creditor of the partnership whose

debt existed prior to the date of publication of the statement in

accordance with article 401(1)(e) relating to the notice specifying

the cessation of a partner, appointment of a partner, or assignment

of a partner’s interests, as referred to in this sub-article may object

thereto by sworn application, within the period of three months

from the said date of publication and, if he shows good cause, the

court shall order that the interests are re-transferred to the partner

who originally held such interests, other than a demised partner, or

allow the change in partners or the assignment of the interest of the

partners, as the case may be, on sufficient security being given by

the partnership

Provided further that if the court makes an order in

accordance with the second proviso for the interests to be re-

transferred to the partner who originally held such interests, any

obligations undertaken on behalf of the partnership by the partner

whose interests are to be re-transferred as aforesaid shall remain

legally binding on the partnership and the other partners, and if any

such partner with unlimited liability would have become personally

liable in terms of the Act for the obligations of the partnership, he

shall remain so l iable even after ceasing to be a p artner in

accordance with the court order.

(4) If default is made in complying with the provisions of sub-

article (3), the partner or partners having the administration or

representation of the partnership shall be liable to a penalty, and,

for every day during which the default continues, to a further

penalty.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 20 Where alteration consists in change of partnership- name. — COMPANIES ACT Open official source

Where the alteration to the deed of partnership consists in a

change of the partnership-name, the Registrar shall enter the new

name on the register in place of the former name and shall issue a

certificate of registration altered to meet the circumstances of the

case

Provided that the provisions of article 9 shall apply to the

registration of such new name.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 21 Reduction in contribution of a partner and dissolution of a partnership before period fixed for its duration. — COMPANIES ACT Open official source

(1) Any reduction in the contribution of a partner, other than

a contribution consisting in personal services, any dissolution of the

partnership on the grounds mentioned in article 35(b) or (f), any

reduction of the term of duration, if any, of the partnership shall not

come into effect until three (3) months from the date of publication of

the statement in accordance with article 401(1)(e) relating to the

instrument effecting such reduction or dissolution.

(2) Any creditor of the partnership whose debt existed prior to

the publication referred to in sub-article (1) may object thereto by

sworn application, within the period of three months as aforesaid

and, if he shows good cause why it should not take effect, the court

shall either uphold the objection or allow the reduction of the

contribution or the dissolution of the partnership or a reduction of

the term of duration, if any, or the assignment of the interest of the

partner, as the case may be, on sufficient security being given by

the partnership.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 22 Right of creditors of a partner to oppose extension of duration of a partnership. — COMPANIES ACT Open official source

(1) Where the duration of a partnership is extended

beyond the period, if any, in the deed of partnership, the separate

creditor of a partner may object to such extension by sworn

a p p l i ca t i o n f i l e d w i t h i n t h r e e m o n t h s f r o m t h e d a t e o f t h e

publication of the statement in accordance with article 401(1)(e)

relating to the instrument effecting such extension and, upon good

cause being shown, the court shall direct the partnership to

liquidate such partner ’s interest in the partnership within three

months of the judgment.

(2) The provisions of sub-article (1) shall apply whether any

extension of the period fixed for the duration of the partnership is

or is not expressly provided for in the deed of partnership.

(3) A separate creditor of a partner may only object in

pursuance of this article if his debt existed prior to the publication

of the statement referred to in sub-article (1).

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 23 Duties of Registrar of Courts. — COMPANIES ACT Open official source

The Registrar of Courts shall, without delay, cause a copy

of any sworn application filed under articles 21 and 22 and of any

judgment given thereon to be served on the Registrar for

registration.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 24 How deed of partnership may be altered.. — COMPANIES ACT Open official source

Unless otherwise provided in the deed of partnership, any

alteration or addition thereto may only be made with the unanimous

consent of the partners.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 25 Administration and representation of a partnership and how partnership may be bound. — COMPANIES ACT Open official source

(1) In so far as the deed of partnership does not otherwise

provide, the administration and representation of the partnership

shall vest in each of the partners severally.

(2) A partnership may not be bound in favour of third parties

except by a partner acting under the partnership-name and having

the representation of the partnership either by virtue of the deed of

partnership or by operation of law.

(3) Where any such partner has acted as aforesaid, the

partnership shall be bound even though it derives no benefit.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 26 Keeping of accounting records. — COMPANIES ACT Open official source

(1) Notwithstanding the provisions of article 26 of the

Commercial Code, the accounting records of the partnership shall

be kept for a period of ten years

Provided that where the accounting records are kept in a

bound or unified form, the ten years shall commence to run from

the date of the last entry made therein.

(2) If default is made in complying with the requirements of

sub-article (1), every partner who is in default shall be liable to a

penalty.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 27 New partners. — COMPANIES ACT Open official source

(1) Where a person becomes a partner of an already

existing partnership, he shall thereby become liable for all the

obligations of the partnership, even if incurred before the date at

which he becomes a partner.

(2) Any agreement to the contrary shall be of no effect with

regard to third parties.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 28 Distribution of profits. — COMPANIES ACT Open official source

A partnership shall not distribute profits until it has made

good all losses.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 29 Rights of creditors of a partner. — COMPANIES ACT Open official source

The separate creditors of a partner may enforce their rights,

during the continuance of the partnership, on the share of the

profits if due to their debtor and, on the dissolution of the

partnership, on such portion of the assets of the partnership as is

due to their debtor on the partnership being wound up.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 30 Partner may not compete with partnership. — COMPANIES ACT Open official source

(1) A partner shall not, in competition with the partnership

and without the express consent of the other partners, carry on

business on his own account or on account of others or be a partner

with unlimited liability in another partnership.

(2) If a partner acts in contravention of the provisions of sub-

article (1), the partnership may, at its option, either take action for

damages and interest against the offending partner or demand

payment of any profit made by him in violation of the aforesaid

prohibition.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 31 Death of a partner. — COMPANIES ACT Open official source

(1) Saving any provision to the contrary in the deed of

partnership, in the event of death of one of the partners the

surviving partners shall liquidate the deceased partner’s interest in

the partnership in favour of his heirs, unless the surviving partners

unanimously elect either to dissolve the partnership or to continue

the partnership with the heirs, if, in the latter case, such heirs

accept

Provided that where not all the heirs are in agreement, the

partnership may continue with those who so elect as long as the

dissenting heirs’ interest in the partnership is liquidated in their

favour.

(2) Where the deceased partner has bequeathed his interest by

legacy, the provisions of sub-article (1) shall apply as though

references to heirs were references to the legatees of such interest.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 32 Expulsion of a partner. — COMPANIES ACT Open official source

(1) A partner may be expelled from the partnership by a

decision of the majority in number of the other partners unless a

higher majority is required by the partnership deed -

(a) if he does not make his contribution in accordance

with the partnership deed;

(b) if he commits a serious breach of duty as a partner;

(c) if he contravenes the provisions of article 30(1);

(d) if he is interdicted or incapacitated;

(e) in such other cases for which provision is made in the

deed of partnership.

(2) Any decision taken as aforesaid shall be notified, together

with the reasons therefor, by judicial act served on the expelled

partner, and shall not take effect until the lapse of fourteen days

from such notification.

(3) The expelled partner may, by sworn application filed within

fourteen days from the notification as aforesaid, object to the

decision and the court shall have power to stay the execution of the

said decision pending its judgment.

(4) Where the partnership consists of two partners only, the

expulsion of a partner may only be ordered by the court at the suit

of the other partner.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 33 Discontinuation of membership. — COMPANIES ACT Open official source

A partner shall not be entitled to continue as a partner if -

(a) he is adjudged bankrupt; or

(b) his interest in the partnership has been liquidated

under the provisions of article 22.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 34 Rights of persons ceasing to be partners. — COMPANIES ACT Open official source

(1) A partner who is expelled or who by virtue of the

immediately preceding article is not entitled to continue as partner

s h a l l h av e t h e r i g h t t o h a v e h i s i n t e r e s t i n t h e p a r t n e r s h i p

liquidated.

(2) There shall be included in the liquidation of the interest of a

partner who is expelled, or who by virtue of the immediately

preceding article is not entitled to continue as a partner, a pro rata

share of the profits or losses on all work in progress up to the date

of the expulsion.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 35 Dissolution of partnerships en nom collectif. — COMPANIES ACT Open official source

A partnership en nom collectif is dissolved -

(a) where the period, if any, fixed for its duration expires;

(b) if, subject to the provisions of article 21, all the

partners so agree;

(c) if the partnership is adjudged bankrupt;

(d) if in the opinion of the Court there exist grounds of

sufficient gravity to warrant dissolution;

(e) if the number of partners is reduced below two and

remains so reduced for more than six months;

(f)

subject to the provisions of article 21, in such other

cases for which provision is made in the deed of

partnership.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 36 Notice of dissolution. — COMPANIES ACT Open official source

(1) On the dissolution of a partnership, and in no case later

than fourteen days after such dissolution, the partners having the

administration or the representation thereof shall deliver to the

Registrar for registration a notice of the dissolution

Provided that, where a partnership is adjudged bankrupt or

dissolved by order of the court, notice of the dissolution shall be

given as aforesaid by the Registrar of Courts.

(2) The following provisions of this Part shall apply to the

dissolution of a partnership except where the partnership is

adjudged bankrupt, in which case the provisions of the Commercial

Code relating to bankruptcy shall apply.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 37 How a partnership en nom collectif may be wound up. — COMPANIES ACT Open official source

(1) Where the manner in which the partnership is to be

wound up is not provided for in the deed of partnership or is not

determined by agreement between the partners, the partnership

shall be wound up by one or more liquidators.

(2) If the partners do not agree as to the person who is to be

appointed liquidator, the appointment shall be made by the court,

on the application of any partner, creditor of the partnership or the

Registrar.

(3) The liquidator shall, within fourteen days after his

appointment, deliver to the Registrar for registration a notice of his

appointment stating his name and residence.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 38 Power to remove liquidator. — COMPANIES ACT Open official source

(1) A liquidator, whether appointed by the partners or by

the court, may be removed from office either by the partners, if

they so agree, or by order of the court, on a demand by sworn

application made by any of the partners, if the court is satisfied that

there exist sufficient grounds to warrant his removal.

(2) Where the office of a liquidator becomes vacant, the

provisions of article 37(2) shall apply.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 39 Remuneration of liquidator. — COMPANIES ACT Open official source

The remuneration of the liquidator may be fixed by

agreement between the partners and the liquidator, failing which it

shall be fixed by the court.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 40 Costs of winding up payable in priority to all other claims. — COMPANIES ACT Open official source

All costs, charges and expenses properly incurred in the

winding up, including the remuneration of the liquidator, shall be

payable out of the assets of the partnership in priority to all other

claims.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 41 Penalty. — COMPANIES ACT Open official source

If default is made in complying with any of the

requirements of article 36 and of article 37(3), every partner or

liquidator, as the case may be, who is in default, shall be liable to a

penalty and, for every day during which the default continues, to a

further penalty.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 42 Powers until provision is made for winding up. — COMPANIES ACT Open official source

Until such time as provision is made for the winding up of

the partnership, only such acts as are of ordinary administration

may be performed.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 43 Duties of partners vested with administration. — COMPANIES ACT Open official source

(1) Where a liquidator is appointed, the partners vested

with the administration of the partnership shall -

(a) deliver to the liquidator all the assets and all the

accounting records and other documents of the

partnership and shall draw up accounts relating to their

administration for the period since the preceding

accounts; and

(b) together with the liquidator, draw up a balance sheet

showing the state of affairs of the partnership as at the

date of the dissolution.

(2) Subject to the provisions of sub-article (1), on the

appointment of a liquidator all the powers of administration or

representation of the partnership vested in any of the partners shall

cease.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 44 Powers of liquidators. — COMPANIES ACT Open official source

(1) The liquidator shall represent the partnership and shall

have power to perform all acts conducive and ancillary to the

winding up of the affairs of the partnership

Provided that he shall not refer any matter to arbitration or

make any compromise unless so authorised in writing by the

partners.

(2)

The liquidator shall not undertake any new transaction.

(3) Where more than one liquidator is appointed, they shall act

jointly and shall be jointly and severally liable for their acts, unless

the partners have otherwise provided.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 45 Liquidator not to distribute assets before paying debts. — COMPANIES ACT Open official source

(1) The liquidator shall not distribute any assets of the

partn ership amon g th e part ners unless either the debts and

liabilities of the partnership have been paid or sufficient funds have

been set aside for the payment thereof.

(2) Where the assets of the partnership are insufficient to meet

its liabilities, the liquidator may demand from the partners payment

of the contribution, if any, due by them, irrespective of the date

when it falls due, and, if necessary, the sums required for the

payment of the aforesaid liabilities in the proportion in which the

liabilities of the partnership are to be borne by the partners.

(3) The liquidator may furthermore demand from the partners

payment of the contribution, if any, due by them or any part of it,

irrespective of the date when it falls due, for the purpose of

adjusting the rights of the partners among themselves.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 46 Duty of liquidator to give information, to render account and prepare scheme of distribution. — COMPANIES ACT Open official source

(1) The liquidator shall, at the request of any of the

partners, inform the partners as to the state and progress of the

liquidation.

(2) As soon as the affairs of the partnership are wound up, the

liquidator shall render an account of the winding up and of his

receipts and payments and draw up a scheme of distribution.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 47 Rules applicable to distribution of assets. — COMPANIES ACT Open official source

In the distribution of the assets of a partnership the

following provisions shall apply, unless otherwise provided in the

deed of partnership, that is to say -

(a) where a thing has been contributed in usufruct or

enjoyment, it shall be restored to the partner

contributing it and the partnership shall be held liable

in damages if the thing has perished or deteriorated for

any cause attributable to any of the partners, saving the

right of the partnership to the reimbursement of any

sums so paid against the partner who is at fault;

(b) the assets of the partnership shall first be applied in

repayment of the contributions of the partners and any

balance shall be distributed among the partners in

proportion to their share in the profits of the

partnership;

(c) where it has been agreed that the distribution of the

assets shall be made in kind, the provisions governing

partition of common property shall apply.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 48 Approval of accounts and scheme of distribution. — COMPANIES ACT Open official source

(1) The liquidator shall by judicial act serve on each of the

partners a copy of the accounts and of the scheme of distribution

mentioned in article 46(2).

(2) The accounts and the scheme of distribution shall be

deemed to have been approved by all the partners if no objection

thereto is lodged by sworn application by any of the partners within

three months of the service of the judicial act referred to in sub-

article (1).

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 49 Striking of name of partnership off register. — COMPANIES ACT Open official source

(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.

(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.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 50 Preservation of accounting records and documents after dissolution. — COMPANIES ACT Open official source

(1) The accounting records and the documents of the

partnership shall be kept by the liquidator, if any, or by the person

elected for that purpose by the majority of the partners and shall be

so kept for a period of ten years from the date at which the name of

the partnership was struck off the register. The election of such

person shall take place within fourteen days from the registration of

the notice referred to in article 49 and shall not be effected until

such person has signified his acceptance in writing to the partners

within fourteen days from his election

Provided that where there is no liquidator and the partners

fail to elect such person or where such person refuses to accept his

election, the accounting records and documents shall be delivered

to the Registrar within fourteen days of the non-acceptance or

failure to elect as the case may be, and the Registrar shall keep such

records for the said period of ten years.

(2) Where a person has been elected to keep the accounting

records and the documents of the partnership, or where the partners

have failed to elect such a person, the partners shall inform the

Registrar accordingly within fourteen days of the date when the

election becomes effective or from the failure to elect within the

prescribed period, as the case may be, and in default, the partners

shall be liable to a penalty.

(3) If the liquidator or the person elected by the partners to

keep the accounting records and documents of the partnership fails

to keep them for the period prescribed by sub-article (1), he shall

be liable to a penalty.

(4) If the liquidator or the person elected by the partners to

keep the accounting records and documents of the partnership dies,

his heirs shall be obliged to deliver the said accounting records and

documents to the Registrar within six months and the Registrar

shall keep them for the remainder of the period prescribed by sub-

article (1).

(5) The heirs referred to in sub-article (4) shall be liable to a

penalty if they do not comply with the provisions of that sub-

article.

PART IV - PARTNERSHIP EN COMMANDITE

OR LIMITED PARTNERSHIP

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 51 Definition. — COMPANIES ACT Open official source

A partnership en commandite or limited partnership

operates under a partnership-name and has its obligations

guaranteed by the unlimited and joint and several liability of one or

more partners, called general partners, and by the liability, limited

to the amount, if any, unpaid on the contribution, of one or more

partners, called limited partners

Provided that where, and for as long as, none of the general

partners is either an individual or a body corporate which has its

obligations guaranteed by the unlimited and joint and several

liability of one or more of its members, the provisions of article

51A shall also apply to that partnership en commandite or limited

partnership.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 51A — COMPANIES ACT Open official source

(1) The provisions of this article shall apply to a

partnership en commandite or limited partnership where, and for as

long as, none of the general partners is either an individual or a

body corporate which has its obligations guaranteed by the

unlimited and joint and several liability of one or more of its

members.

(2) A partnership en commandite or limited partnership which,

either on formation or at any time thereafter, becomes subject to the

provisions of this article shall, within fourteen days, deliver to the

Registrar for registration a notice specifying that it is subject to this

article and that it shall comply with the provisions laid down in this

article.

(3) When a partnership en commandite or limited partnership

ceases to be subject to the provisions of this article, the partnership

shall, within fourteen days of such cessation, deliver to the

Registrar for registration a notice specifying that it is no longer

subject to this article and that the provisions of this article shall not

apply to such partnership as from the date that it has ceased to be so

subject.

(4) Notwithstanding any other penalties imposed by this Act,

any partner of the partnership en commandite or limited partnership

who fails to comply with the provisions of sub-articles (2) and (3)

shall be liable to a penalty, and, for every day during which the

default continued, to a further penalty.

(5) The provisions of Chapters IX and X of Part V of this Act,

other than the provisions of article 184, shall mutatis mutandis

apply to a partnership en commandite or limited partnership subject

to this article for as long as such partnership continues to be so

subject.

(6) Where a partnership en commandite or limited partnership

subject to the provisions of this article is dissolved, a liquidator

shall be appointed and the provisions of articles 305 and 306 shall

mutatis mutandis apply. The provisions of article 37(1) and article

48 shall not apply.

(7)

(a) As soon as the affairs of the partnership en commandite

or limited partnership are fully wound up, the

liquidator shall make an account of the winding up,

showing how the winding up has been conducted and

how the property of such partnership has been disposed

of, and shall draw up a scheme of distribution and he

shall cause the account to be audited by one or more

auditors appointed by a decision of the general

partners. The liquidator shall serve on each of the

partners a copy of the accounts and of the scheme of

distribution, if any, together with the auditors’ report

and any explanation thereof.

(b) The accounts and the scheme of distribution shall be

deemed to have been approved by all the partners if no

objection thereto is lodged by application by any of the

partners within three months of the service referred to

in paragraph (a).

(c) The provisions of article 153 shall apply to an auditor

appointed in terms of paragraph (a). Such auditor shall

not be a person who has held the office of auditor of

the partnership en commandite or limited partnership

at any time during the last three years immediately

preceding the date of dissolution.

(8) The Minister may make regulations for the better carrying

out of any of the provisions of this article; and without prejudice to

the generality of the foregoing may, by such regulations, in

particular exempt or provide for the exemption of such partnership

en commandite or limited partnership from any of the provisions of

this Act or of any other law in force, subject to such modifications,

variations and conditions that may be specified thereunder.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 52 Applicability of provisions governing partnerships en nom collectif. — COMPANIES ACT Open official source

The provisions governing partnerships en nom collectif

shall apply to partnerships en commandite or limited partnership

except insofar as they are inconsistent with the provisions of this Part

and, without prejudice to the foregoing

(a) the notice referred to in article 19(3) in respect of the

cessation of a partner, or the appointment of a new

partner, shall only be published by the Registrar

limitedly in respect of any general partner with

unlimited liability and not in respect of limited

partners; and

(b) the second and third provisos to article 19(3) shall not

be applicable where there is a cessation of a limited

partner or the appointment of a new limited partner.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 53 Partnership-name. — COMPANIES ACT Open official source

(1) A person, including a limited partner, who holds

h im se l f o u t a s b e i n g a g e n e r a l p a r t n e r s h a l l b e h e l d l i a b l e

unlimitedly and jointly and severally with the general partners for

all the obligations contracted by the partnership.

(2) The inclusion in the partnership-name of the name of a

person who is not a general partner shall be taken into account by

the court in determining whether such person is holding himself out

as being a general partner.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 54 Contribution of limited partner not to include personal services. — COMPANIES ACT Open official source

The contribution of a limited partner shall not include

personal services.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 55 Contents of deed of partnership. — COMPANIES ACT Open official source

The deed of partnership of a partnership en commandite or

limited partnership, in addition to the particulars prescribed by

article 14, shall specify which of the partners are general partners

a n d w h i c h o f t h e m a r e l i m i t e d p ar t n e r s , a n d i n d e f a u l t t he

partnership shall resolve itself into a partnership en nom collectif.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 56 Rights and duties of partners. — COMPANIES ACT Open official source

(1) Unless otherwise provided in the other provisions of

this Part the rights and duties of the general partners shall be the

same as those of partners in a partnership en nom collectif.

(2) Unless otherwise provided in the deed of partnership but

subject to the provisions of this Part, limited partners shall have

only the rights and duties provided by this Part.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 57 Administration and representation. — COMPANIES ACT Open official source

The administration and representation of the partnership en

commandite or limited partnership shall vest in the general

partners, and unless the deed of partnership otherwise provides,

such administration and representation shall vest in each of the

general partners severally.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 58 Appointment of partners to administer and represent partnerships en commandite or limited partnership. — COMPANIES ACT Open official source

The general partners shall by unanimous decision have the

right to appoint the partners from amongst themselves who are to

administer and represent the partnership en commandite or limited

partnership and to dismiss from office the partners so appointed

Provided that the deed of partnership may provide that the

limited partners shall have the right to participate in the

appointment of general partners to, or the dismissal of general

partners from the office of administration and representation of the

partnership.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 59 Limited partner cannot take part in management of partnership en commandite or limited partnership. — COMPANIES ACT Open official source

(1) A limited partner shall not perform any act of

administration nor transact business on behalf of the partnership en

commandite or limited partnership except by virtue of a power of

attorney given for specified acts or transactions.

(2) If a limited partner acts in contravention of the aforesaid

prohibition, he shall be bound, in regard to third parties,

unlimitedly and jointly and severally with the general partners for

all the obligations of the partnership en commandite or limited

partnership and shall moreover be liable to be expelled from the

partnership in accordance with the provisions of article 32

Provided that a limited partner acting in contravention of

the prohibition contained in sub-article (1) shall not be expelled

from the partnership if he proves that he had been acting on the

instructions of the general partners.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 60 Communication of yearly accounts to limited partners. — COMPANIES ACT Open official source

At the end of each accounting period the balance sheet and

profit and loss account of the partnership en commandite or limited

partnership shall be communicated to the limited partners, who, for

the purpose of ascertaining their correctness, shall have a right of

access to the accounting records and other documents of the

partnership.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 61 Non-applicability of certain articles to limited partners. — COMPANIES ACT Open official source

The provisions of article 30 and of article 32(1)(c) shall not

apply to a limited partner.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 62 Limited partner not bound to restore profits received in good faith. — COMPANIES ACT Open official source

Notwithstanding the provisions of article 28, a limited

partner shall in no case be bound to restore profits received in good

faith.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 63 Assignment of interest by limited partner and rights of limited partners. — COMPANIES ACT Open official source

(1) Unless the deed of partnership otherwise provides, a

limited partner may assign his interest in the partnership en

commandite or limited partnership

Provided that, if the contribution of a limited partner is not

fully paid up, any assignment of his interest in the partnership shall

not have effect, with regard to the partnership, unless it is made

with the consent of all the general partners.

(2) Unless the deed of partnership otherwise provides, any

changes in the deed of partnership which deprive limited partners

of any of their rights shall require the unanimous consent of all the

general partners and of all the limited partners.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 64 Death or expulsion of limited partner. — COMPANIES ACT Open official source

(1) Unless the deed of partnership otherwise provides, in

t h e e v e n t o f d e a t h o f a l i m i t e d p a r t n e r, t h e p a r t n e r sh i p e n

commandite or limited partnership shall continue with his heirs.

(2) Notwithstanding the provisions of article 32, interdiction or

incapacitation shall not be grounds for expulsion of a limited

partner.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 65 Dissolution of partnership en commandite or limited partnership. — COMPANIES ACT Open official source

(1) A partnership en commandite or limited partnership,

besides being determinable for any of the causes mentioned in

article 35, shall be dissolved if no general partner or no limited

partner remains, unless, within six months, the partner who has

ceased to be a partner shall have been substituted.

(2) Where no general partner remains, the limited partners may,

for the said period of six months, appoint one of their number for

the performance of acts of ordinary administration.

(3) A limited partner appointed as aforesaid shall not be subject

to the provisions of article 59.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 66 Division of capital into shares. — COMPANIES ACT Open official source

(1) Without prejudice to the foregoing provisions of this

Part, the capital of a partnership en commandite or lim ited

partnership may be divided into shares.

(2) The provisions of this Act relating to shares in a company

other than the provisions of article 72 shall apply to the shares in a

partnership en commandite or limited partnership in so far as they

are not inconsistent with the foregoing provisions of this Part.

(3) The provisions of Chapters IX and X of Part V of this Act,

other than for the provisions of article 184, shall apply to a

partnership en commandite or limited partnership, the capital of

which is divided into shares.

(4) It shall be the duty of the partner vested with the

administration or representation of a partnership en commandite or

limited partnership, the capital of which is divided into shares, to

deliver to the Registrar for registration the instrument or a copy

thereof as required by article 19 altering or adding to the deed of

partnership within fourteen days from the date of the said alteration

or addition, together with a printed copy of the deed of partnership,

as am ended; and any previous amended text of the deed of

partnership may be discarded by the Registrar when a subsequent

amended text is delivered to him for registration

Provided that in the event of a discrepancy between the text

of any amended deed of partnership and the text of the original

deed of partnership registered in accordance with the provisions of

article 16, the latter text together with any instruments registered in

accordance with the provisions of sub-article (4), shall prevail.

(5) The provisions of article 78, of article 137(4), (5) and (6)

and of article 142(2) shall apply to a partnership en commandite or

limited partnership, the capital of which is divided into shares, with

the substitution of references to partners vested with administration

or representation for references to directors, officials or the Board

of directors; with the substitution of references to partnership en

commandite or limited partnership, the capital of which is divided

into shares, for references to company; with the substitution of

references to deed of partnership for references to memorandum or

memorandum and articles; with the substitution of partners for

references to shareholders; and, with regard to article 137(5), with

the substitution of the term "a decision of the partners" for the term

"any resolution of the general meeting or from a decision of the

Board of directors".

(6) If default is made in complying with the provisions of sub-

article (4 ), every p artner vest ed wit h the adm ini stration or

representation of a partnership en commandite or limited

partnership the capital of which is divided into shares who is in

default shall be liable to a penalty, and for every day during which

the default continues, to a further penalty.

(7) A partnership en commandite or limited partnership, the

capital of which is not divided into shares, may change its status to

a partnership en commandite or limited partnership, the capital of

which is divided into shares, by a decision taken in accordance with

the provisions of the deed of partnership, or, in the absence of any

such provision, with the consent of all the partners, both general

and limited

Provided that where one or more limited partners, holding

in the aggregate not more than one-fourth of the total contribution

of the limited partners, have not given their consent the partnership

en commandite or limited partnership may nevertheless proceed

with the change of its status, but it shall be required, for the

purpose of such change, to liquidate and re-imburse to every

partner who has not given his consent, if he so requests, his interest

in the partnership en commandite or limited partnership on such

terms as may be agreed, or as the court, on a demand of either the

partnership or the limited partner, may deem fit to order.

(8) A partnership en commandite or limited partnership, the

capital of which is divided into shares, may change its status to a

partnership en commandite or limited partnership, the capital of

which is not divided into shares, by a decision taken in accordance

with the provisions of the deed of partnership or, in the absence of

any such provision, with the consent of all the partners, both

general and limited

Provided that where one or more limited partners, holding

in the aggregate not more than one-tenth of the share capital of the

partnership, have not given their consent, the partnership en

commandite or limited partnership may nevertheless proceed with

the change of its status, but it shall be required, for the purpose of

such change, to redeem the shares held by every partner in the

partnership en commandite or limited partnership who has not

given his consent, if he so requests, on such terms as may be agreed

or as the court on a demand of either the partnership or of the

limited partner may deem fit to order.

(9) It shall be the duty of the partner vested with the

administration or representation of a partnership en commandite or

limited partnership, which has decided to change its status in

accordance with sub-article (7), to deliver to the Registrar for

registration the instrument or a copy thereof as required by article

19, altering or adding to the deed of partnership together with a

printed copy of the deed of partnership as amended, and the

p r o v i s i o n s o f s u b - a r t i c l e (4 ) s h a l l t h e r e a f t e r a p p l y t o t h e

partnership.

(10) It shall be the duty of the partner vested with the

administration or representation of a partnership en commandite or

limited partnership which has decided to change its status in

accordance with sub-article (8), to deliver to the Registrar for

registration, the instrument or a copy thereof as required by article

19, altering or adding to the deed of partnership together with a

printed copy of the deed of partnership as amended, and the

provisions of sub-article (4) shall thereafter no longer apply to the

partnership.

(11) The change of status referred to in sub-article (7) or in sub-

article (8) shall not take effect unless and until it is registered as

required by sub-article (9) or by sub-article (10) respectively, of

this article.

(12) (a) Where a partnership en commandite or limited

partnership, the capital of which is divided into shares,

is dissolved and a liquidator has been appointed, as

soon as the affairs of the partnership are fully wound

up, the liquidator shall make an account of the winding

up, showing how the winding up has been conducted

and how the property of the partnership en commandite

or limited partnership has been disposed of, and shall

draw up a scheme of distribution and he shall cause the

account to be audited by one or more auditors

appointed by a decision of the partners. The liquidator

shall by judicial act serve on each of the partners a

copy of the accounts and of the scheme of distribution,

if any, together with the auditors’ report and giving any

explanation thereof.

(b) The accounts and the scheme of distribution shall be

deemed to have been approved by all the partners if no

objection thereto is lodged by sworn application by any

of the partners within three months of the service of

the judicial act referred to in paragraph (a).

(c) The provisions of article 153 shall apply to an auditor

appointed in terms of paragraph (a). Such auditor shall

not be a person who has held the office of auditor of

the partnership en commandite or limited partnership at

any time during the last three years immediately

preceding the date of dissolution.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 66A Partnership en commandite or limited partnership. — COMPANIES ACT Open official source

(1) This article shall apply to a partnership en

commandite or limited partnership the capital of which may or may

not be divided into shares, which in the deed of partnership expressly

limits its object either to the collective investment of its funds in

securities and in other movable and immovable property, or in any of

them, with the aim of giving the partners the benefit of the results of

the management of its funds, and to matters ancillary or incidental

thereto, and which qualifies as a collective investment scheme and

is duly licensed, recognised, exempted or otherwise regulated in

terms of the Investment Services Act, or otherwise to any other

purpose as may be prescribed in the Tenth Schedule or as the Minister

may from time to time prescribe by regulations.

(2) A partnership en commandite or limited partnership within the

meaning of sub-article (1) shall be regulated by the provisions

contained in the Tenth Schedule and by any regulations made by the

Minister in terms of this article; the provisions of this Part of this Act,

other than this article, and articles 13 to 18, article 21 and Part III of

the Commercial Code, shall not apply to any such partnership except

and to the extent that they are expressly made applicable by means of

the said Schedule or by means of any such regulations.

(3) The Minister may make regulations for the better carrying

out of the provisions of this article and of any of the provisions of

the Tenth Schedule, and may, without prejudice to the generality of

the foregoing, by such regulations make provisions as to any of the

following matters

(a) the forms and returns to be used in respect of such

partnerships en commandite or limited partnerships

within the meaning of sub-article (1), for the purposes

of this Act or such other purposes as may be

prescribed therein;

(b) the registration of such partnerships en commandite or

limited partnerships under this Act within the meaning

of sub-article (1) and any matters incidental thereto;

(c) the records and accounts to be kept by such

partnerships en commandite or limited partnerships

within the meaning of sub-article (1) and any matter

incidental thereto;

(d) the prescription of fees payable under this Act in

respect of such partnerships en commandite or limited

partnerships within the meaning of sub-article (1);

(e) the exemption of partnerships en commandite or

limited partnerships within the meaning of sub-article

(1) or any category thereof from any of the provisions

of the Tenth Schedule or of this Act or of any other law

which may otherwise be applicable thereto, as the case

may be, subject to such modifications, variations and

conditions as may be specified;

(f)

any other matters to be prescribed under this Act or the

Tenth Schedule in respect of such partnerships en

commandite or limited partnerships within the meaning

of sub-article (1), or any other matters to better regulate

the provisions of the Tenth Schedule in respect of such

partnerships en commandite or limited partnerships

within the meaning of sub-article (1) or any category

thereof.

PART V - LIMITED LIABILITY COMPANY

TITLE I - FORMATION AND FUNCTIONING OF

COMPANIES

Chapter I - Formation of a company and matters incidental

thereto

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 67 Definition. — COMPANIES ACT Open official source

A company is formed by means of a capital divided into

shares held by its members. The members’ liability is limited to the

amount, if any, unpaid on the shares respectively held by each of

them.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 68 How a company is constituted. — COMPANIES ACT Open official source

A company shall not be validly constituted under this Act

unless a memorandum of association is entered into and subscribed

by at least two persons, or in the case of a single member company

constituted in terms of article 212, by the single member, and a

certificate of registration is issued in respect thereof. Companies

formed and registered under the Ordinance shall comply with this

Act in accordance with the provisions of article 428.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 69 Contents of memorandum. — COMPANIES ACT Open official source

(1) The memorandum of every company shall state

(a) whether the company is a public company or a private

company;

(b) the name and residence of each of the subscribers

thereto;

(c) the name of the company;

(d) the registered office in Malta and the electronic mail

address of the company;

(e) the objects of the company;

(f)

the amount of share capital with which the company

proposes to be registered (hereinafter referred to as

"the authorised capital"), the division thereof into

shares of a fixed amount, the number of shares taken

up by each of the subscribers and the amount paid up

in respect of each share and, where the share capital is

divided into different classes of shares, the rights

attaching to the shares of each class;

(g) the number of the directors, the name and residence of

the first directors and, where any of the directors is a

body corporate, the name and registered or principal

office of the body corporate, the manner in which the

representation of the company is to be exercised, and

the name of the first person or persons vested with

such representation;

(h) the name and residence of the first company secretary

or secretaries, or where a company secretary is a body

corporate, the name, registration number and registered

office of the body corporate;

(i)

the period, if any, fixed for the duration of the

company.

(2) In the case of a public company, there shall be annexed to

the memorandum a document providing

(a) the total amount or an estimate of all the costs payable

by the company or chargeable to it by reason of its

formation up to the time it is authorised to commence

business, and of all the costs relating to transactions

leading to such authorisation; and

(b) a description of any special advantage granted prior to

the time the company is authorized to commence

business to anyone who has taken part in the formation

of the company or in transactions leading to such

authorisation

Provided that, where in accordance with the proviso to

article 77(1), a company is authorised to commence business at a

date later than the date of its registration, the said document shall

be delivered to the Registrar for registration within fourteen days

from the date the company is authorised to commence business.

(3) Companies formed and registered before the coming into

force of this sub-article shall comply with the provisions of sub-

article (1)(f) on the disclosure, in the memorandum of association

of the company, of the rights attaching to the shares of each

different class, within twelve months from the coming into force of

this sub-article

Provided that companies formed and registered before the

coming into force of this sub-article shall be deemed to satisfy the

requirements of sub-article (1)(f ) o n th e di s c l osu r e , in t he

memorandum of association, of the rights attaching to the shares of

each different class, if such provision or equivalent thereof is

already incorporated in the articles of association of the company.

(4) It shall be the duty of the directors and of the company

secretary to ensure that the registered electronic mail address of the

company, as included in the memorandum and registered with the

Registrar, is regularly monitored such that any electronic mail sent to it

by the Registrar is brought to the attention of an officer of the

company.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 70 Name of company. — COMPANIES ACT Open official source

(1) Subject to the provisions of sub-articles (3) to (6), a

public company may be designated by any name, but such name

must end with the words "public limited company" or their

abbreviation "p.l.c."

Provided that where the public company is a ‘societas

europaea’ in accordance with Council Regulation (EC) No 2157/

2001 of 8 October 2001 on the Statute for a European company, in lieu

of the words "public limited company" or their abbreviation "p.l.c.",

the name of the public company shall be preceded or followed by the

abbreviation "SE".

(2) Subject to the provisions of sub-articles (3) to (6), a private

company may be designated by any name, but such name shall end

with the words "private limited company" or the word "limited" or

its abbreviation "ltd.".

(3)

(a) Where a private company is an investment company

with variable share capital, the name of the company

shall be followed by the words "investment company

with variable share capital" or by "SICAV", followed

by the words "private limited company", "limited" or

its abbreviation.

(b) Where a public company is an investment company

with fixed share capital or an investment company

with variable share capital, the name of the company

shall be followed by the words "investment company

with fixed share capital" or "investment company with

variable share capital", as the case may be, followed

by the words "public limited company", or its

abbreviation. The words "investment company with

fixed share capital" may be replaced with the

abbreviation "INVCO" and the words "investment

company with variable share capital" may be replaced

with "SICAV".

(4)

A company shall not be registered by a name which -

(a) is the same as a name of another commercial

partnership or so nearly similar as in the opinion of the

Registrar it could create confusion; or

(b) is in the opinion of the Registrar offensive or

otherwise undesirable; or

(c) has been reserved for registration for another

commercial partnership by a notice in writing to the

Registrar given not more than three months before the

date of the second request

Provided that the Registrar shall notify any refusal under

th i s su b - a r t i c l e w i th o u t d e l a y to t h e p e r s o n r e q u e s t i n g t h e

registration

Provided further that in applying paragraph (b), the

Registrar shall have regard, inter alia, to the business or proposed

business of the company, to the protection of the names of persons

who are not connected in any way with the company, and, in the

case of a private company, to the names of the members.

(5) A company shall not be registered by a name which

includes the word "fiduciary", "nominee" or "trustee", or any

abbreviation, contraction or derivative thereof, unless such

company is authorised to act as a trustee in terms of the applicable

laws of Malta, or unless otherwise permitted to do so by the

relevant competent authority.

(6) A person or persons trading or carrying on business or other

activity -

(a) under a name or title which ends with the words

"public limited company" or "p.l.c." or "private limited

company" or "limited" or "ltd." or a contraction or

imitation thereof and which is not the name of a duly

registered company; or

(b) under a name or title which contains the words

"fiduciary", "nominee" or "trustee", or any

abbreviation, contraction or derivative thereof, which

is not the name of a company which is authorised to

use such name as provided in sub-article (5); or

(c) under a name or title which contains the words

"investment company with fixed share capital" or

"INVCO" or a contraction or imitation thereof when the

person or persons are not a public company which is

an investment company with fixed share capital; or

(d) under a name or title which contains the words

"investment company with variable share capital" or

"SICAV" or a contraction or imitation thereof when the

person or persons are not an investment company with

variable share capital,

shall be liable to a penalty, and, for every day during which the

default continues, to a further penalty.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 71 Objects of company. — COMPANIES ACT Open official source

The objects of a company may not be simply stated to be

any lawful purpose or trade in general.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 72 Minimum share capital. — COMPANIES ACT Open official source

(1) The authorised share capital of a company shall be -

not less than forty-six thousand and five hundred and

eighty-seven euro and forty-seven cents (46,587.47)

subscribed by at least two persons in the case of a

public company; or

not less than one thousand and one hundred and sixty-

four euro and sixty-nine cents (1,164.69) subscribed

by at least two persons in the case of a private

company.

(2) Where the authorised share capital is equal to the minimum

aforesaid, it shall be fully subscribed in the memorandum, and

where it exceeds such minimum, at least that minimum shall be

subscribed in the memorandum.

(3) In the case of a public company, not less than twenty-five

per cent, and in the case of a private company, not less than twenty

per cent, of the nominal value of each share taken up shall be paid

up on the signing of the memorandum.

(4) The ordinary shares of a company shall not be redeemable,

and every company shall at all times have ordinary shares.

(5) 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.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 73 Consideration for acquisition of shares. — COMPANIES ACT Open official source

(1) The consideration for the acquisition of shares in a

company whether on the original subscription or a subsequent

issue, may only consist of assets capable of economic assessment,

and furthermore, future personal services and in general any

undertakings to perform work or supply services may not be given

by way of consideration.

(2) Where, on original subscription, the shares are issued for a

consideration other than in cash, the full consideration shall be

transferred to the company within five years from the date the

company is authorised to commence business.

(3) Where shares are issued other than on original subscription

for a consideration other than in cash, the full consideration shall

be transferred within five years from the date of the decision to

issue the shares.

(4) A report on any consideration other than in cash shall be

drawn up before the company is registered or before the shares are

issued, as the case may be, by one or more experts who are

independent of the company and approved by the Registrar

Provided that when the said consideration does not exceed the

equivalent monetary value of fifty thousand euro (€50,000), a

director’s declaration shall suffice and such report shall not be

required. The said director’s declaration shall be delivered to the

Registrar for registration and the provisions of sub-article (6) shall

apply.

(5) The expert’s report shall contain at least a description of

each of the assets comprising the consideration as well as the

methods of valuation which have been used and shall state whether

the values arrived at by the application of these methods

correspond at least to the number and nominal value, and, where

applicable, to the premium on the shares to be issued for them.

(6) The report shall be delivered to the Registrar for

registration before the company is registered or before the shares

are issued, as the case may be; and, in default, the Registrar shall

accordingly refuse to register the company or the return of the

allotments of the shares so issued, and, in the latter case, the issue

shall be considered null and void.

(7) Where an amount standing to the credit of any of a

company’s reserve accounts or of its profit and loss account is

applied in paying up to any extent any shares allotted to members

of the company or any premiums on shares so allotted, the amount

applied shall not be considered as consideration other than in cash

for the purposes of this article.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 74 Transfer to company of non- cash asset in first two years. — COMPANIES ACT Open official source

(1) A company shall not acquire, within two years of its

authorisation to commence business, any asset belonging to a

person who subscribed the company’s memorandum or who is a

member of the company for a consideration which is equivalent to

at least one tenth of the issued capital of the company unless the

following conditions are satisfied

(a) the asset to be received by the company, and any

consideration other than cash to be given by the

company, shall have been valued by one or more

experts who are independent of the company and

approved by the Registrar;

(b) a report with respect to the matters specified in

paragraph (a) shall have been made to the company

during the six months immediately preceding the date

of the agreement;

(c) the terms of the agreement shall have been approved

by ordinary resolution; and

(d) not later than the giving of notice of the meeting at

which the resolution is proposed, copies of the

resolution and of the report shall have been circulated

to the members of the company entitled to receive

notice of the meeting and, if the person with whom the

agreement in question is proposed to be made is not

then a member of the company so entitled, to that

person.

(2) The report referred to in sub-article (1)(b) shall be delivered

to the Registrar for registration at the same time as it is circulated

in accordance with sub-article (1)(d). If the company fails to

comply with this sub-article, every officer of the company who is

in default shall be liable to a penalty.

(3) If a company enters into an agreement in contravention of

this article and either -

(a) the person with whom the company made the

agreement has not received the expert’s report required

for compliance with the conditions of this article; or

(b) there has been some other contravention of this article

which that person knew or ought to have known

amounted to a contravention,

the company shall be entitled to recover from that person any

consideration given by it under the agreement, or an amount equal

to the value of the consideration at the time of the agreement, and

the agreement, so far as not carried out, shall be void.

(4)

The provisions of this article shall not apply -

(a) where it is part of the company’s ordinary business to

acquire, or arrange for other persons to acquire, assets

of a particular description, to an agreement entered

into by the company in the ordinary course of its

business for the transfer of an asset of that description

to it or to such person, as the case may be; or

(b) to acquisitions made by the company at the instance or

under the supervision of the court; or

(c) to acquisitions made on a regulated market or on an

equivalent market in a non-Member State or non-EEA

State.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 75 Articles of association. — COMPANIES ACT Open official source

(1) There may be registered with the memorandum,

articles of association (hereinafter referred to as "articles") which

shall be si gned by t he su bscri bers to the m emoran dum and

prescribing regulations for the company.

(2) If articles are not registered, or, if articles are registered, in

so far as the articles do not exclude or modify the regulations

contained in the First Schedule, such regulations shall be the

regulations of the company in the same manner and to the same

extent as if they were contained in duly registered articles.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 76 Registration of memorandum and articles. — COMPANIES ACT Open official source

(1) The memorandum and articles, if any, shall be

delivered for registration to the Registrar who, being satisfied that

all the requirements of articles 68 to 73 and of articles 75 and 139

have been complied with, shall register them.

(2) Where the memorandum or the articles are drawn up in a

public deed or in a private writing enrolled in the records of a

notary public, an authentic copy thereof shall be delivered in lieu of

the original.

(3) The aforesaid delivery shall be made by any one of the

subscribers to the memorandum, or the authorised agent of such

subscriber.

(4) Notwithstanding the provisions of sub-article (1), and

without prejudice to the provisions of article 77(2), the

responsibility for ensuring that the articles of association, if any, of

a company, are correct, complete and in full compliance with this

Act and any other applicable law shall lie with the persons who

have entered into and subscribed to the memorandum of

association.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 77 Duty of Registrar and effects of registration. — COMPANIES ACT Open official source

(1) On the registration of the memorandum and articles, if

any, of a company, the Registrar shall certify under his hand that

the company is registered, and the company shall come into

existence and shall be authorised to commence business as from the

date of registration which date shall be indicated in the certificate

Provided that if registration is obtained before the date, if

any, fixed in the memorandum for the commencement of the

company, the certificate shall indicate such date and the company

shall come into existence and shall be authorised to commence

business as from such later date.

(2) A certificate of registration given in respect of a company

is conclusive evidence that the requirements of this Act in respect

of registration and of matters precedent and incidental to it have

been complied with and that the company is duly registered as a

public or private company under this Act.

(3)

The registration of a company by the Registrar under this

article shall be without prejudice to any other licence or other

authorisation as may be required in respect of the activities to be

carried on by the company under any other law.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 78 Where certificate of registration is not issued. — COMPANIES ACT Open official source

(1) All persons carrying on business or entering into

agreements in the name of or on behalf of a company in respect of

which a certificate of registration has not been issued under this

Act, or before the date indicated in the certificate of registration as

the date on which the company shall come into existence, shall,

unless otherwise agreed, be personally and jointly and severally

liable for their dealings with third parties entered into by them in

the aforementioned capacity.

(2) Failing agreement to the contrary, the persons referred to in

sub-article (1) shall have, as against one another and in respect of

the assets and liabilities arising out of the business carried on in the

company’s name or on its behalf, the rights and obligations of joint

owners.

(3) Notwithstanding the provisions of sub-article (1), the

dealings referred to in that sub-article shall, with respect to a third

party who has dealt in good faith with persons purporting to act in

the name of or on behalf of a company in respect of which a

certificate of registration has not been issued under this Act or

which has not yet come into existence, with effect from the date on

which the company shall come into existence, be treated as having

been undertaken by the company; provided that in such an event the

provisions of sub-article (1) shall not apply. The company shall be

entitled to be indemnified by the persons who had acted in its name

or on its behalf in respect of its liability under this sub-article

towards the said third party.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 79 Alterations and additions to memorandum and articles. — COMPANIES ACT Open official source

(1) A company may by extraordinary resolution alter or

add to its memorandum or articles

Provided that -

(i)

where the alteration consists in a change of the

registered office in Malta or of the electronic mail

address of the company of the company such

alteration may be effected by a resolution of the

directors; and

(ii)

where the alteration consists in the conversion of

any shares into stock or in the reconversion of

that stock into shares, such alteration may only

be made if the shares to be converted are paid up

shares and if the stock is reconverted into paid

up shares, but, if the company is so authorised

by its memorandum or articles, it may by

ordinary resolution convert any paid up shares

into stock and reconvert that stock into paid up

shares of any denomination.

(2) It shall be the duty of the directors and of the company

secretary to deliver to the Registrar for registration a copy of any

resolution as aforesaid within fourteen days after the date of the

resolution, together with a revised and updated copy of the

memorandum, and of the articles, if any, as amended by the said

resolution and incorporating all the changes effected to date

relating to the directors, company secretary, the representation of

the company, change in the registered office or electronic mail address

of the company, or any transfer or transmission of shares or any

allotment of shares. Where a copy of the memorandum and of the

articles of association, if any, is delivered to the Registrar by electronic

means, such electronic copy shall be authenticated in accordance with

article 82. Any previous amended text of the memorandum and

ar t i c l es , i f a n y, m a y b e d i s ca r d ed b y t h e R eg i st r ar w h e n a

subsequent amended text is delivered to him for registration

Provided that in the event of a discrepancy between the text

of any amended memorandum and articles, if any, and the text of

the original memorandum and articles, if any, registered in

accordance with the provisions of article 76, the latter text together

with resolutions registered in accordance with the provisions of this

sub-article shall prevail

Provided further that notwithstanding the provisions of this

sub-article, where the alteration consists in a change in the registered

office in Malta or the electronic mail address of the company, the

directors or company secretary shall send to the Registrar for

registration a return of any change in the registered office or the

electronic mail address, specifying the date of the change, together

with the new registered office or electronic mail address, within

fourteen days from the occurrence.

Notwithstanding the provisions of sub-article (2), where the

alteration consists in a change in the registered office in Malta of

the company, the directors or company secretary shall send to the

Registrar for registration a return of any change in the registered

office, specifying the date of the change, together with the new

registered office, within fourteen days from the happening thereof.

(3) Any alteration or addition to the memorandum or articles of

a company shall not take effect, unless and until it is registered as

provided in sub-article (2).

(4) The responsibility for ensuring that any proposed

amendments to the articles of association, if any, of a company, are

correct, complete and in full compliance with this Act and any

other applicable law shall lie with the directors of the said company

(5) If default is made in complying with the provisions of sub-

article (2), every officer of the company who is in default shall be

liable to a penalty, and, for every day during which the default

continues, to a further penalty.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 80 Change of name of company. — COMPANIES ACT Open official source

Where a company changes its name under the provisions of

article 79, the Registrar shall enter the new name on the register in

place of the former name and shall issue a certificate of registration

altered to meet the circumstances of the case.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 81 — COMPANIES ACT Open official source

Notwithstanding anything in the memorandum or articles

of a company no member shall be bound by any alteration made in

the memorandum or articles after the date on which he became a

member if and so far as the alteration requires him to subscribe for

more shares than the number held by him at the date on which the

alteration is made, or in any way increases his liability as at that

date to contribute to the share capital of, or otherwise pay money

to, the company

Provided that this article shall not apply in any case where

the member agrees in writing, either before or after the alteration is

made, to be bound thereby.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 82 Authentication of documents. — COMPANIES ACT Open official source

(1) A document or proceeding requiring authentication by

a company may be signed by a director, the company secretary or

other authorised officer of the company.

(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 be

authenticated by a director, the company secretary, an authorised

officer of the company or 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.

Chapter II - Changes to a company’s share capital

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 83 Reduction of issued share capital. — COMPANIES ACT Open official source

(1)(a) A company may by extraordinary resolution of the general

meeting reduce its issued share capital or undistributable reserves,

including for the purposes of creating a distributable reserve. The

provisions of this sub-article shall be without prejudice to any higher

percentage than that required for an extraordinary resolution, as may be

set out in the company’s memorandum or articles of association.

(b) Without prejudice to the provisions of sub-article (9),

a reserve arising from the reduction of issued share

capital or the reduction of an undistributable reserve

carried out in accordance with sub-articles (1) to (3)

shall be treated as authorised profit for the purposes of

Chapter XI of Title I of Part V of this Act.

(c) The notice convening the general meeting at which an

extraordinary resolution as referred to in paragraph (a) is to

be taken shall, in addition to the requirements laid down in

article 135(1)(a), also specify the purpose of the reduction

and the way in which it is to be carried out.

(d) A reduction in share capital shall be void to the extent

that it reduces the capital to less than the minimum

prescribed by article 72.

(2) A copy of the resolution referred to in sub-article (1)(a)

shall be delivered by the directors or by the company secretary to

the Registrar for registration.

(3) A reduction of the issued share capital or of undistributable

reserves of a company shall take effect immediately on the lapse of three

(3) months from the date of the publication of the statement referred to

in article 401(1)(e)

Provided that if a creditor of the company whose debt existed

prior to the publication of the statement mentioned in this sub-article

objects thereto by sworn application filed within the period of three (3)

months reckoned as aforesaid and satisfies the Court that due to the

proposed reduction his claims would be prejudiced and that no adequate

safeguards have been obtained from the company, the Court shall either

uphold the objection or allow the reduction on sufficient security being

given.

(4) The Registrar of Courts shall without delay cause a copy of

any application filed in accordance with sub-article (3) and of any

decision given thereon to be served on the Registrar for

registration.

(5) The total or partial waiving of the unpaid part of the issued

shares and the release of the holders of those shares from their

obligation to pay up that unpaid part shall, notwithstanding

anything contained in the memorandum or articles of a company, in

all cases be considered as a reduction in share capital.

(6) Where there are different classes of shares, the decision by

the general meeting concerning a reduction in the issued share

capital shall be subject to a separate vote for each class of

shareholders whose rights are affected by the reduction, and for

every separate vote taken the same majority shall be required as

where the shares are not divided into different classes.

(7) A reduction of the issued share capital or of undistributable

reserves whose purpose is to offset losses incurred shall take effect

immediately on the registration of the resolution concerning such a

reduction in accordance with sub-article (2) and the provisions of

sub-article (3) shall not apply.

(8) A reduction of the issued share capital whose purpose is to

include sums of money in a reserve shall take effect immediately

on the registration of the resolution concerning such a reduction in

terms of sub-article (2) and the provisions of sub-article (3) shall

not apply

Provided that following this operation, the amount of the

reserve is not more than ten per cent of the reduced issued share

capital

Provided further that any such reserve shall be used only

for offsetting losses incurred or for increasing the issued share

capital by the capitalisation of such reserve.

(9) In the cases referred to in sub-article (8) the amounts

deriving from the reduction may not be used for making payments

or distributions to shareholders or to discharge shareholders from

the obligation to pay calls on their shares.

(10) The prohibition referred to in sub-article (9) shall not apply

to any amount derived from the reduction of any reserve referred to

in sub-article (8) where

(a) the said reduction is authorised by a new extraordinary

resolution of the general meeting in terms of sub-

article (1);

(b) the aforementioned resolution is delivered to the

Registrar in terms of sub-article (2); and

(c) the provisions of sub-article (3) are applied to the

reduction.

(11) A notice of reduction of the issued share capital shall be

delivered by the company to the Registrar, for registration, within

fourteen (14) days after the effective date of the reduction

Provided that the notice referred to in this sub-article shall

not be required in respect of reduction of non-distributable

reserves, or the share premium account in terms of article 114(1) or

a reduction of the capital redemption reserve in terms of article

115(1)(e).

(12) In cases of default in complying with the provisions of sub-

article (11), every officer of the company who is in default shall be

liable to an administrative penalty.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 84 Investment companies with variable share capital. — COMPANIES ACT Open official source

(1) A company may, by complying with the provisions of

this article, be formed as, or be converted into, an investment company

with variable share capital.

(2)

(a) The memorandum of an investment company with

variable share capital shall, in respect of the share

capital of the company, state in lieu of the matters

specified in article 69(f) that -

(i)

the share capital of the company shall be equal

to the value for the time being of the issued

share capital of the company; and

(ii)

such share capital shall be divided into a

specified number of shares without assigning

any nominal value thereto; and

(b) furthermore, the memorandum of the company shall

limit the object of the company to either one of the

following -

(i)

the collective investment of its funds in

securities and in other movable and immovable

property, or in any of them, with the aim of

spreading investment risk; and giving

shareholders of the company the benefit of the

results of the management of its funds, and in

the fulfilment of that object, it shall be entitled

to perform any act which is connected with or

ancillary thereto; or

(ii) to act and operate as a retirement scheme or

retirement fund within the meaning of article 2

of the Retirement Pensions Act; and

(c) the memorandum or articles of the company shall

provide -

(i)

that the actual value of the paid up share capital

of the company shall be at all times equal to the

value of the assets of any kind of the company

after the deduction of its liabilities; and

(ii)

that the shares of the company shall be

purchased by the company directly or indirectly

out of the assets of the company, at the request

of any of the holders thereof or as otherwise

provided by the memorandum or articles of the

company.

(3) Action taken by a company to ensure that the value of its

shares as quoted on a regulated market or any equivalent market in

a non-member State or non-EEA State does not deviate from its net

asset value by more than a percentage specified in its articles,

which deviation shall not be greater than five per cent, shall be

regarded as action taken for the purposes of sub-article (2)(c)(ii).

(4) An investment company with variable share capital shall

not issue partly paid up shares.

(5) The purchase by an investment company with variable

share capital of its own shares shall be on such terms and in such

manner as may be provided by its articles.

(6) Shares of an investment company with variable share

capital which have been purchased by the company itself shall be

cancelled and the amount of the company’s issued share capital

shall be reduced by the amount of the consideration paid by the

company for the purchase of the shares, and nothing in this Act

shall require an investment company with variable share capital to

create any reserve.

(7) Without prejudice to any requirements that may be imposed

on an investment company with variable share capital pursuant to

any other enactment, the provisions of article 70(1) and (2), articles

72, 83, 85 to 88, 97, 103, 105 to 113, 115 and Chapter XI of Part V

of this Act, shall not apply to such a company.

(8) Notwithstanding any other provision of this Act, an

investment company with variable share capital shall not be

obliged to give any of the details in Parts 2 and 3 of the form of

annual return set out in the Seventh Schedule, other than the share

capital of the company and the number of shares issued.

(9) Any reference in this Act to the nominal value of an issued

or allotted share in, or of the issued or allotted share capital of, a

company shall be construed, in the case of an investment company

with variable share capital, as a reference to the net asset value.

(10) The Minister may, in consultation with the Minister

responsible under the Investment Services Act, acting on the advice

of the Malta Financial Services Authority and the Registrar, make

regulations for the better carrying out of any of the provisions of this

article and without prejudice to the generality of the foregoing may by

such regulations, in particular

(a)

make further provision regarding the contents of

the memorandum and articles of the company, including

provision for the issue of fractional shares;

(b)

exempt or provide for the exemption of such

company, or any category thereof, from any of the provisions

of this Act or of any other law in force, subject to such

modifications, variations and conditions as may be specified;

(c)

provide for the constitution and regulation of

investment companies with variable share capital as umbrella

or multi-class companies, and provide for the constitution of

sub-funds, and the different classes of shares that may be

issued by such companies;

(d)

provide for the possibility of apportioning and

allocating assets and liabilities between the different sub-funds

or classes, for considering individual sub-funds or classes as

separate and distinct entities for such purposes as may be

established, and provide for the currency or currencies in

which such sub-funds or different classes of shares may be

designated;

(e)

apply and extend, mutatis mutandis, the

provisions of this article to other forms of commercial

partnerships which constitute collective investment schemes

for the purposes of the Investment Services Act and subject to

such variations or modifications as may be prescribed;

(f)

provide for any matter incidental to, or

connected with the above.

(11) The Minister may, in consultation with the Minister

responsible under the Retirement Pensions Act, acting on the advice

of the Malta Financial Services Authority and the Registrar, make

regulations to apply and extend, mutatis mutandis, the provisions of

this article to investment companies with variable share capital

established for the purpose of acting and operating as a retirement

scheme or a retirement fund within the meaning of article 2 of the

Retirement Pensions Act and without prejudice to the generality of

the foregoing may, by such regulations, provide for any matter referred

to in sub-article (10).

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 84A Power to make regulations regarding cell companies. — COMPANIES ACT Open official source

(1) The Minister, in consultation with the Minister

responsible for finance and acting on the advice of the competent

authority under the Insurance Business Act, may make regulations

which provide for the formation, constitution, authorisation and

regulation of cell companies, make it possible for a company

authorised under the Insurance Business Act, to carry on business

of insurance, or any other business as may be prescribed, to convert

into a cell company, and for all matters that may arise in connection

therewith; and for the better carrying out of the provisions of this

article, and without prejudice to the generality of the foregoing,

may, by such regulations, in particular -

(a) make provision regarding the contents of the

memorandum and articles of association of a cell

company, including provision for the creation by the

cell company of any one or more cells, and for

segregating and protecting the cellular and other assets

of the company, and establish reporting and other

disclosure requirements;

(b) exempt or provide for the exemption of such company

from any of the provisions of this Act or of any other

law in force, subject to such modifications, variations

and conditions as may be specified; and that in so far as

any of the provisions of such regulations are inconsistent

with the provisions of this Act or of any other law, such

provisions in any such regulations shall prevail;

(c) make provision for the manner and the form whereby a

cell company may create and issue cell shares and to

make any provision relating to the assets of the cell

company, including the requirement that the assets of a

cell company should be of a specified class or

description, or any other requirements in respect of the

quality, nature or extent of such assets;

(d) make provision allowing cells or the cellular assets

attributable to any cell of a cell company to be

transferable to any other person;

(e) make provision for considering individual cells as

separate and distinct entities for such purposes as may

be established;

(f)

provide for any matter consequential, incidental to or

connected with any of the above matters.

(1A) Where any such regulations have been issued, the

competent authority as defined in the Insurance Business Act may

issue rules in terms of article 4 of the Insurance Business Act as

may be required for the better carrying out and to better implement

the provisions of any such regulations.

(2)

For the purpose of this article -

(a) "business of insurance" has the same meaning as

assigned to it in article 2(1) of the Insurance Business

Act and shall include the business carried on by a

captive insurance undertaking and captive reinsurance

undertaking in terms of the said Act, the business of an

insurance manager and the business of insurance

broking under the Insurance Distribution Act;

(b) "cell" means a cell created by a cell company for the

purpose of segregating and protecting the cellular

assets of the company in such manner as may be

prescribed and includes a reference to segregated

accounts, compartments or units within a company

having multiple accounts, compartments or units, by

whatever name designated, and the word "cellular"

shall be interpreted and applied accordingly;

(c) "cellular assets" of a cell company means the assets of

the company attributable to any cell of the company as

may be prescribed; and

(d) "cell company" is a company formed or constituted as

such or converted into a cell company and creating

within itself one or more cells for the purpose of

segregating and protecting the cellular assets of the

company in such manner as may be prescribed; and in

relation to the business of insurance manager, as well

as the business of insurance broking, reference to a

"company" shall include reference to a partnership en

commandite or similar or equivalent body corporate,

the capital of which is divided into shares.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 84B Application of article 84(10)(c) to collective investment schemes. — COMPANIES ACT Open official source

Nothing in article 84 shall be deemed to prohibit a

company, which is not a company with variable share capital but

which qualifies as a collective investment scheme and is duly

licensed under the Investment Services Act, from being constituted

as an umbrella or multi-class company and the provisions of article

84(10)(c) shall apply mutatis mutandis to such company.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 84C Minister may make regulations relating to securitisation vehicles. — COMPANIES ACT Open official source

(1) The Minister, in consultation with the Minister

responsible for finance and acting on the advice of the competent

authority under the Securitisation Act, may make regulations which

provide for the formation, constitution, authorisation and

regulation of cell companies, and which make it possible for a

securitisation vehicle to convert into a cell company and for all

matters that may arise in connection therewith.

(2) For the better carrying out of the provisions of this article,

and without prejudice to the generality of the foregoing, the

M in is te r, a c ti ng as a fo r e s a i d , m a y, by su c h r e g u la t i on s , i n

particular

(a) make provision regarding the contents of the

memorandum and articles of association of a cell

company, including provision for the creation by the

cell company of any one or more cells, and for

segregating and protecting the cellular and other assets

of the company, and establish reporting and other

disclosure requirements;

(b) exempt or provide for the exemption of such company

from any of the provisions of this Act or of any other

law in force, subject to such modifications, variations

and conditions as may be specified;

(bA) provide for the applicability or inapplicability of any

provision of this Act or of any other law to matters falling

under such regulations, subject to such modifications,

variations and conditions as may be specified, and that in

so far as any of the provisions of such regulations are

inconsistent with the provisions of this Act or of any

other law, such provisions in any such regulations shall

prevail;

(c) make provision for the manner and the form whereby a

cell company may create and issue cell shares and to

make any provision relating to the assets of the cell

company, including the requirement that the assets of a

cell company should be of a specified class or

description, or any other requirements in respect of the

quality, nature and extent of such assets;

(d) make provision allowing cells or the cellular assets

attributable to any cell of a cell company to be

transferable to any other person;

(e) make provision for considering individual cells as

separate and distinct entities for such purposes as may

be established;

(f)

provide for any matter consequential, incidental to or

connected with any of the above matters.

(2A) Where any such regulations have been issued in terms of

this article, the competent authority as defined in the Securitisation

Act may issue rules in terms of article 20 of the Securitisation Act

as may be required for the better carrying out and to better

implement the provisions of any such regulations.

(3) For the purposes of this article, "securitisation vehicle" has

the same meaning assigned to it in the Securitisation Act.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 84D Minister may make regulations relating to formation, etc., of incorporated cell companies and cells. — COMPANIES ACT Open official source

The Minister, in consultation with the Minister responsible

for finance and acting on the advice of the competent authority

under the Insurance Business Act or the competent authority under

the Investment Services Act, may make regulations which provide

for the formation, constitution, authorisation and regulation of

incorporated cell companies and incorporated cells as limited

liability companies with separate legal personality under this Act,

and which make it possible for such companies to carry on any

financial services business as may be prescribed, and for all matters

ancillary thereto or that may arise in connection therewith.

Regulations issued in terms of this article may also provide for the

applicability or inapplicability of, or the total or partial exemption

from, any of the provisions of this Act or of any other law in force

to incorporated cell companies and incorporated cells subject to

any modifications, variations or conditions as may be specified.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 84E Power to make regulations regarding cell companies carrying on or engaged in shipping or aviation business. — COMPANIES ACT Open official source

(1) (a) The Minister may make regulations in order to

(i)

provide

for

the

formation,

constitution,

authorisation and regulation of cell companies;

(ii)

provide for the possibility for a company to

convert into a cell company;

(iii)

provide for all other matters that may arise in

connection therewith; and

(iv)

provide for the better carrying out of the

provisions of this sub-article,

and, without prejudice to the generality of the foregoing, may, by

such regulations, in particular regulate the matters referred to in

article 84A(1)(a) to (f), which shall apply also to this article.

(b) For the purposes of this article, the term "shipping or

aviation business" shall mean all or any of the following

(i)

the ownership, operation (under charter,

lease or otherwise), administration and management

(including personnel engagement, employment or

management whether on board or otherwise) of any ship

or of any aircraft or aircraft engine and the carrying on of

all ancillary financial, security, commercial and other

activities in connection therewith; or

(ii)

the holding of shares or other equity

interests in any undertaking, whether Maltese or

otherwise, established solely or mainly for the carrying

on or carrying out of any one or more of the activities

referred to in this definition and the carrying on of all

ancillary financial, security, commercial and other

activities in connection therewith; or

(iii) the activities of a parent company which

holds shares or other equity interests in undertakings,

whether Maltese or otherwise, where any one or some of

these undertakings is established solely or mainly for the

carrying on or carrying out of any one or more of the

activities referred to in this definition and the carrying on

of all ancillary financial, security, commercial and other

activities in connection therewith; or

(iv) the raising of capital through loans, the

issue of guarantees or the issue of securities by an

undertaking when the purpose of such activity is to

achieve the objects or activities stated in the preceding

sub-paragraphs for the undertaking itself or for any

other undertaking within the same group; or

(v)

the carrying on of such other objects or

activities within the maritime or the aviation sector and

related or connected matters which the Minister may, on

the advice of the Authority, from time to time

prescribe by regulations.

For the purposes of this paragraph the terms "group", "parent

company" and "undertaking" shall have the same meaning as is given

to them in article 2.

(c)

For the purposes of this article the terms "cell",

"cellular assets" and "cell company" shall have the same

meaning, mutatis mutandis, as is given to them in terms of

article 84A(2)

Provided that for the purposes of this article

references to a "company" shall also include references to a

partnership en commandite or similar or equivalent body

corporate, the capital of which is divided into shares.

(2)

The Minister may furthermore make regulations which

provide for the formation, constitution, authorisation and regulation of

incorporated cell companies and incorporated cells as limited liability

companies with separate legal personality under this Act, and which

make it possible for such companies to carry on or be engaged in

shipping or aviation business, and for all other matters related,

connected or ancillary thereto or that may arise in connection

therewith.

(3)

Regulations made in terms of this article may also provide

for the applicability or inapplicability of, or the total or partial

exemption from, any of the provisions of this Act or of any other law

in force to incorporated cell companies and incorporated cells subject

to any modifications, variations or conditions as may be specified.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 85 Increase in issued share capital and directors’ authority to issue shares. — COMPANIES ACT Open official source

(1) Any increase in the issued share capital of a company

shall be decided upon by an ordinary resolution of the company,

unless the memorandum or articles require a higher percentage than

that required for an ordinary resolution by article 135(2)

Provided that the memorandum or articles,

or

an

extraordinary resolution of a company may permit either

(a) the board of directors to issue shares up to a maximum

amount as may be specified in the same memorandum

or articles, or extraordinary resolution, which

permission shall be for a maximum period of five

years, renewable by ordinary resolution for further

maximum periods of five years each; or

(b) the general meeting to authorise by ordinary resolution

the board of directors to issue shares up to a maximum

amount as may specified in the same memorandum or

articles, or in the extraordinary resolution, which

permission shall be for a maximum period of five years,

renewable by ordinary resolution for further maximum

periods of five years each.

(2) Where there are several classes of shares, any resolution

referred to in sub-article (1) shall be subject to a separate vote for each

class of shareholders whose rights are affected by such resolution, and

the provisions relating to the majority required for the resolution shall

apply for each class.

(3) A copy of any such ordinary or extraordinary resolution

referred to in sub-articles (1) and (2) shall be delivered to the

Registrar for registration, within fourteen days after the date of the

relative resolution, failing which every officer of the company who

is in default shall be liable to a penalty, and for every day during

which the default continues, to a further penalty.

(4) The provisions of sub-articles (1) to (3) shall apply to the

issue of all securities which are convertible into shares or which

carry the right to subscribe for shares, but not to the conversion of

such securities, nor to the exercise of the right to subscribe.

(5) Where an increase in the issued share capital is not fully

taken up, that issue shall be deemed not to have taken effect

Provided that if the conditions of the issue so provide, the

issued share capital shall be increased by the amount of subscriptions

received.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 86 Amount paid up on allotment of shares in a public company. — COMPANIES ACT Open official source

Shares shall be paid up on allotment to at least twenty-five

per cent of their nominal value in the case of a public company.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 87 Amount paid up on allotment of shares in a private company. — COMPANIES ACT Open official source

Shares shall be paid up on allotment to at least twenty per

cent of their nominal value in the case of a private company.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 88 Offering of shares on a pre-emptive basis on issue. — COMPANIES ACT Open official source

(1) Whenever shares of a public company are proposed to

be allotted for consideration in cash, those shares shall be offered

on a pre-emptive basis to shareholders in proportion to the share

capital held by them

Provided that shares in a company, whether public or

private, shall not be offered on a pre-emptive basis to the company

itself, notwithstanding any other provision of this Act empowering

the company to hold its own shares.

(2) Where the issued share capital of a company as referred to

in sub-article (1) having several classes of shares carrying different

rights with regard to voting, or participation in distributions, or

sharing in assets in the event of a winding up, is increased by

issuing new shares for allotment in only one of these classes, the

right of pre-emption of shareholders of the other classes is to be

exercised only after the exercise of this right by the shareholders of

the class in which the new shares issued are to be allotted.

(3) A copy of any offer of subscription on a pre-emptive basis

indicating the period within which this right shall be exercised

shall be delivered to the Registrar for registration

Provided that such registration shall not be required as long

as all the shareholders of the company are informed in writing of

the offer of subscription on a pre-emptive basis and of the period

within which this right shall be exercised.

(4) The right of pre-emption referred to in sub-article (3) shall

be exercised within a period of not less than fourteen days from the

date of publication of the offer in the Gazette or on a website

maintained by the Registrar in accordance with article 401(1)(e), or

from the date of dispatch of the letters to the shareholders referred

to in the same sub-article.

(5) The right of pre-emption shall not be restricted or

withdrawn by the memorandum or articles

Provided that, for a particular allotment as referred to in

this article, the right of pre-emption may be restricted or withdrawn

by extraordinary resolution of the general meeting. In such case the

Board of directors shall be required to present to that general

meeting a written report indicating the reasons for restriction or

withdrawal of the right of pre-emption and justifying the proposed

issue price.

(6) A copy of the resolution referred to in sub-article (5), shall

be delivered by the directors or by the company secretary to the

Registrar for registration.

(7) The memorandum or articles or an extraordinary resolution

of the general meeting may authorise the Board of directors to

restrict or withdraw the right of pre-emption if the Board is

authorised to issue shares in accordance with article 85 and for as

long as the Board remains so authorised.

(8) A copy of the resolution referred to in sub-article (7) shall

be delivered to the Registrar for registration.

(9) The provisions of sub-articles (1) to (8) shall apply to the

issue of all securities which are convertible into shares or which

carry the right to subscribe for shares, but not to the conversion of

such securities, nor to the exercise of the right to subscribe.

(10) The right of pre-emption shall not be excluded for the

purposes of sub-articles (5) to (8) where, in accordance with the

decision to allot shares, shares are issued to banks or financial

institutions with a view to their being offered to shareholders of the

company in accordance with sub-article (1).

(11) If default is made in complying with sub-articles (6) or (8),

every officer of the company who is in default shall be liable to a

penalty, and, for every day during which the default continues, to a

further penalty.

Chapter III - Capital issues by public companies

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 89 Issue of applications for shares in or debentures of a public company to be made with a prospectus. — COMPANIES ACT Open official source

It shall not be lawful for a company to make an offer of

securities to the public in a Member State or EEA State unless the

company is a public company and the offer is made in the form of a

prospectus which complies with the requirements of the Financial

Markets Act and any applicable regulations made thereunder, and the

provisions of articles 91 to 96 shall apply to such offers

Provided that the provisions of this Chapter, including the

obligation to draw up a prospectus, shall not apply to a form of

application issued -

(a) in connection with a bona fide invitation to a person to

enter into an underwriting agreement with respect to

the shares or debentures; or

(b) in relation to securities which do not constitute an

"offer of securities to the public" within the meaning

of article 2(3); or

(c) by a holder of a collective investment scheme licence

within the meaning of the Investment Services Act

provided such issue is made in accordance with rules

or regulations made under that Act; or

(d) in relation to dividends paid out to existing shareholders

in the form of shares of the same class as the shares in

respect of which such dividends are paid provided that a

document is made available containing information on

the number and nature of the shares and the reasons for

and details of the offer; or

(e) in connection with an offer where securities are allotted

to existing or former directors or employees by their

employer or by an affiliated undertaking provided that

the company has its head office or registered office in the

Community and provided that a document is made

available containing information on the number and

nature of the securities and the reasons for and details of

the offer; or

(f)

in relation to shares issued on the redemption or

reduction of shares of the same class already issued, if

the issuing of such new shares does not involve any

increase in the issued capital; or

(g) in relation to an offer made in connection with a take-

over bid, provided that a document is available

containing information which is regarded by the

Registrar as being equivalent to that of the prospectus;

or

(h) in relation to an offer made in connection with or

pursuant to a proposed merger or division, provided that

a document is available containing information which is

regarded by the Registrar as being equivalent to that of

the prospectus

Provided further that paragraph (e) shall also apply to a

company established outside the European Union and the EEA and

whose securities are admitted to trading either on a regulated market

or on a third country market. In the latter case, the exemption shall

apply provided that adequate information, including the document

referred to in paragraph (e), is available in English provided that

the European Commission has adopted an equivalence decision

regarding the third-country market concerned.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 90 Dating of prospectus and matters to be stated therein. — COMPANIES ACT Open official source

(Deleted by Act V. 2020.25).

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 91 Penalty. — COMPANIES ACT Open official source

Any person responsible for the issue, circulation or

distribution of a prospectus or for the issue of a form of application

for shares or debentures, in contravention of article 89 shall be liable

to a penalty

Provided that a director or other person responsible for the

prospectus shall not incur liability if -

(a) as regards any matter not disclosed he proves that he

was not cognizant thereof; or

(b) he proves that the contravention arose from an honest

mistake of fact on his part; or

(c) the contravention was in respect of matters which, in

the opinion of the court, were immaterial or otherwise

such as ought, having regard to all the circumstances

of the case, reasonably to be excused.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 92 Prospectus including a statement by experts. — COMPANIES ACT Open official source

(Deleted by Act V. 2020.25).

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 93 Registration of prospectus. — COMPANIES ACT Open official source

(1)

A copy of the prospectus signed in accordance

with the provisions of the Financial Markets Act shall be delivered to

the Registrar for registration within five days from the date of its

publication.

(2) If default is made in complying with the provisions of this

article, every officer of the company who is in default shall be liable to

a penalty, and, for every day during which the default continues, to a

further penalty.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 94 Civil liability for misstatements in prospectus. — COMPANIES ACT Open official source

(1) The persons who are responsible for or who have

authorised the issue of a prospectus shall be jointly and severally

liable for any damage sustained by a person subscribing for shares

or debentures on the faith of that prospectus, by reason of any

untrue statement included therein.

(2)

No person shall be liable under this article if -

(a) he proves that he had reasonable grounds to believe

and did, up to the time of the allotment of the shares or

debentures believe, that the statement was true; or

(b) he proves, as regards an untrue statement made by an

expert, that he had reasonable grounds to believe and

did, up to the time of the allotment of the shares or

debentures believe, that the person making the

statement was competent to make it; or

(c) on becoming aware of the untrue statement before any

allotment is made under the prospectus, he gave

reasonable public notice of the untruthfulness of the

statement.

(3) No person shall be liable for statements made in the summary

referred to in Part A of the Second Schedule, including the translation

thereof, except when such statements are misleading, inaccurate or

inconsistent, when read together with the other parts of the prospectus,

or if it does not provide, when read together with the other parts of the

prospectus, key information in order to aid investors when considering

whether to invest in such securities. The summary shall contain a clear

warning to that effect.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 95 Document containing offer of shares or debentures for sale to be deemed prospectus. — COMPANIES ACT Open official source

(1) Where a company allots or agrees to allot any shares in

or debentures of the company with a view to all or any of those

shares or debentures being offered for sale to the public, any

document by which the offer for sale to the public is made shall for

all purposes be deemed to be a prospectus and all the rules relating

to prospectuses shall apply and have effect accordingly.

(2) It shall be presumed, unless the contrary is proved, that the

allotment or agreement to allot was made with a view to the shares

or debentures being offered for sale to the public if it is shown -

(a) that an offer for sale to the public was made within six

months after the allotment; or agreement to allot; or

(b) that at the date when the offer was made the whole

consideration to be received by the public company in

respect of the shares or debentures had not been so

received.

(3) The provisions of article 93 as applied by this article shall

have effect -

(a) as if that article further required a prospectus to have

attached thereto a copy of any contract under which

the said shares or debentures have been or are to be

allotted or, in the case of a contract not reduced in

writing, a memorandum giving full particulars thereof;

and

(b) as though the persons making the offer were persons

named in the prospectus as directors of a company.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 96 Interpretation of provisions relating to prospectus. — COMPANIES ACT Open official source

(1) For the purposes of the provisions of articles 89 to 95 -

(a) a statement included in a prospectus shall be deemed

to be untrue if it is misleading in the form and context

in which it is included or otherwise inaccurate or

inconsistent; and

(b) a statement shall be deemed to be included in a

prospectus if it is contained therein or in any document

appearing on the face thereof or by reference

incorporated therein or issued therewith.

(2) In this Chapter the term "expert" includes engineer, valuer,

accountant and any other person whose profession gives authority

to a statement made by him.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 96A Offer of securities to the public in third countries. — COMPANIES ACT Open official source

(1) Where a public company makes an offer of securities

to the public in a third country, its directors shall, within one month

of the registration of the issued securities with the company, deliver

to the Registrar for registration a notice specifying the following

information, together with a copy of the offering document, if any

(a)

the country or countries where the offer is made;

(b)

the purpose of the offer;

(c)

the amount of the offer;

(d)

the type of securities offered;

(e)

the name of the authority or other body in the

third country which was responsible for the approval of the

offering document, if any.

(2)

In default of complying with the provisions of sub-article

(1), every officer of the company who is in default shall be liable to a

penalty, and for every day during which the default continues, to a

further penalty.

(3)

It shall be the responsibility of the issuer and the directors of

the company to comply with the laws and regulations of the third

country in which the securities are offered to the public.

(4)

For the purpose of this article

(a) "an offer of securities to the public in a third country"

shall mean an offer of securities in such third country

(i)

to more than one hundred and fifty

persons; or

(ii)

where the total consideration of the offer

exceeds one hundred thousand euro (€100,000),

calculated over a period of twelve months;

(b) "offering document" includes a prospectus or other

invitation to acquire securities.

Chapter IV -Allotment of shares and debentures of companies

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 97 No allotment unless minimum subscription received. — COMPANIES ACT Open official source

(1) No allotment shall be made of any share capital of a

public company offered to the public for subscription -

(a) unless there has been subscribed and paid in cash the

amount stated in the prospectus as the minimum

amount which, in the opinion of the directors, shall be

raised by the issue of share capital in order to provide

for the preliminary expenses, purchase of property and

working capital as specified in the prospectus; and

(b) unless the capital is subscribed in full, whether or not

in cash, or the conditions stated in the offer for

allotment, where the offer is not fully subscribed, are

satisfied.

(2) If the conditions referred to in sub-article (1) have not been

complied with on the expiration of forty days after the issue of the

prospectus, all money received from applicants for shares shall be

forthwith repaid to them without interest.

(3) If any of the money is not repaid within forty-eight days

after the issue of the prospectus, the directors of the company shall

be jointly and severally liable to repay it with annual interest at the

rate of two percentage points over the Central Bank of Malta

minimum discount rate from the expiration of the fortieth day;

except that a director shall not be so liable if he proves that the

d e f a u l t i n t h e r e p a y m en t o f t h e m o n e y w a s n o t d u e t o a n y

misconduct or negligence on his part.

(4) Any condition requiring or binding an applicant for shares

to waive compliance with any requirement of this article shall be

void.

(5) All money received from applicants in pursuance of the

prospectus shall remain the property of the applicants until such

time as the allotment is made in an irrevocable manner and shall

not be available for the satisfaction of any debts of the company.

Such money shall be kept in a separate bank account so long as the

company may become liable to repay it under sub-article (2); and if

default is made in complying with this sub-article, the company and

every officer of it who is in default shall be liable to a penalty, and,

for every day during which the default continues, to a further

penalty.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 98 Effect of irregular allotment. — COMPANIES ACT Open official source

(1) An allotment made by a company in contravention of

article 97 shall be voidable at the instance of the applicant for

shares referred to in the same article by sworn application filed

within one month after the date of the allotment

Provided that the proceedings may be commenced even if

the company has been dissolved and is being wound up.

(2) If a director knowingly contravenes or permits or authorises

the contravention of article 97, he shall be liable to compensate the

company and the allottee respectively for any loss, damages or

costs which the company or the allottee may have sustained or

incurred by the contravention

Provided that proceedings to recover any such loss,

damages or costs shall only be commenced by sworn application

within two years from the date of allotment.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 99 Time of the opening of the subscription lists. — COMPANIES ACT Open official source

(Deleted by Act V. 2020.25)

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 100 Revocability of application for shares or debentures. — COMPANIES ACT Open official source

(Deleted by Act V. 2020.25)

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 101 Allotment of shares, etc., to be dealt in on stock exchange. — COMPANIES ACT Open official source

(Deleted by Act V. 2020.25)

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 102 Operation of article 101 where prospectus offers shares for sale. — COMPANIES ACT Open official source

(Deleted by Act V. 2020.25)

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 103 Return as to allotments. — COMPANIES ACT Open official source

(1) Whenever a company makes any allotment of its

shares, the company shall, within one month thereafter, deliver to

the Registrar for registration -

(a) a return of the allotments stating the number and the

nominal amount of the shares comprised in the

allotment, the names and addresses of the allottees and

the amount paid and that due, and payable, on each

share, whether on account of the nominal value of the

share or by way of premiums; and

(b) in the case of shares allotted as fully or partly paid up

otherwise than in cash, a contract in writing or, where

the contract is not reduced to writing, a document

containing the particulars of the contract, constituting

the title of the allottee to the allotment, together with

any contract of sale, or for services rendered or other

consideration in respect of which the allotment was

made, and a return stating the number and nominal

value of shares so allotted, the extent to which they are

to be treated as paid up, and the consideration for

which they have been allotted; and

(c) where applicable, a declaration that the requirements

of article 97 have been complied with.

(2) If default is made in complying with the provisions of this

article, every officer of the company who is in default shall be

liable to a penalty, and, for every day during which the default

continues, to a further penalty.

Chapter V - Maintenance of share capital and protection of

class rights

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 104 Duty of directors on serious loss of capital. — COMPANIES ACT Open official source

(1) Where the net assets of a public company are half or

less of its called-up issued share capital, the directors shall, not

later than thirty days from the earliest day on which that fact is

known to any director of the company, duly convene a general

meeting of the company by means of a notice to that effect for a

date not later than forty days from the date of the notice for the

purpose of considering whether any, and if so, what steps should be

taken to deal with the situation, including consideration as to

whether the company should be dissolved.

In this sub-article, "net assets" shall have the same meaning

assigned to it under article 193(2).

(2) In a meeting convened in pursuance of sub-article (1), only

the steps mentioned in the said sub-article may be considered.

(3) If a general meeting as required by sub-article (1) is not

convened, each of the directors of the company in default shall be

liable to a penalty, and, for every day during which the default

continues, to a further penalty.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 105 Company may not subscribe for its own shares. — COMPANIES ACT Open official source

(1) A company shall not subscribe for any of its own

shares, whether on original subscription or on any subsequent

subscription, and if any of its shares have been subscribed for by a

person acting in his own name but on behalf of the company the

subscriber shall be deemed to have subscribed for them for his own

account.

(2) On the registration of a company, the subscribers to the

memorandum shall be jointly and severally liable to pay for the

shares subscribed in contravention of sub-article (1).

(3) In the case of an increase in the issued share capital, the

members and directors shall be liable jointly and severally to pay

for the shares subscribed in contravention of sub-article (1)

provided that any member or director may be released from such

liability if he proves that the breach occurred through no fault of

his own.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 106 Conditions in which a company may acquire its own shares. — COMPANIES ACT Open official source

(1) Without prejudice to the principle of equal treatment

of the shareholders who enjoy the same rights in respect of the

shares held by them and to any relevant provisions of the

Prevention of Financial Markets Abuse Act, a company may

acquire any of its own shares otherwise than by subscription,

provided all the following conditions are respected -

(a) provision is made by the memorandum or articles of

the company for authorising the acquisition by the

company of its own shares;

(b) authorisation is given by an extraordinary resolution,

which resolution shall determine the terms and

conditions of such acquisitions and in particular the

maximum number of shares to be acquired, the

duration of the period for which the authorisation is

given and which may not exceed eighteen months and,

in the case of acquisition for valuable consideration,

the maximum and minimum consideration;

(c) the provisions of article 135 shall apply in respect of

the extraordinary resolution referred to in paragraph

(b) above subject however to the condition that shares

already held by the company itself shall be treated as

carrying no voting rights;

(d) the nominal value of the acquired shares, including

shares previously acquired by the company and held

by it shall not exceed fifty per cent of the issued share

capital;

(e) no acquisitions by a company of its own shares shall

be made when on the closing date of the last

accounting period the net assets as set out in the

company’s annual accounts are, or following such

distribution, would become lower than the amount of

called up issued share capital plus those reserves

which may not be distributed under the provisions of

this Act or the company’s memorandum or articles;

and in any case it shall not be possible for the company

to acquire any of its own shares except out of the

proceeds of a fresh issue of shares made specifically

for the purpose, or out of profits available for

distribution;

(f)

the shares acquired shall be fully paid up shares; and

(g) a company may not as a result of the acquisition of any

of its shares become the only holder of its ordinary

shares.

(2) The company shall deliver to the Registrar for registration a

copy of the resolution mentioned in sub-article (1). If default is

made in complying with the provisions of this sub-article, every

officer of the company who is in default shall be liable to a penalty,

and, for every day during which the default continues, to a further

penalty.

(3) The provisions of sub-article (1)(b) shall not apply where

the acquisition of a company’s own shares is necessary to prevent

serious and imminent harm to the company.

(4) The provisions of sub-article (1)(b) shall furthermore not

apply to shares acquired either by the company itself or by a person

acting in his own name but on the company’s behalf for distribution

to that company’s employees or to the employees of its parent

company or of any of its subsidiary undertakings. Such shares shall

be distributed within one year of their acquisition.

(5) References in this article and in articles 107 to 110 to a

company holding, acquiring or otherwise dealing in its own shares

shall be deemed to include references to the company so doing

either itself or through a person acting in his own name but on the

company’s behalf.

(6) The company may, at any time, cancel any of the shares

acquired in accordance with the provisions of this article and article

83 shall not apply to such cancellation. Upon the cancellation

becoming effective, the amount of the issued share capital shall be

reduced accordingly by the nominal value of the shares cancelled.

(7) Within fourteen (14) days after the cancellation of shares

become effective as set out in sub-article (6), the company shall

deliver to the Registrar a notice for registration.

(8) In cases of default in complying with the provisions of sub-

article (7), every officer of the company who is in default shall be liable

to an administrative penalty.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 107 Acquisition of own shares by a company without application of article 106. — COMPANIES ACT Open official source

(1) A company may acquire any of its own shares

otherwise than by subscription without complying with the

provisions of article 106, other than sub-article (1)(g) thereof,

where the shares are -

(a) acquired by the company in the course of a reduction

of the issued share capital made in accordance with

article 83; or

(b) Deleted by Act XVIII.2025.12.

(c) forfeited or surrendered in accordance with the

provisions of article 112; or

(d) acquired in any new procedure for the conversion, the

amalgamation or the division of companies pursuant to

the provisions contained in Parts VII, VIII and IX of this

Act respectively, or otherwise acquired in any procedure

for the cross-border conversion, the cross-border merger

or the cross-border division of companies pursuant to the

Cross-border

Divisions of

Limited Liability

Companies Regulations, Cross-border Conversions of

Limited Liability Companies Regulations and the

Cross-border Mergers of Limited Liability Companies

Regulations; or

(e) acquired in any procedure for the change of status of a

company pursuant to the provisions of article 213; or

(f)

acquired by the company from dissenting shareholders in

accordance with the provisions of this Act and

regulations issued thereunder or pursuant to an order of

the Court made under the provisions of this Act and

regulations issued thereunder for the re-purchase of

shares held by dissenting shareholders, including any

order made in terms of article 402(3)(d); or

(g) fully paid up and acquired by an investment company

with fixed share capital or by another company

forming part of the same group at the member’s

request provided that such acquisitions shall not have

the effect of reducing the company’s net assets below

the amount of the issued share capital plus any

reserves the distribution of which is forbidden by law;

(h) acquired by the company during a redemption of

preference shares in accordance with article 115.

(2) Where shares acquired pursuant to sub-article (1)(b) to (f)

are retained by the company and are not disposed of within thirty

months of their acquisition the company shall by extraordinary

resolution cancel such shares within six months of the expiry of the

said thirty months.

(3) The provisions of article 83 dealing with the reduction of

issued share capital shall apply where shares are cancelled pursuant

to sub-article (2)

Provided that the court may not disallow the cancellation

but, if good cause is shown, it shall only order that sufficient

security be given to the creditor who had objected to the

cancellation, and if sufficient security is not immediately available,

the court shall order the provision of such security immediately it

becomes available to the company and no distribution of dividend

may be effected by the company in the meantime

Provided further that this sub-article shall not apply where the

company has acquired the shares otherwise than for valuable

consideration.

(4) If the company fails to comply with sub-article (2) within

the time limit prescribed, any member or director of the company

may apply to the court for an order that such shares be cancelled.

(5) Where the nominal value of the shares held by the company

in pursuance of any of the provisions of sub-article (1), including

shares which the company may have acquired through a person

acting in his own name but on behalf of the company, does not

exceed ten per cent of the issued share capital thereof , the

provisions of sub-articles (2) to (4) shall not apply.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 108 Shares acquired or held in contravention of articles 106 and — COMPANIES ACT Open official source

(1) If shares acquired or held in contravention of article

106 and of article 107(1) are not disposed of within one year of

their acquisition, the company shall cancel such shares within six

months of the expiry of the said year.

107. (2) Where shares are cancelled pursuant to sub-article (1) the

provisions of article 83 shall apply subject to the proviso to article

107(3).

(3) If the company fails to comply with sub-article (1) within

the time limit prescribed, any member or director of the company

may apply to the court for an order that such shares be cancelled.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 109 Conditions for acquisition by a company of its own shares where permitted by law. — COMPANIES ACT Open official source

During the time that a company holds any of its own

shares -

(a) they shall carry no voting rights notwithstanding any

provisions to the contrary in the company’s

memorandum or articles; and

(b) if the shares are included among the assets of the

company shown in the balance sheet, a reserve of the

same amount, unavailable for distribution, shall be

included among the reserves

Provided that following the cancellation of the shares

pursuant to the provisions of article 106(6) or article

107(2), the reserves referred to in paragraph (b) shall

become distributable.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 110 — COMPANIES ACT Open official source

(1) It shall not be lawful for an undertaking -

(a) to subscribe for, hold, acquire or otherwise deal in

shares in a company which is its parent company; or

(b) to give, whether directly or indirectly, and whether by

means of a loan, guarantee, the provision of security or

otherwise, any financial assistance for the purpose of

an acquisition or subscription made or to be made by

any person of or for any shares in the company or its

parent company.

(2) The provisions of sub-article (1) shall not apply to

transactions effected with a view to the acquisition of shares by or

f o r t h e c o m p a n y ’s e m p l o y e e s o r t h e e m p l o y ee s o f a g r o u p

company

Provided that such transactions shall not have the effect of

reducing the net assets of the company below the amount specified

in article 106(1)(e).

(3) Sub-article (1) shall not apply to the provision of financial

assistance by an investment company with fixed share capital for

the purpose of or in connection with the acquisition of its fully paid

up shares by another undertaking

Provided that such provision of financial assistance may

not have the effect of reducing the net assets of the company below

the amount specified in article 106(1)(e).

(4) The provisions of sub-article (1)(b) shall not apply if the

company granting the financial assistance is a private company and

the following requirements are fulfilled

(a) the Board of Directors has, after taking into account

the financial position of the company and the

obligations of the directors as set out in article 136A,

resolved by the affirmative vote of a majority of all the

directors forming the Board at the time of the

particular resolution, to authorize the grant of financial

assistance for a specific transaction;

(b) an extraordinary resolution has been passed affirming

the resolution taken pursuant to paragraph (a); and

(c) a declaration in the prescribed form signed by two

directors confirming that the requirements set out in

paragraphs (a) and (b) have been satisfied is duly filed

with the Registrar prior to the granting of the financial

assistance, and the signature of one director shall

suffice where the Board is composed of only one

director.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 111 Effect of acceptance of a company’s own shares as security. — COMPANIES ACT Open official source

The acceptance of a company’s own shares by way of

pledge or other form of security shall be treated as an acquisition

by the company of such shares for the purposes of articles 106, 107

and 109.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 112 Forfeiture or surrender of shares. — COMPANIES ACT Open official source

(1) Any share in a company may be forfeited from any

shareholder in favour of the company and any shareholder may

surrender any or all of his shares in a company in favour of that

company if the shareholder fails to pay any call or instalment of a

call on the day appointed for payment thereof and as long as

provision to that effect is contained in the memorandum or articles

of the company.

(2) The provisions of article 109 shall apply to a forfeiture or

surrender of shares until such time as the company disposes of or

otherwise cancels them.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 113 Conditions for payment of commissions, discounts, etc. — COMPANIES ACT Open official source

(1) It shall be lawful for a company to pay a commission

or make a discount or allowance to any person in consideration for

his subscribing or agreeing to subscribe, whether absolutely or

conditionally for any shares in the company, or procuring or

agreeing to procure subscriptions, whether absolute or conditional,

for any shares in the company, provided that -

(a) authority therefor is given by the memorandum or

articles; and

(b) the commission, discount or allowance does not

exceed ten per cent of the price at which the shares are

issued or the amount authorised by the memorandum

or articles, whichever is the less; and

(c) the amount or rate per cent of the commission,

discount or allowance and the number of shares which

persons have agreed in consideration thereof to

subscribe absolutely shall be disclosed in the manner

required by sub-article (3): and

(d) in no event may the value of such shares be reduced to

below their nominal value as a result of the payment of

such commission, discount or allowance.

(2) If shares are issued in contravention of the provisions of

this article the holder thereof shall be bound to pay the company an

amount equal to the amount of the commission, discount or

allowance given in excess of that permitted by this article, with

annual interest at the rate of two percentage points over the Central

Bank of Malta minimum discount rate.

(3) The conditions specified in sub-article (1) shall, in the case

of shares offered to the public for subscription, be disclosed in the

prospectus and in the case of shares not so offered -

(a) they shall be disclosed in a statement signed by every

director of the company or by any other person in

representation of any director so authorised in writing

and delivered to the Registrar for registration before

the actual payment of the commission, discount or

allowance; and

(b) where a circular or notice, not being a prospectus,

giving subscription for the shares is issued, they shall

also be disclosed in such circular or notice.

(4) If default is made in complying with sub-article (3)(a),

every officer of the company who is in default shall be liable to a

penalty.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 114 Application of premium received on issue of shares. — COMPANIES ACT Open official source

(1) Where a company issues shares at a premium whether

for cash or otherwise, a sum equal to the aggregate amount or value

of the premiums on those shares shall be immediately paid in full

and transferred to an account, to be called "the share premium

account", and the provisions of this Act relating to the reduction of

the issued share capital of a company shall, except as provided in

this article, apply as if the share premium account were paid up

share capital of the company.

(2) The share premium account may, notwithstanding anything

contained in the foregoing sub-article, be applied by the company -

(a) in paying up unissued shares of the company to be

issued to members of the company as fully paid bonus

shares; or

(b) in writing off the preliminary expenses of the company

or the expenses of or the commission paid or discount

allowed on, any issue of shares or debentures of the

company; or

(c) in providing for the premium payable on redemption

of any redeemable preference shares or of any

debentures of the company.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 114A Group reconstruction relief. — COMPANIES ACT Open official source

(1) Where a company issues shares (the "issuing

company") and the issuing company -

(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).

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 114B Takeover relief. — COMPANIES ACT Open official source

(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.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 114C Relief may be reflected in company’s balance sheet. — COMPANIES ACT Open official source

An amount corresponding to the amount representing the

premiums, or part of the premiums, on shares issued by a company

that by virtue of any relief under articles 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.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 114D Power to make further provisions by regulations. — COMPANIES ACT Open official source

(1) The Minister may, by regulations published in the

Gazette, make such provision as appears to 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) 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.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 115 Redeemable preference shares. — COMPANIES ACT Open official source

(1) Where a company, duly authorised by its

memorandum or articles, issues preference shares which are to be

redeemed or are liable to be redeemed at the option of the company

or the shareholder -

(a) no such shares shall be redeemed except out of the

profits of the company which would otherwise be

available for dividend or, in accordance with sub-

article (4), out of the proceeds of a fresh issue of

shares made for the purpose of the redemption;

(b) no such shares shall be issued after 1st June 2003

unless the following conditions are satisfied as regards

the terms and manner of redemption -

(i)

the date on or by which, or dates between which,

the shares are to be or may be redeemed must be

specified in the company’s memorandum or

articles or, if the memorandum or articles so

provide, fixed by the directors, and in the latter

case the date or dates must be fixed before the

shares are issued;

(ii) any other circumstances in which the shares are

to be or may be redeemed must be specified in

the company’s memorandum or articles;

(iii) the amount payable on redemption must be

specified in, or determined in accordance with,

the company’s memorandum or articles, and in

the latter case the memorandum or articles must

not provide for the amount to be determined by

reference to any person’s discretion or opinion;

and

(iv) any other terms and conditions of redemption

shall be specified in the company’s

memorandum or articles;

(c) no such shares shall be redeemed unless they are fully

paid up and the terms of redemption shall require full

payment on redemption;

(d) the premium, if any, payable on redemption shall have

been provided for out of the profits of the company or

out of the company’s share premium account before

the shares are redeemed;

(e) where any such shares are redeemed otherwise than

out of the proceeds of a fresh issue, there shall, out of

profits, which would otherwise have been available for

distribution as dividend, be transferred to a reserve to

be called "the capital redemption reserve", a sum equal

to the nominal amount of the shares redeemed, and the

provisions of this Act relating to the reduction of the

issued share capital of a company shall, except as

provided in this article, apply as if the capital

redemption reserve were paid up share capital of the

company.

(2) The capital redemption reserve may, notwithstanding

anything contained in this article, be applied by the company in

paying up unissued shares of the company to be issued to members

of the company as fully paid bonus shares.

(3) Preference shares redeemed under this article shall be

tr e a t e d a s c a n c e l l e d on r e d e m p ti o n , an d t h e a m ou n t of t h e

company’s issued share capital shall be diminished by the nominal

value of those shares accordingly

Provided that a redemption of preference shares by a

company shall not to be taken as reducing the amount of the

company’s authorised share capital.

(4) Without prejudice to the provisions of sub-article (3), where

a company is about to redeem preference shares, it shall have the

power to issue shares up to the nominal value of the preference

shares to be redeemed as if those preference shares had never been

issued.

(5) A notice of the redemption of preference shares referred to

in the preceding sub-articles of this article shall be delivered by the

company to the Registrar for registration, within fourteen days after

the date of redemption.

(6) If default is made in complying with the provisions of sub-

article (5) every officer of the company who is in default shall be

liable to a penalty, and, for every day during which the default

continues, to a further penalty.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 116 Rights of holders of special classes of shares and changes or variations thereof. — COMPANIES ACT Open official source

(1) If, in the case of a company the share capital of which

is divided into different classes of shares, provision is made by the

memorandum or articles for authorising the change of any shares in

the company from one class into another or for the variation of the

rights attached to any class of shares in the company, subject to the

consent of any specified proportion of the holders of the issued

shares of that class and of any other class affected thereby or the

sanction of a resolution passed at a separate meeting of the holders

of those shares and of the holders of any other shares affected

thereby, and in pursuance of the said provision the shares are

changed from one class into another or the rights attached to any

such class of shares are at any time varied, the holders of not less in

the aggregate than fifteen per cent either of the issued shares of that

class or of any other class affected thereby, being persons who did

not consent to or vote in favour of the resolution for the change or

variation, may by sworn application filed within twenty-one days

of the consent or the resolution, demand that the change or

variation shall not have effect.

(2) On any such demand the court, if it is satisfied, having

regard to all circumstances of the case, that the change or variation

would unfairly prejudice the holders of shares, the class of which is

being changed or the rights of which are being varied, or the

holders of any other class of shares affected thereby, shall disallow

the change or variation.

(3) The Registrar of Courts shall without delay cause a copy of

any sworn application filed under sub-article (1) and of any

judgment given thereon to be served on the Registrar for

registration, and the said sworn application shall, on pain of nullity,

include a demand to that effect.

(4) Article 79(2) and (4) shall apply in respect of any consent or

resolution given or taken in terms of sub-article (1).

(5) Where no provision is made by the memorandum or articles

for authorising the change or variation referred to in sub-article (1),

no such change or variation may be made

Chapter VI - Miscellaneous provisions about shares and

debentures

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 117 Numbering of shares. — COMPANIES ACT Open official source

Each share in a company shall be distinguished by its

appropriate number

Provided that, if at any time all the issued shares in a

company, or all the issued shares therein of a particular class, are

fully paid up and rank pari passu for all purposes, none of those

shares need thereafter have a distinguishing number so long as they

remain fully paid up and rank pari passu for all purposes with all

shares of the same class for the time being issued and fully paid up.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 117A Usufructuary of shares. — COMPANIES ACT Open official source

A usufructuary of shares in a company shall be entitled to

attend any general meeting of the company and to receive

dividends but he shall not be entitled to vote at any meeting of the

company unless the right to vote is specifically mentioned and

provided for in the

(a) public deed creating the right of usufruct; or

(b) memorandum and articles of association of a company.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 118 Transfer of shares or debentures. — COMPANIES ACT Open official source

(1) Notwithstanding any provisions contained in any

other law, a transfer of shares in or debentures of a company shall

be made in writing.

(2) It shall not be lawful for a company to register a transfer of

shares in or debentures of the company unless a proper instrument

of transfer or an authentic copy thereof has been delivered to the

company

Provided that, without prejudice to any obligation arising

under the provisions of the Duty on Documents and Transfers Act,

nothing in this article shall prejudice any power of the company to

register as shareholder or debenture holder any person to whom the

right to any shares in or debentures of the company has been

transmitted causa mortis.

(3) This article shall not apply to shares or debentures of a

company held or evidenced in a dematerialised form or represented in

book-entry form as immobilisation.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 119 Registration of transfer or transmission of shares or debentures. — COMPANIES ACT Open official source

(1) On the application of the transferor or of the

transferee of any share in or debenture of a company, the company

shall enter in its register of members or of debentures, as the case

may be, the name and address of the transferee and where the

application is made by the transferor the entry shall be made in the

same manner and subject to the same conditions as if the

application for the entry were made by the transferee.

(2) If a company refuses to register a transfer of shares or

debentures, it shall, within two months after the date on which the

transfer was lodged, send to the transferee notice of the refusal.

(3) Notwithstanding the provisions of the regulations contained

in Part I of the First Schedule and notwithstanding anything

contained in a public company’s memorandum or articles, the

directors of a public company shall be obliged to register the

transfer of any shares in the company in favour of any person who

has acquired those shares as a result of a judicial sale thereof.

(4) On the application of the person to whom the right to any

shares in or debentures of a company has been transmitted causa

mortis, the company shall register in its register of members or

debentures, as the case may be, the name and address of such

person.

(5) If a company refuses to register a transmission as is

referred to in sub-article (4), it shall, within two months after the

date on which the transmission is lodged, send to the person to

whom the right to any shares or debentures of a company has been

transmitted causa mortis, notice of the refusal.

(6) If default is made in complying with the provisions of sub-

articles (2) or (5), every officer of the company who is in default,

shall be liable to a penalty, and, for every day during which the

default continues, to a further penalty.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 120 Issue of certificates. — COMPANIES ACT Open official source

(1) Every company shall, within two months after the

allotment of any of its shares or debentures and within two months

after the date on which a transfer of any such shares or debentures

is registered with the company, and within one month from the date

on which any such shares or debentures transmitted causa mortis

have been registered in the name of the person entitled to be

registered as the holder thereof, deliver the certificates of all

shares, debentures or debenture stock allotted, transferred or

transmitted causa mortis to the persons entitled thereto, unless the

conditions of issue of the shares or debentures otherwise provide.

(2) The expression "transfer" for the purposes of this article

means a transfer on which the relevant duty, if any, has been paid

and is otherwise valid, and does not include such a transfer as the

company is for any reason entitled to refuse to register and does not

register.

(3) In the case of a transfer or of a transmission causa mortis of

shares the company shall within fourteen days after the date on

which a transfer of any such shares is registered with the company,

and within one month from the date on which any such shares

transmitted causa mortis have been registered in the name of the

person entitled to be registered as the holder thereof, deliver to the

Registrar for registration a notice of the transfer or the transmission

causa mortis stating the names and addresses of the transferees or

the names and addresses of the persons entitled to the shares

transmitted causa mortis, as the case may be

Provided that in the case of public companies whose shares

are admitted to listing on a regulated market or on an equivalent

market in a non-Member State or non-EEA State, the delivery to

the Registrar shall take place within ninety days after the date on

which a transfer of any such shares is registered with the company,

and within ninety days from the date on which any such shares

transmitted causa mortis have been registered in the name of the

person entitled to be registered as the holder thereof.

(4) If default is made in complying with any of the provisions

of this article, every officer of the company who is in default shall

be liable to a penalty, and, for every day during which the default

continues, to a further penalty.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 121 Prohibition of share warrants. — COMPANIES ACT Open official source

No company may issue a share warrant to bearer

notwithstanding anything contained in its memorandum and

articles of association.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 121A Transitory provisions. — COMPANIES ACT Open official source

(1) A holder of a share warrant shall, before the expiry of

nine months from the coming into force of the Companies

(Amendment) A ct, 2017 surrender the share warrant to the

company which had issued such warrant.

(2)

Upon the surrender of a share warrant the company shall

(a) cancel any share warrant issued by it;

(b) enter in its register of members the name of the

persons requesting that their names and addresses be

entered in the register of members in lieu of share

warrants surrendered, and in this regard the provisions

of article 123(1)(a), (1)(b) and (2) shall apply; and

(c) notify the Registrar of any changes in the register of

members made consequently to that provided in sub-

article (1) and paragraphs (a) and (b).

(3) Any share warrant which is not surrendered to the issuing

company as aforesaid by the end of the period mentioned in sub-

article (1) shall, after the end of the said period, no longer be

recognised by the company and such share warrants shall be

deemed to have been cancelled.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 122 Pledging of securities. — COMPANIES ACT Open official source

(1) Securities may, unless otherwise provided in the

memorandum or articles of the company or under the conditions of

issue of those securities, be pledged by their holder in favour of any

person as security for any obligation. The pledge of securities shall

be constituted by means of an instrument in writing entered into

between the pledgor and the pledgee

Provided that in the case of a private company, securities

may not be pledged unless the memorandum or articles of the

company specifically so provide; and in relation to transfers of

shares by members of the company any restriction resulting from

the memorandum or articles of the company shall, subject to the

provisions of sub-article (10), be deemed not to apply to transfers

by the pledgee in terms of sub-article (6) or resulting from any

judicial sale.

(2) Notice of the pledge shall be delivered by the pledgor or the

pledgee to the Registrar for registration within fourteen days of the

granting of the pledge. The company whose securities have been

pledged, shall also be notified of the pledge in writing within the

said period and the company shall record that fact in the register of

holders of the respective securities.

(3) The pledge of securities shall be effective in relation to a

third party only after the registration by the Registrar of the notice

referred to in sub-article (2).

(4) Saving the provisions of sub-article (3), during the

existence of a pledge of securities, any transfer or other

assignment, made by the pledgor, whether by onerous or gratuitous

title, of the pledged securities shall be null and void.

(5) Notwithstanding the provisions of sub-article (4), any

transfer or other assignment of securities made with the consent of

the pledgee shall be valid and the securities to be transferred shall

continue to be subject to the pledge.

(6) Without prejudice to the right of the pledgee to apply for

the judicial sale of the securities and notwithstanding the

provisions of the Civil Code or of the memorandum or articles of

the company, in the event of a default under the agreement of

pledge and upon giving notice by judicial act to the pledgor and the

company, the pledgee shall be entitled to -

(i)

dispose of the securities which are pledged in his

favour; or

(ii)

appropriate and acquire the securities himself, in

settlement of the debt due to him or of part

thereof.

(7) For the purposes of sub-article (6) the value of the

securities may be established by agreement between the pledgor

and the pledgee after notice of default has been given by the

pledgee to the pledgor in terms of the said sub-article (6), and no

prior agreement thereon shall be valid

Provided that, in case of disagreement, the fair value for the

sale or appropriation of the securities shall be determined by a

certified public accountant appointed by the Civil Court, First Hall,

on the application of the pledgee.

(8) For the purposes of sub-article (7), the fair value of the

securities shall be that obtaining on the date of the notice referred

to in sub-article (6).

(9) The pledgee shall, in selling the securities in accordance

with the provisions of sub-article (6), be obliged to seek the best

p r i c e b ei n g n o t l e s s t h a n t h e i r f a i r v a l u e a s d e t e r m i n e d i n

accordance with sub-article (7). In the event that a buyer cannot be

found for the securities at their fair value, the pledgee shall apply to

the court for the securities to be sold at less than their fair value as

aforesaid subject to such conditions as the court may deem fit.

(10) In the case of a pledge of shares in a private company, the

pledgee shall be obliged, prior to the exercise of the right granted

by sub-article (6), to offer the shares to other shareholders of the

company in accordance with any pre-emption rights relating to the

transfer of shares as laid down in the memorandum or articles of

that company, and, failing such pre-emption rights, to all the other

shareholders of the company in proportion to their holdings. In

either case the shareholders shall be entitled to purchase the shares

at the price determined in accordance with sub-article (7). Such

offer shall be kept open for at least ten working days.

(11) In the case of a pledge of shares in a public company the

memorandum or articles of which require any shareholder wishing

to transfer shares in the company to offer them on a pre-emptive

basis to other shareholders of the company, the pledgee shall

accordingly be obliged, prior to the exercise of the right granted by

sub-article (6), to offer the shares to those shareholders, who shall

be entitled to purchase the shares at the price determined in

accordance with sub-article (7). Such offer shall be kept open for at

least ten working days.

(12) (a) In the case of a pledge of securities in a company which

are listed on a Maltese regulated market and in respect of

which securities arrangements have been made for the

maintenance by such Maltese regulated market of the

relevant register of holders thereof, the provisions of

sub-articles (2) to (11) and (15) shall not apply for such

quoted securities. The following provisions shall apply

instead

(i)

the pledgor or the pledgee shall deliver within

fourteen days of the granting of the pledge of a

quoted security a certified copy of the signed

pledge agreement to the Maltese regulated

market, which shall also be served with a notice

of termination of the pledge by the pledgee

within fourteen days of the termination of the

pledge;

(ii)

the company whose listed securities have been

pledged shall also be notified of the pledge or of

its termination within the said periods and the

company shall record that fact in the register of

holders of the respective securities;

(iii)

such pledge of securities shall be effective in

relation to a third party only from the date of

delivery of the signed pledge agreement to the

Maltese regulated market and any transfer or

other assignment made therefrom by the pledgor,

whether by onerous or gratuitous title, of the

pledged securities shall be null and void; and

(iv)

the pledgee shall, in the event of a default under

the agreement of pledge and upon giving notice

by judicial act to the pledgor, the Maltese

regulated market and the company, have the

securities sold through a person duly licensed

under the Investment Services Act.

(b) In the case of a pledge of securities in a public company

which are listed on a regulated market other than a

Maltese regulated market or on an equivalent market

in a non-Member State or non-EEA State, the

provisions of sub-articles (7) to (11) shall not apply

and in the event of a default under the agreement of

pledge, the pledgee shall, upon notice to the pledgor

and the company in accordance with sub-article (6)

have the securities sold through a person duly

authorised for this purpose.

(13) In the exercise of his rights under this article, the pledgee

shall only sell or appropriate such number of securities as are

needed to raise sufficient proceeds to repay the debt due. All

remaining shares shall be released to the pledgor.

(14) It shall be lawful for the parties to an agreement of pledge

of securities to agree on the person or persons who shall exercise

all the rights belonging to the holder of securities including voting

rights and the right to receive dividends and interest payments

Provided that, should the agreement between the parties not

make provision for such matters, all rights pertaining to a holder of

securities shall, for the duration of the pledge, be exercised by the

pledgor until such time as he defaults under the agreement of

pledge or until the pledgee enforces his security; and in any such

case, upon giving notice by a judicial act to the pledgor and the

company, all the rights belonging to the pledgor shall immediately

become exercisable by the pledgee

Provided further that, unless the pledgor and the pledgee

have otherwise agreed in the pledge agreement and notice thereof

has been given to the company, dividends or interests payments due

on securities which are pledged shall, during such time as the

pledge is registered in the register of holders of the respective

securities, be paid by the company to the pledgee who shall

appropriate any such amounts received to the interest due on the

debt secured by the pledge, and, if there is an excess, to the capital.

(15) Notice of termination of the pledge shall be delivered by

the pledgee to the Registrar for registration within fourteen days of

the termination of the pledge. The company, securities in which

h a v e b e e n p led ge d, s ha l l a l s o be n ot if ie d in w ri ti n g of t he

termination of the pledge within the said period and the company

shall record that fact in the register of holders of the respective

securities.

(16) Subject to the provisions of sub-articles (6) to (9) and (13),

the terms and conditions of the pledge of a debenture warrant shall

be determined by agreement between the pledgor and the pledgee.

The pledge f a debenture warrant shall be effective in relation to a

third party from the date of delivery of the share warrant or

debenture warrant to the pledgee.

(17) For the purposes of any enforcement in accordance with this

article and of any provisions relating to the enforcement of rights

pertaining to the pledgee in accordance with this Act, it shall be

permissible for a pledgee, or any person acting on its behalf, to

exercise any such rights by acting on behalf of the pledgor as its

mandatary, provided that the pledgee is authorised to so act,

irrevocably and by way of security, in accordance with article 1887 of

the Civil Code and that the right to act in such manner is clearly

prescribed in the relevant agreement regulating the pledge of securities

in terms of this article and the Act.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 123 Register of members. — COMPANIES ACT Open official source

(1) Every company shall keep a register of its members

and shall enter therein the following particulars

(a) the names and addresses of the members and a

statement of the shares held by each member,

distinguishing each share by its number, so long as the

share has a number, and of the amount paid or agreed

to be considered as paid on the shares of each member;

(b) the date at which each person was entered in the

register as a member; and

(c) the date at which any person ceased to be a member.

(2) Where two or more persons hold one or more shares in a

company jointly, they shall, for the purposes of this Act, be treated

a s a si n g le m e m b e r ; a n d , u nl e s s o t he r wi s e pr o v i d e d in t he

memorandum or articles, the name of only one of such persons

shall be entered in the register of members. Such person shall be

elected by the joint holders and shall for all intents and purposes be

deemed vis-à-vis the company to be the member of the company in

respect of all the shares so held.

(3) The register of members shall be kept at the registered

office of the company or at such other place as may be specified in

the memorandum or articles.

(3A) Notwithstanding the provisions of this article, a company may

make arrangements for the register of its members to be kept in a

dematerialised form or represented in book-entry form as

immobilisation with a central securities depository established in a

recognised jurisdiction

Provided that the company shall remain responsible for the

proper keeping of the register and shall keep a copy of all entries

relating to registered shareholders held by the central securities

depository.

(4) If default is made in complying with any requirement of

this article, every officer of the company who is in default shall be

liable to a penalty, and, for every day during which the default

continues, to a further penalty.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 124 Register of debentures. — COMPANIES ACT Open official source

(1) Every company shall keep a register of debentures

and shall enter therein the names and addresses of the registered

holders and particulars of the debentures held by them respectively.

(2) The register of debentures shall be kept at the registered

office of the company or at such other place as may be specified in

the memorandum or articles.

(3) Where two or more persons hold one or more debentures

jointly, they shall for the purposes of this Act be treated as a single

debenture holder; and, unless otherwise provided in the

memorandum or articles, the name of only one of such persons

shall be entered in the register of debentures. Such person shall be

elected by the joint holders and shall for all intents and purposes be

deemed vis-à-vis the company to be the holder of all the debentures

so held.

(3A) Notwithstanding the provisions of this article, a company may

make arrangements for the register of its members to be kept in a

dematerialised form or represented in book-entry form as

immobilisation with a central securities depository established in a

recognised jurisdiction

Provided that the company shall remain responsible for the

proper keeping of the register and shall keep a copy of all entries

relating to registered shareholders held by the central securities

depository.

(4) If default is made in complying with any requirement of

this article, every officer of the company who is in default shall be

liable to a penalty and, for every day during which the default

continues, to a further penalty.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 125 Inspection of registers. — COMPANIES ACT Open official source

Except when duly closed in accordance with the

provisions of article 126, and subject to such reasonable

restrictions as the company in general meeting may impose -

(a) the register of members shall be open to the inspection

of any member of the company without charge; and

(b) the register of debentures shall be open to the

inspection of any person without charge.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 126 Power to close registers. — COMPANIES ACT Open official source

(1) A company may, on giving notice by advertisement in

a daily newspaper circulating wholly or mainly in Malta, close the

register of members to inspection for any period or periods not

exceeding in the whole thirty days in each year.

(2) The register of debentures may be closed to inspection in

accordance with provisions contained in the memorandum or

articles or in the debentures or, in the case of debenture stock, in

the stock certificates, during such period or periods, not exceeding

in the whole thirty days in any one year, as may be therein

specified.

(3) The memorandum or articles may provide that, during such

time as the register of members or the register of debentures is

closed in accordance with the provisions of sub-articles (1) and (2),

no new particulars may be entered therein.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 126A Proper keeping of register in certain instances. — COMPANIES ACT Open official source

(1) Notwithstanding the provisions of articles 123 and

124, where shares or debentures of a company are held or

evidenced in a dematerialised or uncertificated form within the

meaning of the Financial Markets Act, the company shall remain

responsible for the proper keeping of the register and shall keep a

copy of all entries relating to registered shareholders and registered

holders of debentures held by the central securities depository or by

an overseas central securities depository.

(2) For the purposes of this article "central securities

depository" and "overseas central securities depository" shall have

the same meaning assigned to them in article 2 of the Financial

Markets Act.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 127 Trustees and nominees. — COMPANIES ACT Open official source

(1) Unless otherwise provided in its articles, a company

formed and registered in Malta shall not recognise any nominee

relationship or trust in respect of any security issued by it, and the

company shall not recognise, even when having notice thereof, any

interest or other right in such security, but shall only recognise the

registered holder thereof.

(2) Notwithstanding anything contained in this article, the

persons beneficially entitled to a security shall be taken into

account, and any nominee or any trust relationship shall be

disregarded, for determining the status of the company for the

purpose of Chapter XII of this Title

Provided that the company shall not be obliged to obtain or

to record any information on the number of beneficiaries and it

shall be the sole duty of the trustee to inform the company of the

number of beneficiaries if it appears to the trustee that, having

regard to the number of beneficiaries, it may result in the aggregate

number of persons interested exceeding fifty. The Registrar may at

any time order any trustee to declare in writing to the company the

number of beneficiaries and in such a case reference shall only be

made to beneficiaries who enjoy a fixed interest in the shares under

the trust.

(3) Where a trustee holds shares in a company for the benefit of

beneficiaries

(a) the memorandum of association and articles of

association, if any, shall be deemed to be validly

entered into for the purposes of articles 68 and 75 if

they are signed only by the trustee when all the shares

in the company are subscribed by the trustee;

(b) the memorandum of association, the register of

members, share certificates, returns of allotments and

any annual return of a company may specify the

number of shares held by the trustee on its own

account, if any, and the amount of shares held under

trusts or each trust if more than one, and the provisions

of article 123(1)(a), (b) and (c) shall be construed

accordingly;

(c) a resolution in writing pursuant to article 210 shall be

deemed to be valid and effective if it is signed only by

the trustee when all the shares in the company are

subscribed by the trustee.

(4)

(a) Where a beneficial owner of shares in a company

which are held by a trustee, transfers or otherwise

disposes of the beneficial ownership of such shares

inter vivos to a third party, such a transaction shall be

deemed to constitute a transfer of shares for the

purposes of the Duty on Documents and Transfer Act,

and for the purposes of article 5(1) of the Income Tax

Act.

(b) Where a change in the registered holder of shares in a

company does not involve a change in the beneficial

ownership thereof, such change shall not be deemed to

constitute a transfer of shares for the purposes of the

Duty on Documents and Transfers Act, and for the

purposes of article 5(1) of the Income Tax Act, but

shall nevertheless be noted in the register of members.

(c) For the purposes of article 49 of the Duty on

Documents and Transfers Act, "transferor" and

"transferee" in a transfer of shares inter vivos shall be

deemed to include a trustee acting on behalf of either

the transferor or the transferee of the beneficial

ownership of such shares, or of both such transferor

and transferee.

(5)

In this article

"beneficial owner" means the person beneficially entitled to the

shares under a trust or a fiduciary agreement;

"trustee" shall mean a person who may act as a trustee in

accordance with the Trusts and Trustees Act and shall include any

fiduciary holding shares on behalf of another person.

(6) Except where expressly permitted under article 212,

nothing in this article shall be deemed to imply that a company may

have less than two members.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 127A Shares in companies held by private foundations, including those with segregated cells. — COMPANIES ACT Open official source

(1) Except as provided for in this article, the provisions of

the preceding article shall not apply to foundations and -

(a) a private foundation as an organisation with legal

personality; or

(b) when the foundation is a multi-cell foundation, a

segregated cell in a private foundation which

constitutes a distinct patrimony administered by the

private foundation,

shall be considered to be the holder of any shares registered in the

name of the private foundation or in the name of the foundation with

reference to a cell, and beneficial owners shall not be taken into

account and shall be disregarded for determining the status of the

company for the purpose of Chapter XII of this Title.

(2) (a) Where a beneficial owner of shares in a company,

which are held by a private foundation, transfers or otherwise

disposes of the beneficial ownership of such shares inter vivos to a

third party, such a transaction shall be deemed to constitute a

transfer of shares for the purposes of the Duty on Documents and

Transfer Act, and for the purposes of article 5(1) of the Income Tax

Act.

(b) Where a change in the registered holder of shares in a

company does not involve a change in the beneficial

ownership thereof, such change shall not be deemed to

constitute a transfer of shares for the purposes of the

Duty on Documents and Transfers Act, and for the

purposes of article 5(1) of the Income Tax Act, but

shall nevertheless be noted in the register of members.

(c) For the purposes of article 49 of the Duty on

Documents and Transfers Act, "transferor" and

"transferee" in a transfer of shares inter vivos shall be

deemed to include a private foundation acting for the

benefit of either the transferor or the transferee of the

beneficial ownership of such shares, or of both such

transferor and transferee.

(3) When a transaction takes place relating to a cell of an

organisation under article 20A or under article 20B of the Second

Schedule to the Civil Code and the relevant private foundation, or

the foundation with reference to a cell, is the registered holder of

any shares in a company, any such transaction shall be treated as a

change in the registered holder of the shares in a company without

a n y c h a n g e i n t h e b e n ef i c i a l o w n e r o f t h e s h ar e s. A s su c h

transactions result in a change in legal ownership of any shares in a

company, the administrators, or their delegates, of -

(a) the transferring organisation and, if different, those of

recipient organisation under the said article 20A; or

(b) the organisation of which the cell formed part and

those of the new organisation under the said article

20B,

as the case may be, shall, within fifteen (15) days from the

date of the act, deliver to the Registrar a form

notifying him of the transfer of such shares from one

foundation to the other, or from the foundation to a

new organisation, as the case may be.

(4) The same principles above stated shall apply when the

transferor and, or transferee are involved in a partnership en

commandite the capital of which is divided into shares.

(5)

In this article

"beneficial owner" means the person beneficially entitled to

the shares under a private foundation;

"private foundation" shall mean a foundation as defined in

article 31B of the Second Schedule of the Civil Code.

Chapter VII - Meetings and Resolutions

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 128 Holding of annual general meeting. — COMPANIES ACT Open official source

(1) Every company shall in each year hold a general

meeting as its annual general meeting in addition to any other

meetings in that year, and shall specify the meeting as such in the

notices calling it, and not more than fifteen months shall elapse

between the date of one annual general meeting of the company and

that of the next

Provided that so long as a company holds its first annual

general meeting within eighteen months of its registration it need

not hold it in the year of its registration or in the following year.

(2) Every general meeting other than an annual general meeting

shall be an extraordinary general meeting.

(3) If default is made in complying with the provisions of sub-

article (1), every officer of the company who is in default shall be

liable to a penalty, and, for every day during which the default

continues, to a further penalty.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 129 Convening of extraordinary general meeting on requisition. — COMPANIES ACT Open official source

(1) The directors of a company shall on the requisition of

one or more members of the company, holding not less than one-

tenth of the paid-up share capital of the company on the date of the

deposit of the requisition, which share capital carries the right of

voting at general meetings of the company, forthwith proceed to

duly convene an extraordinary general meeting of the company

within twenty-one (21) days from the date of the deposit of the

requisition, to be held not later than two (2) months from the date

of the deposit of the requisition.

(2)

The requisition shall state the objects of the meeting and

shall be signed by the requisitionists and deposited at the registered

office of the company and may consist of several documents in

like form, each signed by all the requisitionists.

(3)

If the directors do not duly proceed to hold a meeting as

referred to in sub-article (1), the requisitionists may convene a meeting

in the same manner, as far as possible, as that in which meetings are to

be convened by the directors, provided that such a meeting shall be held

before the expiration of three (3) months from the date of the deposit of

the requisition.

(4) Any reasonable expense incurred by the requisitionists by

reason of the failure of the directors to hold a meeting shall be repaid to

the requisitionists by the company, and any sum so repaid shall be due

personally by the directors who were in default and may be retained by

the company out of any amount due or which may become due by the

company by way of fees or other remuneration in respect of their

services to such directors who were in default.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 130 Length of notice for calling general meetings. — COMPANIES ACT Open official source

A general meeting of a company shall be deemed not to

have been duly convened unless at least fourteen days’ notice has

b een gi ven i n writi ng, and any pro visio n in th e com pany’s

memorandum or articles shall be construed as requiring fourteen

days’ notice in writing in so far as it provides for the calling of a

meeting of a company, other than an adjourned meeting, by a

shorter notice

Provided that a meeting of the company shall

notwithstanding that it is called by a shorter notice, be deemed to

have been duly convened if it is so agreed by all the members

entitled to attend and vote thereat.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 131 General provisions as to meetings and votes. — COMPANIES ACT Open official source

The following provisions shall have effect in so far as the

articles of a company do not contain other provisions in that behalf-

(a) notice of any general meeting of a company shall be

given to every member of the company and shall be

served in the manner in which notices are required to

be served by the First Schedule;

(b) two members personally present shall be a quorum;

(c) any member elected by the members present at a

meeting may be chairman thereof;

(d) every member shall have one vote in respect of each

share or each euro of stock held by him unless

otherwise provided in the terms of issue of such shares

or stock.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 132 Powers of court to order meeting. — COMPANIES ACT Open official source

(1) If for any reason it is impracticable to call a meeting

of a company in any manner in which meetings of the company

may be called, or to conduct the meetings of that company in the

manner prescribed by the articles or this Act, the court may, either

on its own motion or on the demand of either of the parties to the

proceedings during the course of such proceedings or, in the

absence of any proceedings, on the application of any director of

the company or of any member of the company who would be

entitled to vote at the meeting, order a meeting of the company to

be called, held and conducted in such manner as the court thinks fit,

and where any such order is made, may give such ancillary or

consequential directions as it thinks expedient, including a

direction that one member of the company present in person or by

proxy shall be deemed to constitute a meeting.

(2) The provisions of sub-article (1) shall also apply to the

calling of meetings of the board of directors of a company, if the

court considers that the circumstances justify such course of action.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 133 Proxies. — COMPANIES ACT Open official source

(1) Notwithstanding

anything

contained

in

the

memorandum or articles of a company, any member entitled to

attend and vote at a meeting of the company or at a meeting of any

class of members of the company shall be entitled to appoint

another person, whether a member or not, as his proxy to attend and

vote instead of him, and a proxy so appointed shall have the same

right as the member to speak at the meeting and to demand a poll.

(2)

The appointment of a proxy shall be in writing.

(3) In every notice calling a meeting of a company there shall

appear with reasonable prominence a statement that a member

entitled to attend and vote is entitled to appoint a proxy and that a

proxy need not also be a member. If default is made in complying

with this sub-article, every officer of the company who is in default

shall be liable to a penalty.

(4) A provision in a company’s memorandum or articles shall

be void in so far as it would have the effect of requiring an

instrument appointing a proxy, or any other document necessary to

show the validity of, or otherwise relating to, the appointment of a

proxy, to be received by the company or any other person more

than forty-eight hours before a meeting or adjourned meeting for

that appointment to be effective.

(5) A company shall not issue at its own expense to some only

of the members entitled to be sent a notice of a meeting and to vote

thereat by proxy, invitations to appoint as proxy a person or one of

a number of persons specified in the invitations. If default is made

in complying with this sub-article, every officer of the company

who is in default shall be liable to a penalty

Provided that an officer shall not be liable to a penalty by

reason only of the issue to a member at his request in writing of a

form of appointment naming the proxy, or of a list of persons

willing to act as proxy, if the form or list is available on request in

writing to every member entitled to vote at the meeting by proxy.

(6) The provisions of this article shall apply to meetings of any

class of members of a company as they apply to general meetings

of the company.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 134 Right to demand a poll. — COMPANIES ACT Open official source

(1) Any provision contained in the memorandum or

articles of a company shall be void in so far as it would have the

effect either-

(a) of excluding the right to demand a poll at a general

meeting on any question other than the election of the

chairman of the meeting or the adjournment of the

meeting; or

(b) of making ineffective a demand for a poll on any such

question which is made either -

(i)

by not less than five members having the right to

vote at the meeting; or

(ii)

by a member or members representing not less

than one-tenth of the total voting rights of all the

members having the right to vote at the meeting;

or

(iii)

by a member or members holding shares in the

company conferring a right to vote at the

meeting being shares on which an aggregate sum

has been paid up equal to not less than one-tenth

of the total sum paid up on all the shares

conferring that right.

(2) The instrument appointing a proxy to vote at a meeting of

the company shall be deemed to confer authority to demand or join

in demanding a poll; and for the purposes of sub-article (1) a

demand by a person as proxy for a member shall be the same as a

demand by the member.

(3) On a poll taken at a meeting of a company or a meeting of

any class of members of that company, a member entitled to more

than one vote need not, if he votes, use all his votes or cast all the

votes he uses in the same way.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 135 Extraordinary and ordinary resolutions. — COMPANIES ACT Open official source

(1) A resolution shall be an extraordinary resolution

where-

(a) it has been taken at a general meeting of which notice

specifying the intention to propose the text of the

resolution as an extraordinary resolution and the

principal purpose thereof has been duly given; and

(b) it has been passed by a member or members having the

right to attend and vote at the meeting holding in the

aggregate not less than seventy-five per cent in

nominal value of the shares represented and entitled to

vote at the meeting and at least fifty-one per cent, or

such other higher percentage as the memorandum or

articles may prescribe, in nominal value of all the

shares entitled to vote at the meeting

Provided that, if one of the aforesaid majorities is

obtained, but not both, another meeting shall be

convened within thirty days in accordance with the

provisions for the calling of meetings to take a fresh

vote on the proposed resolution. At the second meeting

the resolution may be passed by a member or members

having the right to attend and vote at the meeting

holding in the aggregate not less than seventy-five per

cent in nominal value of the shares represented and

entitled to vote at the meeting. However, if more than

half in nominal value of all the shares having the right

to vote at the meeting is represented at that meeting, a

simple majority in nominal value of such shares so

represented shall suffice.

(2) An ordinary resolution shall be passed by a member or

members having the right to attend and vote holding in the

aggregate shares entitling the holder or holders thereof to more

than fifty per cent of the voting rights attached to shares

represented and entitled to vote at the meeting, or such other higher

percentage as the memorandum or articles may prescribe.

(3) In the case of a private company a resolution shall be an

extraordinary resolution where -

(a) the provisions of sub-article (1)(a) are complied with;

and

(b) it has been passed by a number of members having the

right to attend and vote at any such meeting holding in

the aggregate not less than fifty-one per cent in

nominal value of the shares conferring that right or

such other higher percentage as the memorandum or

articles may prescribe.

Chapter VIII - Management and Administration

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 136 Power of company to borrow money, hypothecate or charge its undertaking, etc. — COMPANIES ACT Open official source

A company shall, unless otherwise provided in its

memorandum or articles, have the power to borrow money and to

guarantee the obligations of any third party and, for such purpose,

to hypothecate or charge its undertakings, property and uncalled

capital or any part thereof including as security for its obligations

or for those of any third party, and to issue debentures, debenture

stock and other securities whether outright or as security for its

liabilities or obligations or for those of any third party.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 136A General duties of directors. — COMPANIES ACT Open official source

(1) A director of a company shall be bound to act

honestly and in good faith in the best interests of the company.

(2) The directors of a company shall promote the well-being of

the company and shall be responsible for

(a) the general governance of the company and its proper

administration and management; and

(b) the general supervision of its affairs.

(3) In particular, but without prejudice to any other duty

assigned to the directors of a company, or to any one of them, by

the memorandum or articles of association or by this Act or any

other law, the directors of a company shall

(a) be obliged to exercise the degree of care, diligence and

skill which would be exercised by a reasonably

diligent person having both -

(i)

the knowledge, skill and experience that may

reasonably be expected of a person carrying out

the same functions as are carried out by or

entrusted to that director in relation to the

company; and

(ii) the knowledge, skill and experience that the

director has;

(b) not make secret or personal profits from their position

without the consent of the company, nor make personal

gain from confidential company information;

(c) ensure that their personal interests do not conflict with

the interests of the company;

(d) not use any property, information or opportunity of the

company for their own or anyone else’s benefit, nor

obtain benefit in any other way in connection with the

exercise of their powers, except with the consent of the

company in general meeting or except as permitted by

the company’s memorandum or articles of association;

(e) exercise the powers they have for the purposes for

which the powers were conferred and shall not misuse

such powers.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 137 Directors. — COMPANIES ACT Open official source

(1) Every public company shall have at least two

directors.

(2) Every private company shall have at least one director, and

where a private company has one director, all references in this Act

to two or more directors shall be construed as references to such

one director.

(3) The business of a company shall be managed by the

directors who may exercise all such powers of the company,

including those specified in article 136, as are not by this Act or by

the memorandum or articles of the company, required to be

exercised by the company in general meeting.

(4) Notwithstanding anything contained in the memorandum

and articles of association relating to the manner in which the

representation of the company is to be exercised, anything done by

the board of directors of a company which exceeds the limits of

their authority or by any director which is beyond his powers, shall

be binding on the company unless that act exceeds the powers

granted to the board of directors or to a director, as the case may be,

by virtue of this Act.

(5) Any limitation on the powers of the board of directors or of

any director of the company shall not be relied on as against third

parties independently of whether that limitation, published or not,

arises from the memorandum or articles or from any resolution of

the general meeting or from a decision of the board of directors of

the company.

(6) Where an act of the company falls outside the company’s

objects, the company shall not be bound if it proves that, when the

act was done, the third party knew that it was outside the

company’s objects or the third party could not in view of the

circumstances have been unaware thereof

Provided that the publication of the memorandum and

articles of the company shall not in itself be sufficient to prove that

the third party knew, or could not have been unaware, that the act

was outside the company’s objects.

(7) If the number of directors of a company is reduced below

two any member of the company may at any time after the lapse of

thirty days therefrom, make an application to the court for the court

to appoint a director or directors for the company in accordance

with its memorandum and this without prejudice to the right of the

continuing director to fill any vacancy so created in accordance

with the provisions of article 140(6) within the thirty days specified

herein or at any time thereafter for as long as a director is not

appointed by the court.

(8) A person appointed by the court in accordance with the

provisions of sub-article (7) shall hold office until the next annual

general meeting although he shall be eligible for re-election.

(9) The provisions of sub-article (7) shall furthermore be

without prejudice to the provisions of article 140(1) to (5) and of

article 214(2)(b)(ii) and to the right of the company to fill any such

vacancy in general meeting.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 138 Company secretary. — COMPANIES ACT Open official source

(1) Every company shall have a company secretary.

(2)

No company shall

(a) have as company secretary its sole director;

(b) have as sole director of the company a body corporate

the sole director of which is company secretary to the

company.

(c) have as company secretary a body corporate, unless

such body corporate is duly registered as a company

service provider in terms of the Company Service

Providers Act

Provided that, for the purposes of this paragraph, a

body corporate which does not require registration in

terms of article 3(1)(a) and (b) of the Company

Service Providers Act may also act as a company

secretary in terms of this article.

(3) It shall be the duty of the directors of a company to take all

reasonable steps to ensure that the company secretary is an

individual who appears to them to have the requisite knowledge

and experience to discharge the functions of company secretary, or is

a body corporate as referred to in sub-article (2)(c).

(4) In the event that the post of company secretary becomes

vacant, the directors of the company shall, within fourteen days

from the date when the post becomes vacant, appoint another

individual, or a body corporate as referred to in sub-article (2)(c), to

fill the post.

(5) The directors of a company shall have the power to remove

the company secretary and they shall appoint another company

secretary within fourteen days from the date of such removal.

(6) Anything required or authorised to be done by or to the

company secretary may, if the office is vacant or if there is for any

other reason no company secretary capable of acting, be done by or

to any officer of the company authorised generally or specifically

in that behalf by the directors.

(7) A provision authorising a thing to be done by or to a

director and the company secretary is not satisfied by its being

done by or to the same person acting both as director and as, or in

place of, the company secretary.

(8) If default is made in complying with the provisions of sub-

article (4) every director of the company who is in default shall be

liable to a penalty, and for every day during which the default

continues, to a further penalty.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 139 Appointment of directors. — COMPANIES ACT Open official source

(1)

A person shall not be capable of being appointed

d i r e c t o r o f a c o m p a n y u nl e s s h e h a s p e r s o n a l l y s i g n e d t h e

memorandum indicating his consent to act as a director or has

otherwise signed and delivered to the Registrar for registration a

consent in writing to act as such director.

(2)

Without prejudice to the provisions of sub-article (1), where

a director is by the memorandum or articles of a company required to

hold a specified share qualification, he shall either sign the

memorandum for a number of shares not less than his qualification or

sign and deliver to the Registrar for registration an undertaking in

writing to take from the company and pay for his qualification shares

Provided that he shall vacate his office if he fails to obtain his

qualification within two months after his appointment, or such shorter

time as may be fixed by the memorandum or articles, or if at any time

thereafter he ceases to hold his qualification; and he shall be incapable

of being re-appointed director of the company until he has obtained his

qualification.

(3) Unless otherwise provided in the memorandum or articles

of a company, a director of a company other than the first directors

shall be appointed by ordinary resolution of the company in general

meeting.

(4) Where the holders of a particular class of shares have the

right to appoint one or more directors, in terms of the memorandum

and articles of the company, such appointment shall be made by a

member or members holding in the aggregate more than fifty per

cent in nominal value of the shares represented and entitled to vote

at the meeting of the holders of the shares of that class.

(5) Upon being appointed director of a company, such person shall

be required to declare to the Registrar, in the prescribed form, whether

he is aware of any circumstances which could lead to a disqualification

from appointment or to hold office as a director of a company under

the provisions of this Act or in another Member State.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 140 Removal of directors and casual vacancies. — COMPANIES ACT Open official source

(1) A company may remove a director before the

expiration of his period of office by a resolution taken at a general

meeting of the company and passed by a member or members

having the right to attend and vote, holding in the aggregate shares

entitling the holder or holders thereof to more than fifty per cent of

the voting rights attached to shares represented and entitled to vote

at the meeting.

(2) The provisions of sub-article (1) shall apply

notwithstanding anything in the company’s memorandum or

articles or in any agreement between it and the director.

(3) On receipt of a notice of an intended resolution to remove a

director under this article the company shall forthwith send a copy

thereof to the director concerned and the director, whether or not he

is a member of the company, shall be entitled to be heard on the

resolution at the meeting.

(4) A vacancy created by the removal of a director under this

article, if not filled at the meeting at which he is removed, may be

filled as a casual vacancy.

(5)

Nothing in this article shall be taken as -

(a) depriving a person removed hereunder of

compensation or damages payable to him in respect of

the termination of his appointment as director or of

any other appointment terminating with the

termination of his appointment as director; or

(b) derogating from any power to remove a director which

may exist apart from this article.

(6)

(a) Unless otherwise provided in the memorandum or

articles of a company, a casual vacancy may be filled

by the continuing director or directors, and without

prejudice to the aforesaid powers of the directors, it

may be filled by the company in general meeting.

(b) A person appointed by the directors to fill a casual

vacancy shall hold office until the next following

annual general meeting and shall be eligible for re-

election, but shall not be taken into account in

determining the directors who are to retire by rotation

at that meeting.

(c) A person appointed to fill a casual vacancy by the

company in general meeting shall be treated, for the

purpose of determining the time at which he or any

other director is to retire, as if he had become director

on the day on which the person in whose place he is

appointed was last appointed director.

(7)

Where the Registrar becomes aware that an officer of a

company is disqualified or does not hold a licence issued under the

Company Service Providers Act, where so required or unless

otherwise exempt in terms of the said Act or any other regulations

made or rules issued thereunder, the Registrar shall inform the company

and the company shall proceed to remove the director in accordance

with the provisions of this article and shall, within fourteen (14) days

from the date of removal, submit to the Registrar for registration the

statutory form notifying the removal of such officer.

(8)

If the company fails to remove such officer, the Registrar

shall file an application in court requesting the removal of such officer

from office.

(9)

The court shall, without delay, set down the application for

hearing at an early date, which date shall in no case be later than thirty

days from the date of the filing of the application. The court shall hear

the application to a conclusion within five working days from the date

fixed for the original hearing of the application, and no adjournment

shall be granted except either with the consent of both parties or for an

exceptional reason to be recorded by the court, and such adjourned

date shall not be later than that justified by any such reason. The

expenses shall be borne by the company.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 141 Representation of the company. — COMPANIES ACT Open official source

(1) Where for any reason the representation of a company

ceases to be vested in any person or persons, the company shall

appoint another person or persons to exercise such function. The

appointment shall be made by ordinary resolution taken at a general

meeting notice of which shall be issued within fourteen days from

the date when the vacancy occurs.

(2) The company may by ordinary resolution replace any

person or persons vested with the representation of the company.

(3) Where, and for as long as, the representation of a company

cannot be exercised in accordance with the memorandum of the

company, any director shall represent the company in judicial

proceedings against it.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 142 Disqualification for appointment as director or company secretary. — COMPANIES ACT Open official source

(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 an offence of money laundering

within the meaning of the Prevention of Money

Laundering Act, associate predicate offences to money

laundering and terrorist financing, or 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;

(e) such person is holding such office as a company

service provider in terms of the Company Service

Providers Act without having obtained the necessary

authorisation by the Malta Financial Services

Authority to provide such service.

(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.

(6) Apart from the disqualifications for appointment or to hold

office of a director of a company under the provisions of this Act, any

disqualification that is in force or information relevant for

disqualification in another Member State shall be taken into account

and the Registrar may refuse the appointment of a person as a director

of a company where, at the time, such person would be disqualified

from acting as a director in another Member State.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 143 Directors competing with company. — COMPANIES ACT Open official source

(1) A director of a company may not, in competition with

the company and without the approval of the same company given

at a general meeting, carry on business on his own account or on

account of others, nor may he be a partner with unlimited liability

in another partnership or a director of a company which is in

competition with that company.

(2) Where a director acts in violation of the prohibition

contained in this article, the company may, at its option, either take

action for damages and interest against him or demand payment of

any profits made by him in contravention of this article.

(3) The provisions of this article shall be without prejudice to

any other remedy which a company may have against a director for

breach of duty.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 144 Prohibition of loans, etc. to directors. — COMPANIES ACT Open official source

(1) It shall not be lawful for a company -

(a) to make a loan to any person who is its director or a

director of its parent company, or to enter into any

guarantee or provide any security in connection with a

loan made to such a person as aforesaid by any other

person

Provided that nothing in this paragraph shall apply

either -

(i)

to anything done, with the approval of the

company given at a general meeting, to provide

any such person as aforesaid with funds to meet

expenditure incurred or to be incurred by him

for the purposes of the company or for the

purpose of enabling him properly to perform his

duties as an officer of the company; or

(ii)

in the case of a company whose ordinary

business includes the lending of money or the

giving of guarantees in connection with loans

made by other persons, to anything done by the

company in the ordinary course of that business;

(b) to make to any director of the company any payment

by way of compensation for loss of office, or as

consideration for or in connection with his retirement

from office, without particulars with respect to the

proposed payment, including the amount thereof,

being disclosed to members of the company and the

proposal being approved by the company in general

meeting.

(2)

For the purposes of this article, the expression "director"

shall include any person in accordance with whose directives or

instructions the directors of a company are accustomed to act.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 145 Duty of director to disclose interest in a contract with company. — COMPANIES ACT Open official source

(1) It shall be the duty of a director of a company who is

in any way, whether directly or indirectly, interested in a contract

or proposed contract with the company to declare the nature of his

interest to the other directors either at the meeting of the directors

at which the question of entering into the contract is first taken into

consideration, or, if the director was not at the date of that meeting

interested in the contract or proposed contract, at the next meeting

of the directors held after he became so interested.

(2) Any director who fails to comply with the provisions of this

article shall be liable to a penalty.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 146 Return as to changes among directors, company secretary and in representation of company. — COMPANIES ACT Open official source

(1) Every company shall send to the Registrar for

registration a return of any change among its directors, or company

secretary or in the representation of the company, specifying the

date of the change, together with the name and residence or name,

registered office and registration number, as the case may be, of any new

director or company secretary, within fourteen days from the

happening thereof

Provided that the Registrar may, before registering the

return, take such steps and require such information as he may

deem necessary to ascertain the correctness of the return and to

determine whether the provisions of this Act have been complied

with

Provided further that the person appointed by an order of the

Court or by a competent authority as administrator, legal and, or

judicial representative or as the person de facto responsible for the

management and administration of a company shall, within fourteen

(14) days from said appointment, submit to the Registrar for

registration a return in the prescribed form specifying the date of

appointment, together with the name and residence or service address,

or name, registered office and registration number, as the case may be.

The said administrator, legal and, or judicial representative or person

de facto responsible for the management and administration of the

company shall, within fourteen (14) days from resigning or from being

removed from the said office, submit to the Registrar for registration a

return in the prescribed form.

(2) If default is made in complying with the provisions of sub-

article (1), every officer of the company who is in default shall be

liable to a penalty, and, for every day during which the default

continues, to a further penalty.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 147 Joint and several liability of directors for breach of duty. — COMPANIES ACT Open official source

(1) The personal liability of the directors in damages for

any breach of duty shall be joint and several

Provided that where a particular duty has been entrusted to

one or more of the directors, only such director or directors shall be

liable in damages.

(2) A director shall not be liable for the acts of his co-directors

if he proves either -

(a) that he did not know of the breach of duty before or at

the time of its occurrence and that on becoming aware

of it after its occurrence he signified forthwith to the

co-directors his dissent in writing; or

(b) that, knowing that the co-directors intended to commit

a breach of duty, he took all reasonable steps to

prevent it.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 148 Provisions as to liability of officers and auditors. — COMPANIES ACT Open official source

(1) Any provision, whether contained in the

memorandum or articles of a company or in any contract with a

company or otherwise for exempting any officer of the company or

any person engaged by the company as auditor from, or

indemnifying him against, any liability which by virtue of any rule

of law would in the absence thereof have been attached to him in

respect of negligence, default or breach of duty or otherwise of

which he may be guilty in relation to the company shall be void

Provided that a company may, in pursuance of any such

provision as aforesaid, indemnify any such officer or auditor

against any liability incurred by him in defending any proceedings

i n whi ch ju dgm en t is g iven i n hi s favou r o r in whi ch he i s

acquitted.

(2) Nothing in this article shall be construed as preventing or

restricting a company from purchasing and maintaining for any of

its officers insurance against any such liability as is referred to in

sub-article (1); or as preventing or restricting any officer or auditor

of a company from personally purchasing and maintaining any such

insurance.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 149 Minutes of proceedings. — COMPANIES ACT Open official source

(1) Every company shall cause minutes of all proceedings

of general meetings and all proceedings at meetings of its directors

to be entered in books kept for that purpose.

(2) Any such minute, if purporting to be signed by the

chairman of the meeting at which the proceedings were held, or by

the chairman of the next succeeding meeting, shall be evidence of

the proceedings.

(3) The books containing the minutes of proceedings of any

general meeting of a company shall be kept at the registered office

of the company, or at such other place as may be specified in the

memorandum or articles, and shall, during business hours, subject

to such reasonable restrictions as the company may by its articles

or in general meeting impose, be open to the inspection of any

member of the company without charge.

(4) If a company fails to comply with the requirements of sub-

articles (1) or (3), every officer of the company who is in default

shall be liable to a penalty.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 150 General duty of officers of a company. — COMPANIES ACT Open official source

Anything required to be done by a company under any

provision of this Act shall be deemed also to be required to be done

by the officers of the company.

Chapter IX - Auditors

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 151 Appointment of auditors. — COMPANIES ACT Open official source

(1) A company shall, at each general meeting at which

the annual accounts are laid, appoint an auditor or auditors to hold

office from the conclusion of that meeting until the conclusion of

the next general meeting at which such accounts are laid. The

company may appoint joint auditors and references in this Act to

auditor or auditors shall be deemed to include references to single

or joint auditors as the case may be.

(2) The first auditors of the company may be appointed by the

directors at any time before the first general meeting of the

company at which the annual accounts are laid, and the auditors so

appointed shall hold office until the conclusion of that meeting.

(3) If the directors fail to exercise their powers under sub-

article (2), the powers may be exercised by the company in general

meeting.

(4) If no auditors are appointed or re-appointed as required by

the foregoing sub-articles of this article, the court on an application

made by any of the directors or by any member of the company or

by the Registrar may appoint a person to fill the vacancy.

(5) In the case specified in sub-article (4), the company shall

within two weeks of the general meeting at which an auditor or

auditors should have been appointed by virtue of sub-article (1),

give notice to the Registrar that his power to apply to the court has

become exercisable.

(6) If a company fails to give the notice required by sub-articles

(5) or (9), every officer of the company who is in default shall be liable

to an administrative penalty and for every day during which the default

persists, to a further administrative penalty.

(7) Any contractual clause restricting the choice by the general

meeting of the company pursuant to sub-article (1) to certain

categories or lists of statutory auditors or audit firms as regards the

appointment of a particular statutory auditor or audit firm to carry

out the statutory audit of the company shall be prohibited. Any

such existing clause shall be null and void.

(8) For the purposes of the application of this article, for the

appointment of auditors or audit firms by public-interest entities,

the conditions set out in Article 16(2) to (6) of the Audit

Regulation, and those in the relative sectoral legislation regulating

each particular type of public-interest entity, shall apply.

(9) When the first auditor of the company is appointed and

whenever a new auditor is appointed following a resignation or

removal of a previous auditor, the company shall, within fourteen (14)

days from the said appointment, submit to the Registrar for

registration a return in the prescribed form, by means of which the

Registrar is notified with the name and surname and warrant

registration number of the appointed auditor.

151A.(1)(a)A public-interest entity shall appoint an auditor or an

audit firm for an initial engagement of at least one

year. The engagement may be renewed.

(b) Neither the initial engagement of a particular auditor

or audit firm by a public-interest entity, nor this in

combination with any renewed engagements therewith

shall exceed a maximum duration of ten years.

(2) After the expiry of the maximum durations of engagements

referred to in sub-article (1)(b), or after the expiry of the durations

of engagements extended in accordance with sub-articles (3) or (5),

neither the auditor or the audit firm nor, where applicable, any

members of their networks within the European Union shall

undertake the statutory audit of the same public-interest entity

within the following four-year period.

(3) By way of derogation from sub-article (1), the maximum

durations referred to in sub-article (1)(b) may be extended to the

maximum duration of twenty (20) years, where a public tendering

process for the statutory audit is conducted in accordance with

Article 16(2) to (5) of the Audit Regulation and takes effect upon

the expiry of the maximum durations referred to in sub-article

(1)(b).

(4) The maximum durations referred to in sub-article (1)(b)

shall be extended only if, upon a recommendation of the audit

committee, the board of directors proposes to the general meeting

o f t h e c o m p a n y, i n a c c o r d a n c e w i t h M a l t e s e l a w, t h a t t h e

engagement be renewed and that proposal is approved.

(5) After the expiry of the maximum durations referred to in

sub-article (1)(b), or in sub-article (3), as appropriate, the public-

interest entity may, on an exceptional basis, request that the Board

grant an extension to re-appoint the auditor or the audit firm for a

further engagement where the conditions in sub-article (3) are met.

Such an additional engagement shall not exceed two years.

(6)

(a) The key audit partners responsible for carrying out a

statutory audit shall cease their participation in the

statutory audit of the audited entity not later than

seven (7) years from the date of their appointment.

They shall not participate again in the statutory audit

of the audited entity before three years have elapsed

following that cessation.

(b) The auditor or the audit firm shall establish an

appropriate gradual rotation mechanism with regard to

the most senior personnel involved in the statutory

audit, including at least the persons who are registered

as auditors. The gradual rotation mechanism shall be

applied in phases on the basis of individuals rather

than of the entire engagement team. It shall be

proportionate in view of the scale and the complexity

of the activity of the auditor or the audit firm.

(c) The auditor or the audit firm shall be able to

demonstrate to the Board that such mechanism is

effectively applied and adapted to the scale and the

complexity of the activity of the auditor or the audit

firm.

(7)

(a) For the purposes of this article, the duration of the

audit engagement shall be calculated as from the first

financial year covered in the audit engagement letter

in which the auditor or the audit firm has been

appointed for the first time for the carrying-out of

consecutive statutory audits for the same public-

interest entity.

(b) For the purposes of this article, the audit firm shall

include other firms that the audit firm has acquired or

that have merged with it.

(c) If there is uncertainty as to the date on which the

auditor or the audit firm began carrying out

consecutive statutory audits for the public-interest

entity, for example due to firm mergers, acquisitions,

or changes in ownership structure, the auditor or the

audit firm shall immediately report such uncertainties

to the Board.

(8) As from 17 June 2020, a public-interest entity shall not

enter into or renew an audit engagement with a given auditor or

audit firm if that auditor or audit firm has been providing audit

services to that public-interest entity for twenty (20) and more

consecutive years as at 16 June 2014.

(9) As from 17 June 2023, a public-interest entity shall not

enter into or renew an audit engagement with a given auditor or

audit firm if that statutory auditor or audit firm has been providing

audit services to that public-interest entity for eleven (11) and more

but less than twenty (20) consecutive years as at 16 June 2014.

(10) Without prejudice to sub-articles (8) and (9), the audit

engagements that were entered into before 16 June 2014 but which

are still in place as at 17 June 2016 may remain applicable until the

end of the maximum duration referred to in sub-article (1)(b). Sub-

article (3) shall apply.

(11) Article 16(3) of the Audit Regulation shall only apply to

audit engagements after the expiry of the period referred to in sub-

article (1)(b).

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 152 Filling of casual vacancies. — COMPANIES ACT Open official source

(1) The directors shall at any time before the general

meeting of the company at which the annual accounts are laid fill a

casual vacancy in the office of auditor

Provided that the company in general meeting may fill such

a casual vacancy itself.

(2) While such a vacancy continues, any surviving or

continuing auditor or auditors may continue to act.

(3)

Where it is proposed -

(a) to appoint an auditor to fill a casual vacancy in the

office of auditor by resolution of the general meeting;

or

(b) to re-appoint by resolution of the general meeting a

retiring auditor who was appointed by the directors to

fill a casual vacancy, as auditor, or to appoint a new

auditor instead of that auditor,

notice specifying the terms of the proposed resolution shall be

given forthwith to the person proposed to be appointed and, if the

casual vacancy was caused by the resignation of an auditor, to the

auditor who resigned.

(4) Any director who fails to comply with the provisions of

sub-article (1) shall be liable to the same penalty as that provided

for in article 151(6).

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 153 Rules on auditor independence and professional ethics. — COMPANIES ACT Open official source

An auditor must at all times adhere to the rules on

independence and professional ethics set out in the Code of Ethics

and any other regulations, directives or guidelines issued from time

to time in terms of the Accountancy Profession Act.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 154 Right to information. — COMPANIES ACT Open official source

(1) The auditors of a company shall have a right of access

at all times to the company’s accounting records, accounts and

vouchers, and shall be entitled to require from the company’s

officers such information and explanations as they think necessary

for the performance of their duties as auditors.

(2) An officer of a company who knowingly or recklessly

makes to the company’s auditors a statement, whether written or

oral, which

(a) conveys or purports to convey any information or

explanations which the auditors require, or are entitled

to require, as auditors of the company; and

(b) is misleading, false or deceptive in a material

particular,

shall be guilty of an offence and liable on conviction to a fine

(multa) of not more than four thousand and six hundred and fifty-eight

euro (€4,658) or to imprisonment for a term not exceeding six months

or to both such fine and imprisonment.

(3) A subsidiary undertaking which is registered in Malta, and

the auditors of such an undertaking, shall give to the auditors of

any parent company of the subsidiary undertaking such information

and explanations as they may reasonably require for the purposes

of their d uties as auditors o f that com pany. If a subsidiary

undertaking fails to comply with the provisions of this sub-article,

every officer thereof who is in default shall be liable to a penalty;

and if an auditor fails without reasonable cause to comply with this

sub-article he shall be liable to a penalty.

(4) A parent company having a subsidiary undertaking which is

not registered in Malta shall, if required by its auditors to do so,

take all such steps as are reasonably open to it to obtain from the

subsidiary undertaking such information and explanations as they

may reasonably require for the purposes of their duties as auditors

of that company. If a parent company fails to comply with the

provisions of this sub-article, every officer of the company who is

in default shall be liable to a penalty.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 155 Right to attend company meetings. — COMPANIES ACT Open official source

A company’s auditors shall be entitled -

(a) to receive all notices of, and other communications

relating to, any general meeting which a member of

the company is entitled to receive;

(b) to attend any general meeting of the company; and

(c) to be heard at any general meeting which they attend

on any part of the business of the meeting which

concerns them as auditors.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 156 Remuneration of auditors. — COMPANIES ACT Open official source

(1) The remuneration of auditors appointed by the

company in general meeting shall be fixed by the company in

general meeting or in such manner as the company in general

meeting may determine. The remuneration of auditors appointed by

the directors or the court shall be fixed by the directors or the court

as the case may be.

(2) There shall be stated in the notes to the accounts the amount

of the remuneration of the company’s auditors in their capacity as

such; and where consolidated accounts are prepared, the notes to

the consolidated accounts shall state the total remuneration paid to

the auditors of the parent company in respect of all undertakings

included in the consolidation, and also the total remuneration paid

to all other auditors in respect of such undertakings.

(3) For the purposes of this article "remuneration" includes

sums paid in respect of expenses.

(4) The provisions of this article shall apply in relation to

benefits in kind as to payments in cash, and in relation to any such

benefit references to its amount are to its estimated money value.

The nature of any such benefit shall also be disclosed.

(5) There shall also be stated in the notes to the accounts

separately the total fees charged by the auditor for

(a) other assurance services;

(b) tax advisory services; and

(c) other non-audit services.

(6)

The provisions of sub-article (5) shall not apply

(a) where an undertaking is included within the

consolidated accounts of another undertaking and the

information required by sub-article (5) is provided in

the notes to such consolidated accounts; or

(b) to a company which on its balance sheet date does not

exceed the limits of two out of the three criteria set out in

article 185(1)(a). Notwithstanding the provisions of this

paragraph, the Accountancy Board established in terms

of the Accountancy Profession Act may request the

information specified in sub-article (5) to be delivered to

it within such period as it may establish for that purpose.

(7) The provisions of sub-article (6) shall not apply to a public

interest entity as defined in the Accountancy Profession Act.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 157 Removal of auditors. — COMPANIES ACT Open official source

(1) Notwithstanding

anything

in

a

company’s

memorandum or articles or in any other agreement, the company

may at any time remove an auditor from office in the same manner

as that specified in article 140(1)

Provided that an auditor may only be removed from office

as aforesaid if there is a proper ground for dismissal

Provided further that divergence of opinions on accounting

treatments or audit procedures shall not constitute a proper ground

for dismissal.

(2)

(a) Where a resolution removing an auditor is passed at a

general meeting of a company, the company shall

within fourteen days give notice thereof to the

Registrar for registration. The company shall also,

within the same period, deliver to the Board a

statement by the company giving an adequate

explanation of the reasons for the removal of the

auditor. If a company fails to give the aforesaid notice

to the Registrar or the aforesaid statement to the Board,

every officer of the company who is in default shall be

liable to a penalty in respect of each default, and for

every day during which the default continues, to a

further penalty.

(b) For the purposes of this sub-article, the Board shall

have the meaning assigned to it by the Accountancy

Profession Act.

(3) Nothing in this article shall be taken as depriving a person

removed under its provisions of compensation for damages payable

to him in respect of the termination of his appointment as auditor or

of any appointment terminating with that of auditor.

(4) An auditor of a company who has been removed shall have,

notwithstanding his removal, the rights conferred by article 155 in

relation to any general meeting of the company -

(a) at which his term of office would otherwise have

expired; or

(b) at which it is proposed to fill the vacancy caused by

his removal.

In such a ca se the r eferences i n tha t artic le t o matte r s

concerning the auditor as auditor shall be construed as references to

matters concerning him as a former auditor.

(5) In the case of a statutory audit of a public-interest entity, it

shall be permissible for -

(a) shareholders representing five per cent or more of the

voting rights or of the share capital of the company; or

(b) the Board referred to in sub-article (2),

to bring a claim before the court for the dismissal of the statutory

auditor(s) or the audit firm(s) where there are proper grounds for so

doing.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 158 Rights of auditors who are removed or not re- appointed. — COMPANIES ACT Open official source

(1) Notice specifying the text of and reasons for a

proposed resolution of a general meeting of a company whereby it

is intended to -

(a) remove an auditor before the expiration of his term of

office; or

(b) appoint as auditor a person other than a retiring

auditor;

shall be sent forthwith by the company to the person proposed to be

removed, to the person proposed to be appointed and to the retiring

auditor, as the case may be.

(2) The auditor proposed to be removed or, as the case may be,

the retiring au dito r m ay m ake wi th resp ect to the i ntended

resolution representations in writing to the company not exceeding

a reasonable length and request their notification to members of the

company.

(3) The company shall, unless the representations are received

by it too late for it to do so -

(a) in any notice of the resolution given to members of the

company, state the fact of the representations having

been made; and

(b) send a copy of the representations to every member of

the company to whom notice of the meeting is or has

been sent.

(4) If a copy of any such representations is not sent out as

required because it was received too late or because of the

company’s default, the auditor may, without prejudice to his right

to be heard orally, require that the representations be read out at the

meeting.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 159 Resignation of auditor. — COMPANIES ACT Open official source

(1) Without prejudice to the notification obligations in

terms of article 17 of the Accountancy Profession Act, an auditor of

a company may resign his office by depositing a notice in writing

to that effect at the company’s registered office. The notice shall

not be effective unless it is accompanied by the statement required

by article 161.

(2) An effective notice of resignation shall operate to bring the

auditor’s term of office to an end as of the date on which the notice

is deposited or on such later date as may be specified in it.

(3) The company shall within fourteen days of the deposit of a

notice of resignation give notice thereof to the Registrar for

registration. If default is made in complying with this sub-article,

every officer of the company who is in default shall be liable to a

penalty, and, for every day during which the default continues, to a

further penalty.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 160 Rights of resigning auditor. — COMPANIES ACT Open official source

(1) The provisions of this article shall apply where an

auditor’s notice of resignation is accompanied by a statement of

circumstances which he considers should be brought to the

attention of members or creditors of the company.

(2) The resigning auditor may deposit with the notice a signed

requisition calling on the directors of the company forthwith duly

to convene an extraordinary general meeting of the company for the

purpose of receiving and considering such explanation of the

circumstances connected with his resignation as he may wish to

place before the meeting.

(3) The resigning auditor may request the company to circulate

to its members -

(a) before the meeting convened on his requisition; or

(b) before any general meeting at which his term of office

would otherwise have expired or at which it is

proposed to fill the vacancy caused by his resignation;

a statement in writing of the circumstances connected with his

resignation as referred to in sub-article (1).

(4) The company shall, unless the statement is received too late

for it to comply -

(a) in any notice of the meeting given to members of the

company, state the fact of the statement having been

made; and

(b) send a copy of the statement to every member of the

company to whom notice of the meeting is or has been

sent.

(5) If the directors do not within twenty-one days from the date

of the deposit of a requisition under this article proceed duly to

convene a meeting for a day not more than twenty-eight days after

the date on which the notice convening the meeting is given, every

director who failed to take all reasonable steps to secure that a

meeting was convened as mentioned in sub-article (2) shall be

liable to a penalty.

(6) If a copy of the statement is not sent out as required

because it was received too late or because of the company’s

default, the auditor may, without prejudice to his right to be heard

orally, require that the statement be read out at the meeting.

(7) An auditor who has resigned has, notwithstanding his

resignation, the rights conferred by article 155 in relation to any

such general meeting of the company as is mentioned in sub-article

(3)(a) or (b), and, in such a case, the references in that article to

matters concerning the auditor as auditor shall be construed as

references to matters concerning him as a former auditor.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 161 Statement by person ceasing to hold office as auditor. — COMPANIES ACT Open official source

(1) Where an auditor ceases for any reason to hold office,

he shall deposit at the company’s registered office a statement of

any circumstances connected with his ceasing to hold office which

he considers should be brought to the attention of the members or

creditors of the company or, if he considers that there are no such

circumstances, a statement that there are none.

(2) In the case of resignation, the statement shall be deposited

along with the notice of resignation; in the case of failure to seek

re-appointment, the statement shall be deposited not less than

fourteen days before the general meeting at which auditors are to be

reappointed; in any other case, the statement shall be deposited not

later than the end of the period of fourteen days beginning with the

date on which the auditor ceases to hold office.

(3) Where the statement is of circumstances which the auditor

requests to be brought to the attention of the members or creditors

of the company, the company shall within fourteen days of the

deposit of the statement either -

(a) send a copy of it to every person who under article 180

is entitled to be sent copies of the annual accounts; or

(b) submit an application to the court for an order that

there are grounds of sufficient gravity to warrant that

the statement should not be circulated.

(4) Where the company submits an application to the court, the

court shall notify the auditor of the application and shall hear both

parties before making a decision on the company’s application.

(5) Unless the auditor receives notice of such an application

before the end of the period of twenty-one days beginning with the

day on which he deposited the statement, he shall within a further

seven days send a copy of the statement to the Registrar.

(6) If the court is satisfied that the auditor is using the

statement to secure needless publicity for defamatory matter -

(a) it shall direct that copies of the statement need not be

sent out; and

(b) it may further order the company’s costs on the

application to be paid in whole or in part by the

auditor, notwithstanding that he is not a party to the

application;

and the company shall within fourteen days of the court’s decision

send to the persons mentioned in sub-article (3)(a) a statement

setting out the effect of the order.

(7) If the court is not so satisfied, the company shall within

fourteen days of the court’s decision -

(a) send copies of the statement to the persons mentioned

in sub-article (3)(a); and

(b) notify the auditor of the court’s decision,

and the auditor shall within seven days of receiving such notice

send a copy of the statement to the Registrar.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 162 Failure to comply with article 161. — COMPANIES ACT Open official source

(1) If a person ceasing to hold office as auditor fails

without just cause to comply with the provisions of article 161 he

shall be liable to a penalty.

(2) In proceedings for a default under sub-article (1) it shall be

a defence for the person against whom action is taken to show that

he took all reasonable steps and exercised all due diligence to avoid

that default.

(3) If a company makes default in complying with the

provisions of article 161, every officer of the company who is in

default shall be liable to a penalty, and, for every day during which

the default continues, to a further penalty.

Chapter X - Accounts, Audit and Annual Return

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 163 Keeping of accounting records. — COMPANIES ACT Open official source

(1) In lieu of the requirements of articles 13 to 18 of the

Commercial Code a company shall be required to keep proper

accounting records with respect to -

(a) all sums of money received and expended by the

company and the matters in respect of which the

receipt and expenditure takes place;

(b) the assets and liabilities of the company;

(c) if the company’s business involves dealing in goods

(i)

statements of stocks held by the company at the

end of each accounting period of the company;

(ii)

all statements of stocktakings from which any

such statement of stocks as is mentioned in sub-

paragraph (i) has been or is to be prepared; and

(iii)

except in the case of goods sold by way of

ordinary retail trade, statements of all goods sold

and purchased, showing the goods and the

buyers and sellers in sufficient detail to enable

all these to be identified.

(2) For the purposes of sub-article (1), proper accounting

records shall be deemed to have been kept with respect to the

matters aforesaid if such records are sufficient to show and explain

the company’s transactions and are such as to -

(a) disclose with reasonable accuracy, at any time, the

financial position of the company at that time; and

(b) enable the directors to ensure that any balance sheet

and profit and loss account prepared under this

Chapter complies with the requirements of this Act.

(3) The accounting records shall be kept at the registered office

of the company or at such other place as the directors think fit, and

shall be at all times open to inspection by the officers of the

company

Provided that if accounting records are kept at a place

outside Malta there shall be sent to, and kept at a place in Malta and

at all times be open to the inspection of the officers of the company

such accounts and returns with respect to the business dealt with in

the accounting records so kept as will disclose with reasonable

accuracy the financial position of that business at intervals not

exceeding six months and will enable to be prepared, in accordance

with this Act, the company’s balance sheet and its profit and loss

account.

(4) A parent company which has a subsidiary undertaking, in

relation to which the above requirements do not apply, shall take

reasonable steps to secure that the subsidiary undertaking keeps

such accounting records as to enable the directors of the parent

company to ensure that any balance sheet and profit and loss

account prepared complies with the requirements of this Act.

(5) Notwithstanding the provisions of article 26 of the

Commercial Code, the accounting records of the company shall be

kept for a period of ten years

Provided that where the accounting records are kept in a

bound or unified form, the ten years shall commence to run from

the date of the last entry made therein.

(6) If a company fails to comply with any provision of sub-

articles (1) to (4), every officer of the company who is in default

shall be guilty of an offence and liable on conviction to a fine (multa)

of not more than eleven thousand and six hundred and forty-six euro

(€11,646), unless he shows that he acted diligently and that, in the

circumstances in which the company’s business was carried on, the

default was excusable.

(7) If a company fails to comply with the provisions of sub-

article (5), every officer of the company who is in default shall be

liable to a penalty.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 164 Accounting reference period and accounting reference date. — COMPANIES ACT Open official source

(1) A company’s accounting periods are determined by

reference to its accounting reference date.

(2) A company may give notice in the prescribed form to the

Registrar specifying a date in the calendar year as being its

accounting reference date

Provided that no such notice shall have effect unless it is

given before the end of nine months beginning with the date of the

company’s registration; and, failing such notice, the company’s

accounting reference date shall be the thirty-first of December.

(3) A company’s first accounting reference period shall be such

period ending with its accounting reference date as begins on the

date of its registration and is a period of not less than six months

and not more than eighteen months; and each successive period of

twelve months beginning after the end of the first accounting

reference period and ending with the accounting reference date

shall also be an accounting reference period of the company.

(4) A company’s first accounting period shall commence on the

first day of its first accounting reference period and shall end on a

date not more than seven days before or after the end of that

accounting reference period as the directors may determine.

Subsequent account ing periods shall comm ence on t he day

immediately following the company’s previous accounting period

and shall end on a date not more than seven days before or after the

end of the next accounting reference period as the directors may

determine.

C OM PA N I E S

(5) The directors of a parent company shall secure that, except

where there are good reasons against it, the accounting period of

each of its subsidiary undertakings shall coincide with the parent

company’s own accounting period.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 165 Alteration of accounting reference period. — COMPANIES ACT Open official source

(1) At any time during a period which is an accounting

reference period of a company by virtue of article 164 or 166 the

company may give notice in the prescribed form to the Registrar

specifying a date in the calendar year ("the new accounting

reference date") on which that accounting reference period ("the

current accounting reference period ") and each subsequent

accounting reference period of the company is to be treated as

coming to an end or, as the case may require, as having come to an

end.

(2) At any time after the end of a period which was an

accounting reference period of a company by virtue of article 164

or 166 the company may give notice in the prescribed form to the

R e g i s t r a r s p e c i f y i n g a d a t e i n t h e c a l e n d a r y e a r (" t h e n e w

accounting reference date") on which that accounting reference

period ("the previous accounting reference period") and each

subsequent accounting reference period of the company is to be

treated as coming or, as the case may require, as having come to an

end.

(3)

A notice under sub-article (2), shall, however -

(a) have no effect unless the company is a subsidiary

undertaking or parent company of another company

and the new accounting reference date coincides with

the accounting reference date of that other company;

and

(b) have no effect if the period allowed under article 182

for delivery of the annual accounts in relation to the

previous accounting period to be laid before the

company in general meeting has already expired at the

time when the notice is given.

(4) A notice under this article shall state whether the current or

previous accounting reference period of the company -

(a) is to be treated as shortened, so as to come to an end

or, as the case may require, be treated as having come

to an end on the new accounting reference date on the

first occasion on which that date falls or fell after the

beginning of that accounting reference period; or

(b) is to be treated as extended, so as to come to an end or,

as the case may require, be treated as having come to

an end on the new accounting reference date on the

second occasion on which that date falls or fell after

the beginning of that accounting reference period.

(5) A notice which states that the current or previous

accounting reference period is to be extended shall have no effect if

the current or previous accounting reference period, as extended in

accordance with the notice, would exceed eighteen months.

(6) Subject to any direction given by the Registrar under sub-

article (7), a notice which states that the current or previous

accounting reference period is to be extended shall have no effect

unless -

(a) no earlier accounting reference period of the company

has been extended by virtue of a previous notice given

by the company under this article; or

(b) the notice is given not less than five years after the

date on which any earlier accounting reference period

of the company which was so extended came to an

end; or

(c) the company is a subsidiary undertaking or parent

company of another undertaking and the new

accounting reference date coincides with the

accounting reference date of that other undertaking.

(7) The Registrar may, if he thinks fit, direct that the provisions

of sub-article (6) shall not apply to a notice already given by a

company under this article or, as the case may be, in relation to a

notice which may be so given.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 166 Consequence of giving notice under article 165. — COMPANIES ACT Open official source

(1) Where a company has given notice with effect in

accordance with article 165 and that notice has not been superseded

by a subsequent notice by the company which has such effect, the

new date specified in the notice shall be the company’s accounting

reference date in substitution for that which, by virtue of article 165

or this article, was its accounting reference date at the time when

the notice was given.

(2) Where by virtue of a notice as is referred to in sub-article

(1) one date is substituted for another as the accounting reference

date of a company -

(a) the current or previous accounting reference period,

shortened or extended, as the case may be, in

accordance with the notice; and

(b) each successive period of twelve months beginning

after the end of that accounting reference period, as so

shortened or extended, and ending with the new

accounting reference date,

shall be treated as having been an accounting reference period of

the company, instead of any period which would have been an

accounting reference period of the company if the notice had not

been given.

(3) The provisions of article 165 and the provisions of this

article shall not affect any accounting reference period of the

company which -

(a) in the case of a notice under article 165(1) is earlier

than the current accounting reference period; or

(b) in the case of a notice under article 165(2) is earlier

than the previous accounting reference period.

C OM PA N I E S

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 167 General provisions as to content and form of individual accounts. — COMPANIES ACT Open official source

(1) The directors of every company shall prepare for each

accounting period individual accounts comprising the balance sheet

as at the last day of the accounting period to which they refer, the

profit and loss account for that period, the notes to the accounts and

any other financial statements and other information which may be

required by generally accepted accounting principles and practice.

These documents shall constitute a composite whole. The name,

registration number, legal form and registered office address of the

company and where appropriate, the fact that the company is being

wound up shall be indicated in these accounts.

(2) The individual accounts shall be drawn up clearly in

accordance with generally accepted accounting principles and

practice and the provisions of this Act including, where applicable,

the requirements of the Third Schedule.

(3) The individual accounts shall give a true and fair view of

the undertaking’s assets, liabilities, financial position and profit or

loss. Where the application of this Act would not be sufficient to

give a true and fair view of the undertaking’s assets, liabilities,

financial position and profit or loss, such additional information as

is necessary to comply with that requirement shall be given in the

notes to the financial statements.

(4)

Deleted by Act XVIII.2025.18.

(5) Where in exceptional cases the application of a provision of

this Act is incompatible with the obligation for the individual

accounts to give a true and fair view, that provision shall be

departed from in order to give a true and fair view. Any such

departure shall be disclosed in the notes to the accounts together

with an explanation of the reasons for it and a statement of its

effect on the assets, liabilities, financial position and profit or loss.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 168 Annual accounts of certain types of undertakings. — COMPANIES ACT Open official source

(1) The provisions of this Chapter and the Schedules

enacted under it shall apply only to the extent that they are not

inconsistent with, or contradicted by provisions on the financial

reporting of certain types of undertakings or provisions regarding

the distribution of an undertaking’s capital which are laid down in

other legislative acts in force in Malta.

(2) Banks and financial institutions shall follow the Banking

Rules and Financial Institutions Rules issued by the relevant

competent authority under the Banking Act and the Financial

Institutions Act, respectively, in relation to the form and content of

their annual accounts and any other Rules issued by the competent

authority in this regard.

(3) Insurance and reinsurance undertakings shall comply with

any Insurance Rules made under the Insurance Business Act in

respect of their annual accounts.

(4) Special provisions may be prescribed by the Minister by

notice in the Gazette for the annual accounts of investment

companies with fixed share capital in lieu of the provisions of the

Third Schedule.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 169 Accounts of investment company with variable capital. — COMPANIES ACT Open official source

(1) An investment company with variable share capital

shall prepare its individual accounts in accordance with the format

set out in the Fifth Schedule.

(2) The director’s report of an investment company with

variable share capital shall provide information sufficient to enable

investors to make an informed judgment on the development of the

company’s activities and its financial performance.

(3) In all other respects, the annual accounts and director’s

report of an investment company with variable share capital shall

be prepared in accordance with the provisions applicable to

companies generally to the extent that they are not inconsistent

with the provisions of the preceding sub-articles of this article and

the Fifth Schedule.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 170 Duty to prepare consolidated accounts. — COMPANIES ACT Open official source

(1) If at the end of an accounting period a company is a

parent company the directors shall, as well as preparing the

individual accounts for that company, also prepare consolidated

accounts.

(2) A parent company and all of its subsidiary undertakings

shall be undertakings to be consolidated regardless of where the

r e g i s t e r e d o ff i c e s o r p r i n c i p a l o ff i c e s o f s u c h s u b s i d i a r y

undertakings are situated.

(3) A subsidiary undertaking may be excluded from

consolidation if its inclusion is not material for the purpose of

giving a true and fair view; but two or more subsidiary

undertakings may be excluded only if their inclusion is not material

when taken together.

(4) A subsidiary

undertaking

may

be

excluded

from

consolidation where -

(a) severe long-term restrictions substantially hinder the

exercise of the rights of the parent company over the

assets or management of that undertaking; or

(b) the interest of the parent company is held exclusively

with a view to subsequent resale and the undertaking

has not previously been included in consolidated

accounts prepared by the parent company; or

(c) in extremely rare cases, where the information

necessary for the preparation of consolidated accounts

in accordance with the provisions of this Act cannot be

obtained without disproportionate expense or undue

delay.

The reference in paragraph (a) to the rights of the parent

company and the reference in paragraph (b) to the interest of the

parent company are, respectively, to rights and interests held by or

attributed to the company for the purposes of article 2(2) in the

absence of which it would not be the parent company.

(5) Where all the subsidiary undertakings of a parent company

fall within the above exclusions, no consolidated accounts shall be

required.

C OM PA N I E S

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 171 Form and content of consolidated accounts. — COMPANIES ACT Open official source

(1) Consolidated

accounts

shall

comprise

the

consolidated balance sheet as at the last day of the accounting

period to which these refer, the consolidated profit and loss account

for that period, the notes to the consolidated accounts and any other

financial statements which may be required by generally accepted

ac cou nti ng p ri nci pl es an d practice. T hese d ocuments sha ll

constitute a composite whole.

(2) Without prejudice to articles 170, 173 and 174, and to the

provisions of article 2(2) and the Ninth Schedule, insofar as may be

relevant to articles 170, 173 and 174, the consolidated accounts

shall be drawn up in accordance with generally accepted

accounting principles and practice and the provisions of this Act

includi ng, where applicable, the requ irements of the Third

Schedule

Provided that the disclosure in indent (ii) of sub-paragraph

(1) of paragraph 3 of Part I of the Third Schedule shall apply to the

consolidated accounts as if the undertakings included in the

consolidation were a single company and the disclosures in indents

(iv) and (vi) of sub-paragraph (1) of paragraph 2 of Part II of the

Third Schedule shall apply to the consolidated accounts.

(3) Consolidated accounts shall give a true and fair view of the

assets, liabilities, financial position and profit or loss of the

u n d e r t a k i n g s i n c l u d e d t h e r e i n t a k e n a s a w h o l e . Where the

application of the provisions of this Act would not be sufficient to give

a true and fair view of the assets, liabilities, financial position and

profit or loss of the undertakings included therein taken as a whole,

such additional information as is necessary to comply with such

requirement shall be given in the notes to the consolidated financial

statements.

(4)

Deleted by Act XVIII.2025.18.

(5) Where in exceptional cases the application of a provision of

this Act is incompatible with the obligation for the consolidated

accounts to give a true and fair view, that provision shall be

departed from in order to give a true and fair view. Any such

departure shall be disclosed in the notes to the consolidated

accounts together with an explanation of the reasons for it and a

statement of its effect on the assets, liabilities, financial position

and profit and loss.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 172 Responsibility and liability for drawing up and publishing the financial statements and the directors’ report. — COMPANIES ACT Open official source

The directors of a company, acting within the competences

assigned to them by law, have collective responsibility for ensuring

that

(a) the annual financial statements, the directors’ report

and, when provided separately, the corporate

governance statement and the remuneration report; and

(b) the consolidated financial statements, consolidated

directors’ reports, and when provided separately, the

consolidated corporate governance statement and the

remuneration report,

are drawn up and published in accordance with the requirements of

this Act.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 173 Consolidated accounts - size exemption. — COMPANIES ACT Open official source

A parent company shall be exempt from the requirements

to prepare consolidated accounts if as at its balance sheet date the

undertakings to be consolidated do not together, on the basis of

their latest individual accounts, exceed the limits of two of the

three criteria laid down in article 185(5)

Provided that none of the undertakings to be consolidated is

a company the securities of which have been admitted to trading on

a regulated market or on an equivalent market in a non-Member

State or non-EEA State

Provided further that none of the group companies is a

public-interest entity.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 174 Exemption for parent companies included in accounts of larger groups. — COMPANIES ACT Open official source

(1) A parent company shall be exempt from the

requirement to prepare consolidated accounts if it is itself a

subsidiary company in the following cases -

(a) where the said parent company is a wholly-owned

subsidiary company of an immediate parent company

formed and registered under the law of a Member State

or an EEA State; or

(b) where more than fifty per cent in nominal value of the

shares in the said parent company are held by a parent

company and notice requesting the preparation of

consolidated accounts has not been served on the first

mentioned company by shareholders holding in the

aggregate not less than ten per cent in nominal value of

all the shares thereof. Such notice shall not be valid

unless it is served not later than six months after the

commencement of the accounting period to which it

relates.

(2) The exemption referred to in sub-article (1) shall be

conditional upon compliance with all of the following

requirements -

(a) that in the case of a parent company which is itself a

subsidiary company of a parent company formed and

registered under the law of a Member State or an EEA

State, such company is included in consolidated

accounts for a larger group drawn up to the same date,

or to an earlier date in the same accounting period, by

a parent company formed and registered under the law

of a Member State or an EEA State;

(b) that in the case of a parent company which is itself a

subsidiary company of a parent undertaking not

registered under the law of a Member State or an EEA

State, the exempted undertaking is included in

consolidated accounts for a larger group drawn up to

the same date, or to an earlier date in the same

accounting period, provided such consolidated

accounts and the director’s report thereon are drawn up

in a manner equivalent to that required by this Act and

C OM PA N I E S

have been audited by one or more persons authorised

to audit accounts under the national law governing the

undertaking which drew them up;

(c) that the said parent company discloses in its individual

accounts that it is exempt from the obligation to

prepare and deliver consolidated accounts;

(d) that the said parent company states in its individual

accounts the name and registered office of the parent

undertaking which draws up the consolidated accounts

referred to in paragraph (a) or (b);

(e) that the said parent company delivers to the Registrar

within the period allowed for delivering its individual

accounts, copies of the consolidated accounts referred

to in paragraph (a) or (b), and of the parent

undertaking’s directors’ report or its equivalent,

together with the auditors’ report on those

consolidated accounts; and

(f)

that if any document comprised in accounts and

reports delivered in accordance with paragraph (e) is in

a language other than Maltese or English, there is

annexed to the copy of that document a translation of it

into Maltese or English, certified to be a correct

translation in such manner as may be prescribed.

(3) The exemption shall not apply to a parent company any of

whose transferable securities have been admitted to trading on a

regulated market or on an equivalent market in a non-Member State

or non-EEA State.

(4) Shares held by directors of a company for the purpose of

complying with any share qualification requirement shall be

disregarded in determining for the purposes of sub-article (1)(a)

whether the company is a wholly-owned subsidiary company.

(5) For the purposes of sub-article (1)(b) shares held by a

wholly-owned subsidiary undertaking of the parent undertaking, or

held on behalf of the parent company or a wholly-owned subsidiary

undertaking, shall be attributed to the parent company.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 175 Disclosure required in notes to accounts. — COMPANIES ACT Open official source

(1) Individual accounts prepared in terms of article 167

shall, in the notes to the accounts, disclose the information required by

generally accepted accounting principles and practice together with

such other information required to be disclosed therein by this Act.

(2) Consolidated accounts prepared in terms of article 170

shall, in the notes to the accounts, disclose the information required

by generally accepted accounting principles and practice together

with such other information required to be disclosed therein by this

Act.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 176 Approval and signing of annual accounts. — COMPANIES ACT Open official source

(1) A company’s annual accounts shall be approved by

the board of directors and the balance sheet shall be dated and

signed on behalf of the board by two directors of the company.

(2)

Every copy of the balance sheet which is laid before the

company in general meeting, or which is otherwise circulated,

published or issued, shall state the name of the directors who

signed the balance sheet on behalf of the board.

(3) The copy of the company’s balance sheet which is delivered

to the Registrar shall be signed on behalf of the board by the same

directors who signed the balance sheet pursuant to sub-article (1)

Provided that without prejudice to this sub-article, when a

copy of the company’s balance sheet is submitted to the relevant

competent authority as part of the company’s reporting obligations in

conformity with the European Single Electronic Format reporting

standard, in conformity with the Commission Delegated Regulation

(EU) 2019/815 of 17 December 2018 supplementing Directive 2004/

109/EC of the European Parliament and of the Council with regard to

regulatory technical standards on the specification of a single

electronic reporting format, such copy shall be transmitted to the

Registrar by means of an application programming interface or by

similar electronic means.

(4) If annual accounts are approved which do not comply with

the provisions of this Act, every director of the company who is

party to their approval and who knows that they do not comply or is

negligent as to whether they comply shall be liable to a penalty. For

this purpose every director of the company at the time the accounts

are approved shall be taken to be a party to their approval unless he

proves that he took all reasonable steps to prevent their being

approved.

(5)

If a copy of the annual accounts -

(a) is laid before the company, or otherwise circulated,

published or issued, without having been signed as

required by this article or without the required

statement of the signatory’s name being included; or

(b) is delivered to the Registrar without being signed as

required by this article,

every officer of the company who is in default shall be liable to a

penalty.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 177 Contents of the directors’ report. — COMPANIES ACT Open official source

(1) For each accounting period the directors shall prepare

a report, hereinafter referred to as "the directors’ report".

(2) The directors’ report shall state the names of the persons

who, at any time during the accounting period, were directors of the

c o m p a n y, t h e p r i n c i p a l a c t i v i t i e s o f t h e c o m p a n y a n d i t s

subsidiaries in the course of the accounting period and any

significant change in those activities during such period, and a fair

review of the development of the business of the company and its

subsidiaries during the accounting period, and of their position at

the end of that period together with a description of the principal

risks and uncertainties that they face.

The review shall be a balanced and comprehensive analysis

of the development and performance of the undertaking’s business

and of its position, consistent with the size and complexity of the

business.

C OM PA N I E S

To the extent necessary for an understanding of the

undertaking’s development, performance or position, the analysis

shall include both financial and, where appropriate, non-financial

key performance indicators relevant to the particular business,

including information relating to environmental and employee

matters. In providing the analysis, the directors’ report shall, where

appropriate, include references to, and additional explanations of,

amounts reported in the annual financial statements.

(3) The directors’ report shall furthermore comply with the

Sixth Schedule as regards the disclosure of the matters mentioned

therein.

(4) In the case of default in complying with the provisions of

this article, every person who was a director of the company

immediately before the end of the period for laying annual accounts

for the relevant accounting period shall be liable to a penalty. In

proceedings against a person under this sub-article, it shall be a

defence for him to prove that he took all reasonable steps for

securing compliance with the requirements of this article.

(5) Where consolidated accounts are required under this Act, the

consolidated directors’ report shall, as a minimum, in addition to any

other information required under other provisions of this Act, set

out the information required by this article and the Sixth Schedule,

taking account of the essential adjustments resulting from the

particular characteristics of a consolidated directors’ report as

compared to a directors’ report in a way which facilitates the

assessment of the position of the undertakings included in the

consolidation taken as a whole.

(6) Where a consolidated directors’ report is required in

addition to the directors’ report, the two reports may be presented

as a single report.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 178 Approval and signing of directors’ report. — COMPANIES ACT Open official source

(1) The directors’ report shall be approved by the board

of directors and dated and signed on behalf of the board by two

directors of the company.

(2) Every copy of the directors’ report which is laid before the

company in general meeting, or which is otherwise circulated,

published or issued, shall state the name of the person who signed it

on behalf of the board.

(3) The copy of the directors’ report which is delivered to the

Registrar shall be signed and dated on behalf of the board by a

director or the company secretary of the company

Provided that without prejudice to this sub-article, when a

copy of the directors’ report is submitted to the relevant competent

authority as part of the company’s reporting obligations under the

European Single Electronic Format reporting standard, in conformity

with the Commission Delegated Regulation (EU) 2019/815 of 17

December 2018 supplementing Directive 2004/109/EC of the

European Parliament and of the Council with regard to regulatory

technical standards on the specification of a single electronic reporting

format, such copy shall be transmitted to the Registrar by means of an

application programming interface or by similar electronic means.

(4)

If a copy of the directors’ report -

(a) is laid before the company, or otherwise circulated,

published or issued, without the report having been

signed as required by this article or without the

required statement of the signatory’s name being

included; or

(b) is delivered to the Registrar without being signed as

required by this article,

every officer of the company who is in default shall be liable to a

penalty.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 179 Auditors’ report. — COMPANIES ACT Open official source

(1) A company’s auditors shall make a report to the

company’s members on all annual accounts of the company of

which copies are to be laid before the company in general meeting

during their tenure of office.

(2) The auditors’ report shall be drawn up in accordance with

generally accepted auditing standards and shall state whether in the

auditors’ opinion the annual accounts have been properly prepared

in accordance with this Act, and in particular whether a true and

fair view is given -

(a) in the case of an individual balance sheet, of the state

of affairs of the company as at the end of the

accounting period;

(b) in the case of an individual profit and loss account, of

the profit or loss of the company for the accounting

period;

(c) in the case of consolidated accounts, of the state of

affairs as at the end of the accounting period, and the

profit or loss for the accounting period, of the

undertakings included in the consolidation as a whole,

so far as concerns members of the company.

(3) The auditors shall consider whether the information given

in the directors’ report for the accounting period for which the

annual accounts are prepared is consistent with those accounts; and

if they are of the opinion that it is not they shall state that fact in

their report.

The auditors shall also

(a) express an opinion on whether the directors’ report has

been prepared in accordance with the applicable legal

requirements;

(b) state whether, in the light of the knowledge and

understanding of the undertaking and its environment

obtained in the course of the audit, they have identified

material misstatements in the directors’ report, and

shall give an indication of the nature of any such

misstatements

Provided that the requirement mentioned in paragraphs (a)

and (b) shall not apply to the non-financial information to be

disclosed in accordance with paragraphs 8 and 11 of the Sixth

Schedule, but the auditors shall check whether such information is

provided.

(4) The audit report shall comply with the provisions of article

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 179A — COMPANIES ACT Open official source

(5) Every copy of the auditors’ report which is laid before the

company in general meeting, or which is otherwise circulated,

published or issued, shall state the names of the auditors.

(6) The copy of the auditors’ report which is delivered to the

Registrar shall state the names of the auditors and be signed by

them

Provided that without prejudice to this sub-article, when a

copy of the auditors’ report is submitted to the relevant competent

authority as part of the company’s reporting obligations in conformity

with the European Single Electronic Format reporting standard, in

accordance with Commission Delegated Regulation (EU) 2019/815 of

17 December 2018 supplementing Directive 2004/109/EC of the

European Parliament and of the Council with regard to regulatory

technical standards on the specification of a single electronic reporting

format, such copy shall be transmitted to the Registrar by means of an

application programming interface or by similar electronic means.

(7)

If a copy of the auditors’ report -

(a) is laid before the company, or otherwise circulated,

published or issued, without the required statement of

the auditors’ names; or

(b) is delivered to the Registrar without the required

statement of the auditors’ names or without being

signed as required by this article,

every officer of the company who is in default shall be liable to a

penalty.

(8) References in this article to signature by the auditors are,

where the office of auditor is held by an audit firm, to the signature

of a principal authorised to sign on behalf of such audit firm.

(9) A company’s auditors shall, in preparing their report, carry

out such investigations as will enable them to form an opinion as

to -

(a) whether proper accounting records have been kept by

the company and proper returns adequate for their

audit have been received from branches not visited by

them, and

(b) whether the company’s individual accounts are in

agreement with the accounting records and returns.

(10) If the auditors are of the opinion that proper accounting

records have not been kept, or that proper returns adequate for their

audit have not been received from branches not visited by them, or

if the company’s individual accounts are not in agreement with the

accounting records and returns, the auditors shall state that fact in

their report.

(11) If the auditors are unable to obtain all the information and

explanations which, to the best of their knowledge and belief, are

necessary for the purpose of their audit, they shall state that fact in

their report.

(12) In this article "audit firm", "generally accepted auditing

standards" and "principal", shall have the meaning assigned to them

in the Accountancy Profession Act or regulations issued in terms

thereof.

(13) The audit report on the consolidated financial statements

shall comply with the requirements set out in this article and in

article 179A. In reporting on the consistency of the directors’

report and the financial statements the auditor or audit firm shall

consider the consolidated financial statements and the consolidated

directors’ report. Where the annual financial statements of the

parent undertaking are attached to the consolidated financial

statements, the audit reports required by this article may be

combined.

179A. (1) The audit report shall be in writing and shall

(a) identify the entity whose annual or consolidated

financial statements are the subject of the statutory

audit; specify the annual or consolidated financial

statements and the date and period they cover; and

identify the financial reporting framework that has

been applied in their preparation;

(b) include a description of the scope of the statutory audit

which shall, as a minimum, identify the auditing

standards in accordance with which the statutory audit

was conducted;

(c) include an audit opinion, which shall be either

unqualified, qualified or an adverse opinion and shall

state clearly the opinion of the auditor(s) or the audit

firm(s) as to

(i)

whether the annual financial statements give a

true and fair view in accordance with the

relevant financial reporting framework; and

(ii) where appropriate, whether the annual financial

statements comply with statutory requirements.

If the statutory auditor(s) or the audit firm(s) are

unable to express an audit opinion, the report shall

contain a disclaimer of opinion;

(d) refer to any other matters to which the auditor(s) or the

audit firm(s) draw(s) attention by way of emphasis

without qualifying the audit opinion;

(e) include an opinion and statement, both of which shall

be based on the work undertaken in the course of the

audit, referred to in article 179(3);

(f)

provide a statement on any material uncertainty

relating to events or conditions that may cast

significant doubt about the entity’s ability to continue

as a going concern;

(g) identify the place of establishment of the auditor(s) or

the audit firm(s).

(2) Where the statutory audit was carried out by more than one

auditor or audit firm, the auditor(s) or the audit firm(s) shall agree

on the results of the statutory audit and submit a joint report and

opinion. In the case of disagreement, each statutory auditor or audit

firm shall submit his, her or its opinion in a separate paragraph of

the audit report and shall state the reason for the disagreement.

(3) The audit report shall be signed and dated by the auditor.

Where an audit firm carries out the statutory audit, the audit report

shall bear the signature of at least the auditor(s) carrying out the

statutory audit on behalf of the audit firm. Where more than one

auditor or audit firm have been simultaneously engaged, the audit

report shall be signed by all auditors or at least by the auditors

carrying out the statutory audit on behalf of every audit firm

Provided that the audit report may also be co-signed by an

auditor authorised in another Member State as long as he/she/it is a

member of the same network and has obtained the prior written

consent of the Board.

(4) Without prejudice to the provisions of sub-articles (1) to

(3), and articles 179 and 179B, the scope of the statutory audit shall

not include assurance on the future viability of the audited entity or

on the efficiency or effectiveness with which the management or

the board of directors has conducted or will conduct the affairs of

the entity.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 179B Audit report. — COMPANIES ACT Open official source

(1) The audit report of public-interest entities shall be

prepared in accordance with the provisions of articles 179 and

179A and in addition shall at least

(a) state by whom or by which body the auditor(s) or the

audit firm(s) was (were) appointed;

(b) indicate the date of the appointment and the period of

total uninterrupted engagement including previous

renewals and reappointments of the auditors or the

audit firms;

(c) provide, in support of the audit opinion, the following

(i)

a description of the most significant assessed

risks of material misstatement, including

assessed risks of material misstatement due to

fraud;

(ii) a summary of the auditor’s response to those

risks; and

(iii) where relevant, key observations arising with

respect to those risks.

Where relevant to the above information provided in

the audit report concerning each significant assessed

risk of material misstatement, the audit report shall

include a clear reference to the relevant disclosures in

the financial statements;

(d) explain to what extent the statutory audit was

considered capable of detecting irregularities,

including fraud;

(e) confirm that the audit opinion is consistent with the

additional report to the audit committee referred to in

Article 11 of the Audit Regulation;

(f) declare that the prohibited non-audit services referred

to in article 18A(1) of the Accountancy Profession Act

were not provided and that the auditor(s) or the audit

firm(s) remained independent of the audited entity in

conducting the audit;

(g) indicate any services, in addition to the statutory audit,

which were provided by the auditor or the audit firm to

the audited entity and its controlled undertaking(s),

and which have not been disclosed in the directors’

report or financial statements.

(2) Except as required by sub-article (1)(e) the audit report

shall not contain any cross-references to the additional report to the

audit committee referred to in Article 11 of the Audit Regulation.

The audit report shall be in clear and unambiguous language.

(3) The statutory auditor or the audit firms shall not use the

name of any competent authority in a way that would indicate or

suggest endorsement or approval by that authority of the audit

report.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 180 Persons to whom a copy of the accounts of a company are to be sent. — COMPANIES ACT Open official source

(1) In the case of every company, a copy of the annual

accounts of a company for the accounting period shall, not less than

fourteen days before the date of the meeting at which they are to be

laid in accordance with the provisions of article 181, be sent to

each of the following persons

(a) every member of the company;

(b) every holder of the company’s debentures; and

(c) all other persons who are entitled to receive notice of

general meetings.

(2) Notwithstanding the provisions of sub-article (1), copies of

the annual accounts shall, unless otherwise provided in the

memorandum or articles, not be required to be sent to

(a) a debenture holder who is not entitled to receive

notices of general meetings; and

(b) members of a company who have been duly given

notice of a general meeting of the company at which

the company’s annual accounts shall be laid in

accordance with article 181, and where the company

has made available to its members an electronic copy

of such annual accounts, either on its website or

otherwise, and has informed its members accordingly

Provided that the company shall provide a printed copy of

such annual accounts to any member upon written request.

(3) If copies of the annual accounts are sent less than fourteen

days before the date of the meeting, they shall, notwithstanding that

fact, be deemed to have been duly sent if it is so agreed by all the

members entitled to attend the meeting who received them late.

(4) If default is made in complying with sub-article (1), the

company and every officer who is in default shall be liable to a

penalty.

(5) Any member of the company and any holder of the

company’s debentures, whether or not such holder is entitled to

have sent to him copies of the company’s annual accounts, shall be

entitled to be furnished, on demand and without charge, with a

copy of the last annual accounts laid before the company in general

meeting.

(6) If, when a person makes a demand for a document with

which he is entitled by this article to be furnished, every officer of

the company who defaults in complying with the demand within

seven days after its making, shall be liable to a penalty, and, for

every day during which the default continues, to a further penalty.

(7) For the purposes of this article, reference to the term

"annual accounts" shall include the directors’ report as specified in

article 177 and the auditors’ report as specified in article 179.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 181 Directors to lay accounts before the general meeting. — COMPANIES ACT Open official source

(1) In respect of each accounting period of a company the

directors shall lay before the company in general meeting for its

approval copies of the annual accounts of the company for that

period. There shall be annexed to the annual accounts, the auditors’

report as specified in article 179 and the directors’ report as

specified in article 177.

(2) The auditors’ report shall be read before the company in

general meeting, and be open to the inspection of any member of

the company.

(3) If default is made in complying with the provisions of sub-

article (1), or if the annual accounts laid before the company do not

comply with the provisions of this Act, every person who

immediately before the end of the period for laying such accounts

was a director of the company shall be liable to a penalty and, for

every day during which the default continues, to a further penalty.

(4) It shall be a defence for a person charged under sub-article

(3) to prove that he took all reasonable steps for securing that the

requirements of sub-article (1) would be complied with before the

end of the period for laying of annual accounts. It shall not be a

defence to prove that the document or documents in question were

not in fact prepared as required by this Act.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 182 Period for laying and approval of accounts. — COMPANIES ACT Open official source

(1) The period allowed for laying before and approval by

the company in general meeting of a company’s annual accounts

for an accounting period shall be as provided in this article.

(2) Subject to the following sub-articles of this article, the

period allowed shall be -

(a) for a private company, ten months after the end of the

relevant accounting reference period; and

(b) for a public company, seven months after the end of

that period.

(3) Where a company’s first accounting period is a period of

more than twelve months from the date of its registration, the

period otherwise allowed for laying before and approval by the

company in general meeting of annual accounts shall be reduced by

the number of days by which the relevant accounting period is

longer than twelve months. However, the period allowed shall not

by this provision be reduced to less than three months after the end

of that accounting period.

(4) Where a company’s relevant accounting period has been

shortened due to a change in the accounting reference date, the

period allowed for laying and delivering annual accounts shall be -

(a) the period allowed in accordance with sub-articles (2)

and (3); or

(b) the period of three months beginning with the date of a

notice given to the Registrar when notice has been

given to change the accounting reference date,

whichever of those periods last expires.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 183 Copies of accounts to be provided to Registrar. — COMPANIES ACT Open official source

(1) The company directors shall deliver to the Registrar

for registration a copy of the company’s annual accounts laid

before the company in general meeting in accordance with article

181 together with a copy of the auditors’ report thereon, and the

directors’ report accompanying the annual accounts within forty-

two days from the end of the period for laying of annual accounts

prescribed by article 182. Where a copy of the annual accounts,

auditors’ report and directors’ report is delivered to the Registrar by

electronic means, without prejudice to the requirements of articles

176(3), 178(3) and 179(6), such electronic copy shall be authenticated

in accordance with article 82

Provided that without prejudice to this sub-article, when a

copy of the annual accounts, auditors’ report and directors’ report is

submitted to the relevant competent authority as part of the company’s

reporting obligations in accordance with the European Single

Electronic Format reporting standard, in accordance with Commission

Delegated Regulation (EU) 2019/815 of 17 December 2018

supplementing Directive 2004/109/EC of the European Parliament and

of the Council with regard to regulatory technical standards on the

specification of a single electronic reporting format, such copy shall be

transmitted to the Registrar by means of an application programming

interface or by similar electronic means.

(2) A company which qualifies as a small company in terms of

article 185(1) need not deliver to the Registrar the directors’ report

Provided that where the company which qualifies as a small

company is a private company having the status of an exempt

company, it need not deliver to the Registrar the directors’ report

and the profit and loss account

Provided further that where the exempt company also

qualifies in terms of article 185(2), it need also not deliver to the

Registrar an auditors’ report.

(3) Where the directors of a company take advantage of any of

the exemptions conferred by sub-article (2), a declaration on the

prescribed form signed by the same directors who signed the

balance sheet shall, together with the annual accounts, be delivered

to the Registrar confirming that the company qualifies for the

exemption or exemptions.

(4) Where a company, which is a parent company, prepares

consolidated accounts in accordance with the provisions of this Act

it need not include a copy of its profit and loss account with the

annual accounts to be delivered to the Registrar as prescribed in

sub-article (1) where the following conditions are fulfilled -

(a) the application of this exemption is disclosed in the

notes to the accounts of the parent company and in the

notes to the consolidated accounts; and

(b) the profit or loss of the parent company, determined in

accordance with the provisions of this Act, shall be

shown separately either on the face of the parent

company’s balance sheet or in the notes to the

accounts of the parent company.

(5) If any document comprised in the annual accounts is in a

language other than Maltese or English, the company shall annex to

the copy of that delivered document a translation of it into either

Maltese or English, certified to be a correct translation in such

manner as may be prescribed.

(6) In the case of default in complying with the provisions of

this article, or where the annual accounts delivered to the Registrar

do not comply with the provisions of this Act, every officer of the

company who is in default shall be liable to a penalty, and, for

every day during which the default continues, to a further penalty.

In proceedings under this sub-article it shall not be a defence to

prove that the document or documents in question were not in fact

prepared as required by this Act.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 184 Annual return. — COMPANIES ACT Open official source

(1) Every company shall, after 1st January 2004, upon

each anniversary of its registration, make a return in the form set

out in the Seventh Schedule showing the matters therein specified

and made up to the date of such anniversary

Provided that -

(a) where a company was, immediately before the 1st

January 2004, in default with respect to the delivery of

one or more annual returns, this article shall not affect

the obligation of the company to make such a return or

returns or the payment of any penalty arising from

such a default;

(b) where a company has converted any of its shares into

stock and registered the conversion as provided in

article 79, the list of past and present members shown

in Part 3 of the Seventh Schedule shall state the

amount of stock held by each of the existing members

instead of the amount of shares and the particulars

relating to shares required by that part.

(2) The annual return, duly completed, shall be signed by at

least one director of the company or the company secretary and

forwarded to the Registrar for registration within forty-two days

after the date to which it is made up. Where the annual return is

forwarded to the Registrar by electronic means it may be signed by

one director or the company secretary or 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.

(3) If default is made in complying with the provisions of this

article, every officer of the company who is in default shall be

liable to a penalty, and, for every day during which the default

continues, to a further penalty.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 185 Exemptions for certain small companies. — COMPANIES ACT Open official source

(1)

Companies which on their balance sheet dates do not

exceed the limits of a t l e a s t two of the following three

criteria

- balance sheet total: five million euro (€5,000,000);

- net turnover: ten million euro (€10,000,000);

- average number of employees during the accounting

period: fifty (50),

shall for the purposes of this Chapter be designated as "small

companies" and shall be exempted from the requirement imposed by

article 177, with the exception of the obligations considered in terms

of the Corporate Sustainability Reporting Regulations for small

companies which are public-interest entities. When this exemption

is applied, the information required in paragraph 3 of the Sixth

Schedule regarding the acquisition by a company of its own shares

shall be recorded in the notes to the accounts.

(2) Private companies which on their balance sheet dates do not

exceed the limits of at least two of the three following criteria

-

balance sheet total: forty-six thousand six hundred

euro (46,600);

-

net turnover : ninety-three thousand euro (93,000);

-

average number of employees during the accounting

period: two (2);

shall be exempted from the provisions of Chapter IX of Title I of

Part V and from the requirements imposed by article 179 and the

Third Schedule.

(3) Where on its balance sheet date other than its first balance

sheet date, a company exceeds or ceases to exceed the limits of two

of the three criteria indicated in sub-articles (1) and (2), that fact

shall affect the application of the derogation provided for in those

sub-articles only if it occurs in two consecutive accounting periods.

(4) The balance sheet total referred to in this article shall be

calculated by taking the amount of total assets shown in the balance

sheet drawn up in accordance with generally accepted accounting

principles and practice.

(5) A parent company shall not be treated as qualifying as a

small company in relation to an accounting period unless the group of

which it is parent qualifies as a small group. A group qualifies as a

small group in relation to an accounting period if it consists of parent

and subsidiary undertakings to be included in a consolidation and

which on a consolidation basis do not exceed the limits of two of the

following three criteria on the balance sheet date of the parent

undertaking

- aggregate balance sheet total: five million euro (€5,000,000)

net or six million euro (€6,000,000) gross;

- aggregate turnover: ten million euro (€10,000,000) net or

twelve million euro (€12,000,000) gross

- aggregate number of employees: fifty (50)

Provided that the provisions of this sub-article shall not apply

to a parent company which is exempted from the requirement to

prepare consolidated accounts in accordance with article 174.

(6) The provisions of sub-article (3) shall apply to parent

companies as though the reference to company were a reference to

parent company.

(7) The aggregate figures shall be ascertained by aggregating

the relevant figures determined in accordance with sub-articles (1),

(2) and (5). In relation to the aggregate figures for turnover and

balance sheet total, "net" means with the set-offs and other

adjustments required for the preparation of consolidated accounts

and "gross" means without those set-offs and other adjustments;

and a company may satisfy the relevant requirements on the basis

of either the net or the gross figure.

(8) The figures for each subsidiary undertaking shall be those

included in its individual accounts for the relevant accounting

period, that is -

(a) if its accounting period ends with that of the parent

company, that accounting period; and

(b) if not, its accounting period ending last before the end

of the accounting period of the parent company.

If such figures cannot be obtained without disproportionate

expense or undue delay, the latest available figures shall be taken.

(9) The net turnover referred to in this article means the amounts

derived from the sale of products and the provision of services after

deducting sales rebates and value added tax and other taxes directly

linked to turnover.

(10) In determining the average number of employees during the

accounting period, for the purposes of this article -

(a) in relation to whole-time employees, the average

number of employees shall be that established on the

basis of the following formula

-

the aggregate number of full weeks worked

during the accounting period by all the whole-

time employees of the company divided by the

number of full weeks comprised in that period,

rounded off to the nearest number; and

(b) in relation to part-time employees, the average number

of employees shall be that established on the basis of

the following formula

-

the aggregate number of hours worked during

the accounting period by all the part-time

employees of the company divided by the

number of full weeks comprised in that period

and again divided by forty, rounded off to the

nearest number.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 186 Share capital in any convertible currency. — COMPANIES ACT Open official source

(1) The share capital of a company may be denominated

in any currency which is a convertible currency within the meaning

assigned to it by the Central Bank of Malta Act, and, for the

purposes of this Chapter, the euro shall be a convertible currency.

(2) A company may by extraordinary resolution change the

currency in which its share capital is expressed, and for this

purpose the conversion rules set out in the Eighth Schedule shall

apply in respect of any company other than an investment company

with variable share capital.

(3) For the purposes of applying the provisions of this Act

relating to minimum share capital, share capital expressed in a

currency other than euro shall be calculated on the basis of the euro

equivalent at the date of -

(a) the registration of the memorandum, in the case of

formation of a company; or

(b) the registration of the extraordinary resolution, in the

case referred to in sub-article (2); or

(c) the registration of the extraordinary resolution

effecting a reduction of the issued share capital, in the

case where a company reduces its issued share capital.

(4) Without prejudice to the provisions of article 83, a copy of

the extraordinary resolution referred to in sub-article (2) shall be

delivered to the Registrar for registration and shall not be effective

until it is so registered.

(5) The exchange rate to be used shall be the average of the

buying and selling rates prevailing at the date of registration

referred to in sub-article (3), as the case may be.

(6) An investment company with variable share capital may

only change the currency in which its share capital is expressed by

complying with such conversion rules as may be prescribed by the

Minister under article 188.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 187 Accounts in any convertible currency. — COMPANIES ACT Open official source

(1) A company shall present its annual accounts in the

same currency as that of its share capital.

(2) Where the annual accounts of a company are presented in a

currency other than euro, there shall be stated on the balance sheet

of the company the exchange rate between the currency used and

euro on the balance sheet date and such rate shall be the official

euro reference middle exchange rate published by the European

Central Bank, or the indicative middle exchange rate published by the

Central Bank of Malta, as the case may be, for that date.

(3) For the purposes of applying any provision of this Act

which sets a threshold by reference to an amount in euro in the

annual accounts of a company, such amount as stated in a foreign

currency in the company’s annual accounts shall be converted into

euro by using the exchange rate referred to in sub-article (2).

(4) Annual accounts shall be published in the currency in

which they are presented. They may also be published in both the

currency in which they are presented and in euro. The conversion

into euro shall be made by using the exchange rate between the

currency used and the euro on the balance sheet date, and such rate

shall be the official euro reference middle exchange rate published by

the European Central Bank, or the indicative middle exchange rate

published by the Central Bank of Malta, as the case may be. This rate

shall be disclosed in the notes to the accounts.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 188 Power of Minister to make regulations altering accounting requirements. — COMPANIES ACT Open official source

For the purposes of this Chapter, the Minister may by

order make regulations which -

(a) add to the classes of documents required to be

prepared, laid before the company in general meeting

or delivered to the Registrar;

(b) restrict the categories of companies which have the

benefit of any exemption, exception or special

provision;

(c) require additional matter to be included in a document

of any class;

(d) otherwise render the accounting requirements of this

Act more onerous;

(e) in derogation of the provisions of article 187, permit a

company to present its annual accounts in a different

currency from that of its share capital, regulate the

manner and the conditions as may be considered

appropriate for this purpose, and make provision in the

Eighth Schedule to this Act for the application of the

said Schedule, with such variations as may be

specified, in relation to such a company;

(f)

prescribe conversion rules applicable on a change in

the currency in which the share capital of an

investment company with variable share capital is

expressed; or

(g) amend or vary any of the provisions of this Chapter for

the purpose of bringing them in line with the

requirements of generally accepted accounting

principles and practice or generally accepted auditing

standards.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 189 Consequential provisions to article 188. — COMPANIES ACT Open official source

(1) Regulations made under article 188 may -

(a) make different provision for different cases; and

(b) repeal and re-issue provisions of any regulation with

modifications of form or arrangement, whether or not

they are modified in substance.

(2) Regulations made under article 188 may contain such

transitional and other supplementary and incidental provisions as

appear to the Minister to be appropriate.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 190 Court order to make good failure to lay or deliver accounts. — COMPANIES ACT Open official source

(1) If -

(a) in respect of a company’s accounting period any of the

requirements of article 182(1) has not been complied

with before the end of the period prescribed by that

article; and

(b) the directors of the company fail to make good the

default within fourteen days after the service of a

notice on them requiring compliance,

the court may, on application by any member or creditor of the

company, or by the Registrar, make an order directing the directors,

or any of them, to make good the default within such time as may

be specified in the order.

(2) The court’s order may provide that all costs of and

incidental to the application shall be borne by the directors.

(3) Nothing in this article shall prejudice the provisions of this

Act relating to penalties for non-compliance.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 191 Application to other commercial partnerships. — COMPANIES ACT Open official source

(1) Where all the partners of a partnership en nom

collectif or where all the partners having unlimited liability of a

partnership en commandite or limited partnership, the capital of

which is not divided into shares, are themselves partnerships en

commandite or limited partnerships, the capital of which is divided

into shares, the provisions of Chapter IX and of this Chapter of this

Title shall, in so far as they are applicable, apply to such a

partnership.

(2) The provisions of sub-article (1) shall also apply where all

the partners of a partnership en nom collectif or where all the

partners having unlimited liability of a partnership en commandite

or limited partnership the capital of which is not divided into shares

are themselves companies, or are partnerships or firms constituted

or incorporated outside Malta which are of a type which is

comparable to that of a company or that of a partnership en

commandite or limited partnership the capital of which is divided

into shares as regulated by this Act.

(3) Where all the partners of a partnership en nom collectif or

where all the partners having unlimited liability of a partnership en

commandite or limited partnership the capital of which is not

divided into shares are themselves companies or are partnerships en

commandite or limited partnerships the capital of which is divided

into shares, or are commercial partnerships to which sub-article (1)

or sub-article (2) applies, the provisions of Chapter IX and of this

Chapter of this Title shall, in so far as applicable, apply to such a

partnership, provided that the provisions of article 184 shall not apply

to partnerships governed by this article.

Chapter XI - Distribution of Profits and Assets

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 192 Certain distributions prohibited. — COMPANIES ACT Open official source

(1) A company shall not make a distribution except out of

profits available for the purpose.

(2) For the purposes of this Chapter, "distribution" means every

description of distribution of a company’s assets to its members,

whether in cash or otherwise, except distribution by way of -

(a) an issue of shares as fully or partly paid bonus shares;

(b) the redemption or purchase of any of the company’s

own shares out of capital, including the proceeds of

any fresh issue of shares, or out of undistributable

reserves as stipulated in article 193(3);

(c) the reduction of the issued share capital by

extinguishing or reducing the liability of any of the

members on any of the company’s shares in respect of

issued share capital not paid up, or by paying off paid

up issued share capital; and

(d) a distribution of assets to members of the company on

its winding up.

(3) For the purposes of this Chapter, a company’s profits

available for distribution shall be its accumulated, realised profits,

so far as not previously utilised by distribution or capitalisation,

less its accumulated, realised losses, so far as not previously

written off in a reduction or reorganisation of issued share capital

duly made. The provisions of this sub-article shall be subject to the

provisions of articles 194 and 195.

(4) A company shall not apply an unrealised profit in paying up

debentures, or any amounts unpaid on its issued share capital.

(5) Where the directors of a company are, after making all

reasonable enquiries, unable to determine whether a particular

profit made before the 1st January, 1995 is realised or unrealised,

they may treat the profit as realised; and where after making such

enquiries they are unable to determine whether a particular loss so

made is realised or unrealised, they may treat the loss as unrealised.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 193 Distributions by companies. — COMPANIES ACT Open official source

(1) A public company may only make a distribution at

any time -

(a) if at that time the amount of its net assets is not less

than the aggregate of its called-up issued share capital

and undistributable reserves; and

(b) if, and to the extent that, the distribution does not

reduce the amount of those assets to less than that

aggregate.

The provisions of this sub-article shall be subject to the

provisions of articles 194 and 195.

(2) In sub-article (1), "net assets" means the aggregate of the

company’s assets less the aggregate of its liabilities. "Liabilities"

include any amount retained as reasonably necessary for the

purpose of providing for any liability or loss which is either likely

to be incurred or certain to be incurred but uncertain as to amount

or as to the date on which it will arise.

(3)

A company’s undistributable reserves are -

(a) the share premium account;

(b) the capital redemption reserve;

(c) the amount by which the company’s accumulated,

unrealised profits, so far as not previously utilised by

capitalization of a description to which this paragraph

applies, exceed its accumulated, unrealised losses, so

far as not previously written off in a reduction or

reorganisation of capital duly made;

(d) the difference by which the profit attributable to the

participating interest and recognised in the profit and

loss account exceeds the amount of dividends already

received or the payment of which can be claimed;

(e) the amount of development costs included under

‘Assets’ which have not been completely written off;

and

(f)

any other reserve which the company is prohibited

from distributing by any legislation or by its

memorandum or articles; and paragraph (c) shall apply

to every description of capitalization except a transfer

of profits of the company to its capital redemption

reserve on or after 1st January 1995;

(g) the revaluation reserve unless it represents a gain actually

realised.

(4) A public company shall not include any uncalled issued

share capital as an asset in any accounts relevant for the purposes

of this article.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 194 Other distributions by investment companies with fixed share capital. — COMPANIES ACT Open official source

(1) Subject to the following provisions of this article, an

investment company with fixed share capital may also make a

distribution at any time out of its accumulated, realised revenue

profits, so far as not previously utilised by a distribution or

capitalisation, less its accumulated revenue losses, whether realised

or unrealised, so far as not previously written off in a reduction or

reorganisation of capital duly made -

(a) if at that time the amount of its assets is at least equal

to one and a half times the aggregate of its liabilities,

and

(b) if, and to the extent that, the distribution does not

reduce that amount to less than one and a half times

that aggregate.

(2) In sub-article (1)(a), "liabilities" includes any provision for

liabilities or charges within the meaning of paragraph 7 of the

Third Schedule.

(3) An investment company with fixed share capital shall not

include any uncalled issued share capital as an asset in any

accounts relevant for the purposes of this article.

(4) An investment company with fixed share capital may not

make a distribution by virtue of sub-article (1) unless -

(a) its shares are listed on a regulated market; and

(b) during the relevant period it has not -

(i)

distributed any of its capital profits, or

(ii)

applied any unrealised profits or any capital

profits, realised or unrealised, in paying up

debentures or amounts unpaid on its issued share

capital.

(5) The "relevant period" under sub-article (4) shall be the

period beginning with -

(a) the first day of the accounting period immediately

preceding that in which the proposed distribution is to

be made; or

(b) where the distribution is to be made in the company’s

first accounting period, the first day of that period,

and ending with the date of the distribution.

(6) "Investment company with fixed share capital" means a

public company which complies with the following requirements

(a) the business of the company consists of investing in

funds mainly in securities with the aim of spreading

investment risk and giving members of the company

the benefit of the results of the management of its

funds;

(b) none of the company’s holdings in companies other

than those which are, for the time being, in investment

companies with fixed share capital, represents more

than fifteen per cent by value of the investing

company’s investments;

(c) distribution of the company’s capital profits is

prohibited by its memorandum or articles; and

(d) the company has not retained, otherwise than in

compliance with this Chapter, in respect of any

accounting period, more than fifteen per cent of the

income it derives from securities.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 195 Extension of article 194 to other companies. — COMPANIES ACT Open official source

(1) The Minister may make regulations extending the

provisions of article 194, with or without modifications, to

investment companies with variable share capital or to other

companies whose principal business consists of investing their

funds in securities, land or other assets with the aim of spreading

investment risk and giving their members the benefit of the results

of the management of the assets.

(2) Regulations made under this article may make different

provision for different categories of companies and may contain

such transitional and supplemental provisions as the Minister

considers necessary.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 196 Treatment of development costs. — COMPANIES ACT Open official source

(1) Subject to the following provisions of this article,

where development costs are shown as an asset in a company’s

annual accounts, any amount shown in respect of those costs is to

be treated -

(a) under article 192, as a realised loss; and

(b) under article 194, as a realised revenue loss.

(2) The provisions of sub-article (1) shall not apply to any part

of that amount representing an unrealised profit made on

revaluation of those costs.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 197 Distribution to be justified by reference to company’s accounts. — COMPANIES ACT Open official source

(1) The provisions of this article and of articles 198 to

203 shall apply for determining the question whether a distribution

may be made by a company without contravening articles 192, 193,

or 194.

(2) The amount of a distribution which may be made shall be

determined by reference to the following items as stated in the

company’s accounts -

(a) profits, losses, assets and liabilities;

(b) provisions; and

(c) share capital and reserves, including undistributable

reserves.

(3) The company’s accounts which are relevant for the

purposes of this article shall be its last annual accounts, that is to

sa y t h o s e w h i c h w e r e l a i d i n r e sp e c t o f t h e l a s t p r e c e d i n g

accounting period in respect of which accounts so prepared were

laid

Provided that in the following two cases -

(a) where the distribution would be found to contravene

the relevant article in this Chapter if reference were

made only to the company’s last annual accounts; or

(b) where the distribution is proposed to be declared

during the company’s first accounting period, or

before any annual accounts are laid in respect of that

period,

the accounts relevant under this article, called "interim accounts" in

the first case, and "initial accounts" in the second, shall be those

necessary to enable a reasonable judgment to be made as to the

amounts of the items mentioned in sub-article (2).

(4) The relevant article of this Chapter is treated as

contravened in the case of a distribution unless the requirements

laid down in this article and in the following three articles, as and

where applicable, in respect of the relevant accounts are complied

with in relation to that distribution.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 198 Requirements for last annual accounts. — COMPANIES ACT Open official source

(1) If the company’s last annual accounts constitute the

only accounts relevant under article 197, the requirements laid

down in this article shall apply in regard to such accounts.

(2) The accounts shall have been properly prepared in

accordance with the provisions of this Act, or have been so

prepared subject only to matters which are not material for

determining, by reference to items mentioned in article 197(2),

whether the distribution would contravene the relevant article of

this Chapter.

(3)

Without prejudice to the provisions of sub-article (2) -

(a) so much of the accounts as consists of a balance sheet

shall give a true and fair view of the state of the

company’s affairs as at the balance sheet date; and

(b) so much of the accounts as consists of a profit and loss

account shall give a true and fair view of the

company’s profit or loss for the period in respect of

which the accounts were prepared.

(4) The auditors shall have made their report on the accounts,

and sub-article (5) shall apply if the report is not a report without

qualification to the effect that in the auditor’s opinion the accounts

have been properly prepared in accordance with the provisions of

this Act.

(5) The auditors shall, in the case referred to in sub-article (4),

h ave stat ed in w ri ti ng , eit her a t t he ti m e o f th eir repo rt o r

subsequently, whether in their opinion, the matter in respect of

which their report is qualified is material for determining, by

reference to items mentioned in article 197(2), whether the

distribution would contravene the relevant article, and a copy of the

statement shall have been laid before the company in general

meeting.

(6) A statement under sub-article (5) shall suffice for purposes

of a particular distribution not only if it relates to a distribution

which has been proposed but also if it relates to distributions of any

description which include that particular distribution,

notwithstanding that at the time of the statement it had not been

proposed.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 199 Requirements for interim accounts. — COMPANIES ACT Open official source

(1) The provisions of this article shall constitute the

requirements in respect of interim accounts prepared for a proposed

distribution by a public company.

(2) The accounts shall have been properly prepared, or shall

have been so prepared subject only to matters which are not

material for determining, by reference to items mentioned in article

197(2), whether the proposed distribution would contravene the

relevant article of this Chapter.

(3) "Properly prepared" shall mean that the accounts shall

comply with this Act with such modifications as are necessary

because the accounts are prepared otherwise than in respect of an

accounting period and any balance sheet comprised in the accounts

shall have been signed in accordance with article 176.

(4)

Without prejudice to the provisions of sub-article (3) -

(a) so much of the accounts as consists of a balance sheet

shall give a true and fair view of the state of the

company’s affairs as at the balance sheet date; and

(b) so much of the accounts as consists of a profit and loss

account shall give a true and fair view of the

company’s profit or loss for the period in respect of

which the accounts were prepared.

(5) A copy of the accounts shall have been delivered to the

Registrar for registration.

(6) If the accounts are in a language other than English or

Maltese, a translation into English or Maltese of the accounts,

certified to be a correct translation in such manner as may be

prescribed, shall also have been delivered to the Registrar.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 200 Requirements for initial accounts. — COMPANIES ACT Open official source

(1) The provisions of this article shall constitute the

requirements in respect of initial accounts prepared for a proposed

distribution by a public company.

(2) The accounts shall have been properly prepared, or they

shall have been so prepared subject only to matters which are not

material for determining, by reference to items mentioned in article

197(2), whether the proposed distribution would contravene the

relevant article of this Chapter.

(3) Article 199(3) and (4) shall apply as respects the meaning of

"properly prepared".

(4) The company’s auditors shall have made a report stating

whether, in th ei r op inio n, t he accounts hav e been properly

prepared, and sub-article (5) shall apply if their report is a qualified

report, that is to say it is not a report without qualification to the

effect that in the auditors’ opinion the accounts have been so

prepared.

(5) The auditors shall in the case referred to in sub-article (4)

also have stated in writing, whether, in their opinion, the matter in

respect of which their report is qualified is material for

determining, by reference to items mentioned in article 197(2),

whether the distribution would contravene the relevant article of

this Chapter.

(6) A copy of the accounts, of the auditors’ report under sub-

article (4) and of the auditors’ statement, if any, under sub-article

(5) shall have been delivered to the Registrar.

(7) If the accounts are, or the auditors’ report under sub-article

(4) or their statement, if any, under sub-article (5), is in a language

other than Maltese or English, a translation into English or Maltese

of the accounts, the report or the statement, as the case may be,

certified to be a correct translation in such manner as may be

prescribed, shall also have been delivered to the Registrar.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 201 Method of applying article 197 to successive distributions. — COMPANIES ACT Open official source

For the purpose of determining, by reference to particular

accounts, whether a proposed distribution may be made by a

company, article 197 shall have effect, in a case where one or more

distributions have already been made in pursuance of

determinations made by reference to those same accounts, as if the

amount of the proposed distribution was increased by the amount of

the distributions so made.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 202 Treatment of assets in the relevant accounts. — COMPANIES ACT Open official source

For the purposes of articles 192 and 193, a provision of

any kind mentioned in the Third Schedule in paragraph 7(1) and

paragraphs 16 and 17 including these paragraphs as applied by

paragraph 28 of the said Third Schedule, shall be treated as a

realised loss.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 203 Distributions in kind. — COMPANIES ACT Open official source

Where a company makes a distribution of, or including, a

non-cash asset, and any part of the amount at which that asset is

stated in the accounts relevant for the purposes of the distribution

in accordance with articles 197 to 202 represents an unrealised

profit, that profit is to be treated as a realised profit -

(a) for the purpose of determining the lawfulness of the

distribution in accordance with this Chapter, whether

before or after the distribution takes place; and

(b) for the purpose of paragraph 14(c)(i) and paragraph

30(3) of the Third Schedule in relation to anything

done with a view to or in connection with the making

of that distribution.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 204 Consequence of unlawful distribution. — COMPANIES ACT Open official source

Where a distribution, or part of a distribution, made by a

company to one of its members is made in contravention of this

Chapter and, at the time of the distribution, that member knows or

has reasonable grounds for believing that it is so made, he shall be

liable to repay it, or that part of it, as the case may be, to the

company or, in the case of a distribution made otherwise than in

cash, to pay the company a sum equal to the value of the

distribution, or of the part of the distribution, at that time.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 205 Obligations imposed apart from article 204 not to be prejudiced. — COMPANIES ACT Open official source

The provisions of article 204 shall apply without prejudice

to any obligation imposed apart from that article on a member of a

company to repay a distribution unlawfully made to him.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 206 Saving for provision in articles operative before 1st January, — COMPANIES ACT Open official source

Where immediately before 1st January, 1995 a company

was authorised by a provision of its articles to apply its unrealised

profits in paying up in full or in part unissued shares to be allotted

to members of the company as fully or partly paid bonus shares,

1995. that provision shall continue, subject to any alteration of the

articles, as authority for those profits to be so applied after that

date.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 207 Interpretations for the purposes of this Chapter. — COMPANIES ACT Open official source

(1) The provisions of this article shall have effect for the

interpretation of this Chapter.

(2)

"Capitalisation", in relation to a company’s profits, shall

mean any of the following operations, whenever carried out -

(a) the application of the profits to wholly or partly pay up

unissued shares in the company to be allotted to

members of the company as fully or partly paid bonus

shares; or

(b) the transfer of the profits to the capital redemption

reserve.

(3) References in this Chapter to profits and losses of any

description shall be, respectively, to profits and losses of that

description made at any time and, except where the context

otherwise requires, shall be, respectively, to revenue and capital

profits and revenue and capital losses.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 208 Saving for other restraints on distribution. — COMPANIES ACT Open official source

The provisions of this Chapter shall be without prejudice

to any other provision of law, or any provision of a company’s

memorandum or articles, restricting the sums out of which, or the

cases in which, a distribution may be made.

Chapter XII - Private Company

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 209 Definition. — COMPANIES ACT Open official source

(1) A private company is a company which, besides

fulfilling the requirements of this Act for it to hold the status of a

private company, is one which, by its memorandum or articles -

(a) restricts the right to transfer its shares; and

(b) limits the number of its members to fifty; and

(c) prohibits any invitation to the public to subscribe for

any shares or debentures of the company.

(2)

A private company shall not -

(a) offer to the public, whether for cash or otherwise, any

shares in or debentures of the company; or

(b) allot or agree to allot, whether for cash or otherwise,

any shares in or debentures of the company with a

view to all or any of those shares or debentures being

offered to the public, within the meaning given to the

expression "offers of securities made to the public" in

article 2(3); or

(c) allow any of its equity securities to be admitted to listing

or trading.

(3) Where a private company contravenes the provisions of

sub-article (2), every officer thereof who is in default shall be liable

to a penalty.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 210 Resolutions in writing. — COMPANIES ACT Open official source

Subject to the provisions of this Act, in the case of a

private company, a resolution in writing signed by all the members

for the time being entitled to receive notice of and to attend and

vote at the general meetings shall be as valid and effective as if the

same had been passed at a general meeting of the company duly

convened and held and the provisions of article 155 shall not apply.

Annual general meetings of the company may be held in

accordance with this article

Provided that a resolution in writing as aforesaid shall be

void if it purports to remove a director or an auditor before the

expiration of his term of office, or otherwise purports to deprive the

auditors of the right to attend and be heard at any general meeting of

the company on any part of the business of the meeting which

concerns them as auditors.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 211 Exempt company. — COMPANIES ACT Open official source

(1) A private company shall have the status of an exempt

co mp any if th e con di tio ns m ent ion ed i n su b-arti cle (2) are

contained in its memorandum or articles.

(2)

The conditions required by sub-article (1) are -

(a) that the number of persons holding debentures of the

company is not more than fifty; and

(b) that no body corporate is a director of the company,

and neither the company nor any of the directors is

party to an arrangement whereby the policy of the

company is capable of being determined by persons

other than the directors, members or debenture holders

thereof.

(3) Companies referred to in sub-article (1) shall be exempt

from the requirements of article 138(7) and of article 144(1)(a); and

the proviso to article 183(2) shall apply.

(4) A sole director of an exempt company shall be entitled to

hold office as a company secretary thereof during his directorship.

(5) Where an exempt company has only one director, any

requirement of this Act that two directors of a company shall act,

shall be interpreted in relation to the exempt company as requiring

one director to act.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 212 Single member companies. — COMPANIES ACT Open official source

(1) A company referred to in article 211(1) may have a

single member notwithstanding the provisions of article 68 and of

article 72(1) or of any other provision of this Act, where the objects

of such a company specify which activity of the company shall be

its main activity and the business of the company shall consist

principally of that activity.

(2) The provisions of article 214(2)(b)(i) shall not apply to

companies falling within the terms of this article.

(3) A company may have a single member upon registration or

it may become a single member company through the acquisition of

all its shares by one person, provided that such a company complies

with the provisions laid down in sub-article (1).

(4) When a company becomes a single member company

through the acquisition of all its shares by one person, the company

shall, within fourteen days, deliver to the Registrar for registration

a notice -

(a) specifying the fact that it has become a single member

company and stating the name and residence of that

single member; and

(b) confirming compliance with the provisions laid down

in sub-article (1).

Such notice shall be deemed to satisfy the requirements of

article 120(3).

(5) Where a person becomes a single member as a result of

acquiring shares in the company causa mortis, such fact shall be

stated in the notice referred to in sub-article (4) and such notice

shall be deemed to satisfy the requirements of article 120(3).

(6) If default is made in complying with sub-articles (4), (5)

and (10), every officer of the company who is in default shall be

liable to a penalty, and, for every day during which the default

continues, to a further penalty.

(7) The single member shall exercise the powers of the general

meeting of the company and the decisions taken by him in this

capacity shall be recorded as minutes of the general meeting and

the provisions of this Act regulating general meetings shall be

construed accordingly. The decisions referred to in this sub-article

shall be deemed to be resolutions of the company for the purposes

of the application of the provisions of this Act

Provided that the provisions of this sub-article shall not

prejudice the rights of the auditors of the company under the

provisions of article 155, and the rights granted to persons as are,

by the articles of the company, entitled to receive notices of, attend

and be heard at general meetings of the company.

(8) The single member shall record in writing all agreements

between him and the company as represented by him in a minute

book kept by the company specifically for the purpose.

(9) If default is made in complying with the provisions of sub-

article (8), the single member shall be liable to a penalty.

(10) When a company ceases to be a single member company, it

shall, within fourteen days, deliver to the Registrar for registration

a notice specifying the fact that it is no longer a single member

company and the provisions of this article shall not apply to such

company from the date it has ceased to be a single member

company.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 213 Change of status of company. — COMPANIES ACT Open official source

(1) A private company may change its status to a public

company by altering its memorandum or articles and incorporating

in such alteration all those changes required by the provisions of

this Act for a company to hold the status of a public company,

including the removal of the restrictions resulting by virtue of the

provisions of article 209 which conflict with the status of a public

company.

(2) The alteration referred to in sub-article (1) shall not take

effect unless and until it is registered and the provisions of article

79(2) shall apply thereto.

(3) The Registrar shall, upon the registration referred to in sub-

article (2), enter in the register the fact of such change as referred to

in sub-article (1) and he shall issue a certificate of registration

altered to reflect that change.

(4)

A public company may change its status to a private

company if, after having effected compliance with the restrictions

resulting by virtue of the provisions of article 209, it alters its

memorandum or articles, incorporating in such alteration all those

changes required by the provisions of this Act for a company to

hold the status of a private company, including the introduction of

the restrictions resulting by virtue of the provisions of article 209.

(5) The alteration referred to in sub-article (4) shall not take

effect unless and until that alteration, accompanied by a declaration

m a d e b y th e d i r e c t o r s o f th e co m p a n y t ha t th e co m p a n y i s

effectively in compliance with the provisions of article 209, is

registered, and the provisions of article 79(2) shall apply thereto.

(6) The Registrar shall, upon the registration referred to in sub-

article (5), enter in the register the fact of such change as referred to

in sub-article (4) and he shall issue a certificate of registration

altered to reflect that change.

(7) A private company may change its status to an exempt

company if, after having effected compliance with the conditions

laid down in article 211, it alters its memorandum or articles by

incorporating therein all the said conditions.

(8) The alteration referred to in sub-article (7) shall not take

effect unless and until that alteration, accompanied by a declaration

m a d e b y th e d i r e c t o r s o f th e co m p a n y t ha t th e co m p a n y i s

effectively in compliance with the provisions of article 211, is

registered, and the provisions of article 79(2) shall apply thereto.

(9) An exempt company which resolves not to continue

fulfilling any of the conditions of article 211, shall change its status

to a private company by altering its memorandum or articles to

remove any such conditions.

(10) The alteration referred to in sub-article (9) shall not take

effect unless and until it is registered and the provisions of article

79(2) shall apply thereto.

(11) Where a private company changes its status to a public

company in accordance with the provisions of this article, the

company shall, in addition to the documents referred to in sub-

article (2), deliver to the Registrar for registration -

(a) a copy of a balance sheet prepared as at a date being

not more than four months before the date of the

registration of the alteration referred to in sub-article

(1), together with a report of the company’s auditors in

relation to that balance sheet; and

(b) a written statement by the company’s auditors that in

their opinion the balance sheet shows that at the

balance sheet date the amount of the company’s net

assets was not less than the aggregate of its called up

issued share capital and undistributable reserves; and

(c) a declaration by any director of the company that

between the balance sheet date and the date of delivery

of the alteration to the Registrar for registration, there

has been no change in the company’s financial position

that has resulted in the amount of its net assets

becoming less than the aggregate of its called up

issued share capital and undistributable reserves.

In this sub-article, "net assets" shall have the same meaning

assigned to it under article 193(2).

(12) A private company which proceeds to change its status to a

public company in accordance with the provisions of this article

shall not allot or propose to allot shares for a consideration

otherwise than in cash at any time between the date of the balance

sheet and the date of delivery of the alteration referred to in sub-

article (11).

(13) Where a public company changes its status to a private

company in accordance with the provisions of this article, it shall

be required to redeem the shares held by the dissenting members, if

they so request, on such terms as may be agreed or as the court, on

a demand of either the company or the dissenting members, thinks

fit to order.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 213A Undertakings required to report on payments to governments. — COMPANIES ACT Open official source

(1) Large undertakings, as defined in the Third Schedule,

and all public-interest entities active in the extractive industry or

the logging of primary forests shall prepare and make public a

report on payments made to governments on an annual basis.

(2) That obligation shall not apply to any undertaking governed

by the law of a Member State which is a subsidiary or parent

undertaking, where both of the following conditions are fulfilled

(a) the parent undertaking is subject to the laws of a

Member State; and

(b) the payments to governments made by the undertaking

are included in the consolidated report on payments to

governments drawn up by that parent undertaking in

accordance with paragraph 3 of the Fourth Schedule.

(3) All undertakings which qualify to make the report

mentioned in sub-article (1) shall abide by the requirements

provided for in the Fourth Schedule.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 213B Undertakings and branches that are required to report on income tax information. — COMPANIES ACT Open official source

(1) Ultimate parent undertakings governed by the laws

of Malta as defined in the Fourth Schedule, where the consolidated

revenue on their balance sheet date exceeded a total of seven hundred

and fifty million euro (€750,000,000) for each of the last two

consecutive financial years, as reflected in their consolidated financial

statements, shall draw up, publish and make accessible a report on

income tax information, as detailed in Part II of the Fourth Schedule,

as regards the latter of those two consecutive financial years

Provided that an ultimate parent undertaking shall no longer

be subject to the reporting obligations set out in sub-article (1) where

the total consolidated revenue on its balance sheet date falls below

seven hundred and fifty million euro (€750,000,000) for each of the

last two consecutive financial years as reflected in its consolidated

financial statements.

(2)

Standalone undertakings governed by the laws of Malta,

where the revenue on their balance sheet date exceeded a total of seven

hundred and fifty million euro (€750,000,000) for each of the last two

consecutive financial years, as reflected in their annual financial

statements, shall draw up, publish and make accessible a report on

income tax information, as detailed in Part II of the Fourth Schedule,

as regards the latter of those two consecutive financial years

Provided that a standalone undertaking shall no longer be

subject to the reporting obligations stipulated in sub-article (2) where

the total revenue on its balance sheet date falls below seven hundred

and fifty million euro (€750,000,000) for each of the last two

consecutive financial years as reflected in its consolidated financial

statements.

(3)

The provisions established in sub-articles (1) and (2) shall

not apply to standalone undertakings or ultimate parent undertakings

and their affiliated undertakings where such undertakings, including

their branches, are established, or have their fixed places of business or

permanent business activity, within the territory of a single Member

State or in a state which is a member of the European Economic Area

and no other tax jurisdiction.

(4)

The provisions established in sub-articles (1) and (2) shall

not apply to standalone undertakings and ultimate parent undertakings

where such undertakings or their affiliated undertakings disclose a

report, in accordance with Article 89 of Directive 2013/36/EU of the

European Parliament and of the Council of 26 June 2013 on access to

the activity of credit institutions and the prudential supervision of

credit institutions and investment firms, amending Directive 2002/87/

EC and repealing Directives 2006/48/EC and 2006/49/EC, that

encompasses information on all of their activities, and in the case of

ultimate parent undertakings, on all the activities of all the affiliated

undertakings included in the consolidated financial statements.

(5)

Medium-sized and large subsidiary undertakings as referred

to in paragraph (1) of the Third Schedule that are governed by the laws

of Malta and controlled by an ultimate parent undertaking that is not

governed by the law of a Member State or of a state which is a member

of the European Economic Area, where the consolidated revenue on its

balance sheet date exceeded a total of seven hundred and fifty million

euro (€750,000,000) for each of the last two consecutive financial

years, as reflected in its consolidated financial statements, shall

publish and make accessible a report on income tax information, as

detailed in Part II of the Fourth Schedule, concerning that ultimate

parent undertaking as regards the latter of those two consecutive

financial years

Provided that where that information or report is not

available, the subsidiary undertaking shall request its ultimate parent

undertaking to provide it with all the information required to enable it

to meet its obligations under sub-article (5). If the ultimate parent

undertaking does not provide all the required information, the

subsidiary undertaking shall draw up, publish and make accessible a

report on income tax information, as detailed in Part II of the Fourth

Schedule, containing all the information in its possession, obtained or

acquired, and a statement indicating that its ultimate parent

undertaking did not make the necessary information available

Provided further that medium-sized and large subsidiary

undertakings shall no longer be subject to the reporting obligations

established in sub-article (5) where the total consolidated revenue of

the ultimate parent undertaking on its balance sheet date falls below

seven hundred and fifty million euro (€750,000,000) for each of the

last two consecutive financial years as reflected in its consolidated

financial statements.

(6)

Branches opened in Malta by undertakings that are not

governed by the law of a Member State or by the law of a state which

is a member of the European Economic Area shall publish and make

accessible a report on income tax information, as detailed in Part II of

the Fourth Schedule, concerning the ultimate parent undertaking or the

standalone undertaking referred to in paragraph (a) of the fifth proviso

to this sub-article, as regards the latter of the last two consecutive

financial years

Provided that where that information or report is not

available, the Registrar shall request the ultimate parent undertaking or

the standalone undertaking referred to in paragraph (a) of the fifth

proviso to this sub-article, to provide him with all the information

necessary to enable him to meet his obligations

Provided further that in the event that not all the required

information is provided, the branch shall draw up, publish and make

accessible a report on income tax information, as detailed in Part II of

the Fourth Schedule, containing all the information in its possession,

obtained or acquired, and a statement indicating that the ultimate

parent undertaking or the standalone undertaking did not make the

necessary information available

Provided further that the reporting obligations established in

this sub-article shall apply only to branches which have a net turnover

that exceeded the threshold pursuant to article 185(1) for each of the

last two consecutive financial years

Provided further that a branch subject to the reporting

obligations in accordance with this sub-article shall no longer be

subject to those obligations where its net turnover falls below the

threshold pursuant to article 185(1) for each of the last two

consecutive financial years

Provided further that the rules established in this sub-article

shall apply to a branch only where the following criteria are met

(a)

the undertaking that opened the branch is either

an affiliated undertaking of a group whose ultimate parent

undertaking is not governed by the law of a Member State or by

the law of a state which is a member of the European Economic

Area and the consolidated revenue of which on its balance sheet

date exceeded a total of seven hundred and fifty million euro

(€750,000,000) for each of the last two consecutive financial

years, as reflected in its consolidated financial statements, or a

standalone undertaking the revenue of which on its balance

sheet date exceeded for each of the last two consecutive

financial years a total of seven hundred and fifty million euro

(€750,000,000) as reflected in its financial statements; and

(b)

the ultimate parent undertaking referred to in

paragraph (a) does not have a medium-sized or large subsidiary

undertaking as referred to in sub-article (5)

Provided that a branch shall no longer be subject to the

reporting obligations established in this sub-article where the criterion

provided for in paragraph (a) ceases to be met for two consecutive

financial years.

(7)

The provisions established in sub-articles (5) and (6) shall

not apply where a report on income tax information is drawn up by an

ultimate parent undertaking or a standalone undertaking that is not

governed by the law of a Member State or by the law of a state which

is a member of the European Economic Area, in a manner that is

consistent with the Fourth Schedule, and meets the following criteria

(a)

it is made accessible to the public, free of charge

and in an electronic reporting format which is machine-

readable

(i)

on the website of that ultimate parent

undertaking or of that standalone undertaking;

(ii)

in at least one of the official languages of

the Union;

(iii) not later than twelve (12) months after the

balance sheet date of the financial year for which the

report is drawn up; and

(b)

it identifies the name and the registered office of a

single subsidiary undertaking, or the name and the address of a

single branch governed by the law of a Member State or by the

law of a state which is a member of the European Economic

Area, which has published a report in accordance with Article

48d(1) of the Country-by-Country Reporting Directive.

(8)

Subsidiary undertakings or branches not subject to the

provisions of sub-articles (5) and (6) shall publish and make accessible

a report on income tax information where such subsidiary

undertakings or branches serve no other objective than to circumvent

the reporting requirements set out in this article and the Fourth

Schedule.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 213C Responsibility for drawing up, publishing and making accessible the report on income tax information. — COMPANIES ACT Open official source

(1) Directors of the ultimate parent undertakings or the

standalone undertakings referred to in article 213B(1) and (2), acting

within the competences assigned to them under the law of Malta, shall

have collective responsibility for ensuring that the report on income

tax information is drawn up, published and made accessible in

accordance with article 213B and Part II of the Fourth Schedule.

(2)

Directors of the subsidiary undertakings referred to in

article 213B(5) and the persons designated to carry out the disclosure

formalities provided for in Article 41 of Directive (EU) 2017/1132 for

the branches referred to in article 213B(6), acting within the

competences assigned to them by the Act, shall have collective

responsibility for ensuring, to the best of their knowledge and ability,

that the report on income tax information is drawn up in a manner that

is consistent with or in accordance with, as applicable, article 213B

and Part II of the Fourth Schedule, and that it is published and made

accessible in accordance with Part II of the Fourth Schedule.

(3)

Any director or person referred to in sub-articles (1) and (2)

shall notify the Registrar whether the undertaking that he represents is

an ultimate parent undertaking or a standalone undertaking or a

subsidiary undertaking or an affiliated undertaking or a branch within

the meaning of the provisions of article 213B, not later than the last

day for registering with the Registrar the report on income tax

information and statement as detailed in Part II of the Fourth Schedule.

(4)

Any director or person referred to in sub-articles (1) and (2)

who is in breach of the provisions of this article or articles 213B or

213D or Part II of the Fourth Schedule shall be liable to an

administrative penalty and, for every day during which the default

persists, to a further administrative penalty.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 213D Statement by statutory auditor. — COMPANIES ACT Open official source

Where the financial statements of an undertaking governed

by the law of a Member State or by the law of a state which is a

member of the European Economic Area are required to be audited by

one or more statutory auditors or audit firms, the audit report shall

state whether, for the financial year preceding the financial year for

which the financial statements under audit were prepared, the

undertaking was required in accordance with Article 48b of the

Country-by-Country Reporting Directive or under Part II of the Fourth

Schedule to publish a report on income tax information and, if that is

the case, whether the report was published in accordance with Article

48d of the Country-by-Country Reporting Directive or in accordance

with Part II of the Fourth Schedule.

TITLE II - DISSOLUTION AND CONSEQUENTIAL

WINDING UP OF COMPANIES

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 214 Causes of dissolution and consequential winding up. — COMPANIES ACT Open official source

(1) A company shall be dissolved and consequently

wound up in the following cases -

(a) the company has by extraordinary resolution resolved

that the company be dissolved and consequently

wound up by the court;

(b) the company has by extraordinary resolution resolved

that the company be dissolved and consequently

wound up voluntarily.

(2) In addition to the modes of dissolution referred to in sub-

article (1) -

(a) a company may be dissolved and wound up by the

court in the following cases -

(i)

if the business of the company is suspended for

an uninterrupted period of twenty-four months;

(ii)

the company is unable to pay its debts; and

(b) a company shall be dissolved by the court in the

following cases -

(i)

the number of members of the company is

reduced to below two and remains so reduced

for more than six months

Provided that this paragraph shall not apply

to single member companies specified in article

212(3);

(ii)

the number of directors is reduced to below the

minimum prescribed by article 137 and remains

so reduced for more than six months;

(iii)

the court is of the opinion that there are grounds

of sufficient gravity to warrant the dissolution

and consequent winding up of the company;

(iv)

when the period, if any, fixed for the duration of

the company by the memorandum or articles

expires, or the event occurs, if any, on the

occurrence of which the memorandum or articles

provide that the company is to be wound up, and

the company in general meeting has not before

such expiry or event passed a resolution to be

wound up voluntarily.

(3) In the cases of dissolution falling within sub-article (2)(b),

the court shall, at its discretion, determine whether the company

shall be wound up by the court or voluntarily

Provided that for the purposes of sub-paragraphs (ii) and

(iv) of the said paragraph (b), the court at its discretion and upon

g o o d c a u s e b e i n g s h o w n m a y, a n d f o r t h e p u r p o s e s o f

sub-paragraph (i) of the same paragraph, the court shall, before

ordering the dissolution of the company, allow a period of time not

exceeding thirty days, within which the company may remedy the

default and upon proof being submitted to it that any such default

has been remedied, the court shall not order the company’s

dissolution.

(4) Where a company continues carrying on business without

having at least two members beyond the period of six months

referred to in sub-article (2)(b)(i), a person who, for the whole or

any part of the period that the company carries on business after the

said six months, is a member of the company and knows that it is

c a r r y i n g o n b u s i n e s s w i t h o n l y o n e m e m b e r, sh a l l b e h e l d

unlimitedly and jointly and severally liable with the company for

all the obligations contracted by the company for the whole period

or as the case may be, that part of it, from the lapse of the six

months until the dissolution of the company or until such time as

the default is remedied by the company in accordance with the

proviso to sub-article (3).

(5) For the purposes of sub-article (2)(a)(ii), a company shall be

deemed to be unable to pay its debts -

(a) if a debt due by the company has remained unsatisfied

in whole or in part after twenty-four weeks from the

enforcement of an executive title against the company

by any of the executive acts specified in article 273 of

the Code of Organization and Civil Procedure; or

(b) if it is proved to the satisfaction of the court that the

company is unable to pay its debts, account being

taken also of contingent and prospective liabilities of

the company.

(6) Where a company has passed a resolution in accordance

with sub-article (1)(a), it shall be required to give the notice

specified in article 265(1) and sub-article (2) thereof shall apply.

(7) For the purposes of this Title, a company shall be wound up

by the court if it is wound up in accordance with the provisions of

Sub-Title I of this Title; and a company shall be wound up

voluntarily if it is wound up in accordance with the provisions of

Sub-Title II of this Title.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 214A Simplified dissolution procedure. — COMPANIES ACT Open official source

(1) A company which has been validly registered for a

minimum period of six months may by an application to the Registrar be

dissolved and have its name struck off the register in accordance with

this article

Provided that the provisions of this article shall not apply

to entities regulated by any applicable law in Malta or to public limited

companies.

(2)

The application for the simplified dissolution and striking-

off procedure as provided in sub-article (1) may not be made if at

any time in the six months preceding the date of the application the

company would have

(a)

carried out any changes in its name; or

(b)

traded or otherwise carried on business; or

(c)

employed employees other than any person who

is an officer of the company; or

(d)

outstanding documents or penalties with the

Registrar which remain outstanding as at the date of the

application; or

(e)

any of its shares pledged.

(3) The application shall be made by means of a prescribed

form submitted to the Registrar for registration, signed by the

directors of the company and shall be accompanied by a

(a)

prescribed form B1;

(b)

signed declaration by all directors, contained on

the prescribed form referred to in paragraph (a) confirming

that the company

(i)

is not a regulated entity;

(ii) has discharged in full any liabilities

towards its creditors and, or such liabilities have been

written off by its creditors, other than if applicable, any

outstanding fees to the company’s current officers or

current corporate service providers and, or any loans

payable to any of the company’s shareholders;

(iii) has no pending court proceedings in, or

outside of Malta;

(iv) does not have any assets in excess of five

thousand euro (€5,000);

(v)

has not entered into any deeds or

contracts in the previous six months, other than with

service providers to the company;

(vi) has no outstanding amounts due to any

government authority or body;

(c)

confirmation by any of the directors of the

company that

(i)

a shareholders’ resolution has been duly

adopted to approve the simplified voluntary dissolution

procedure referred to in this article, in accordance with

the company’s memorandum and articles of association;

(ii)

all bank accounts, if any, have been

closed;

(iii) where applicable, an application has been

filed online for the de-registration of the company for

value added tax purposes in Malta;

(iv) no persons are employed by the company

other than any person who is an officer of the company.

(4) The directors are required to confirm to the Registrar in

their personal capacity, as the last appointed officers of the

company, that they shall be retaining the details of the beneficial

owners and financial records as mandated by law or duly inform the

Registrar as to who is the designated person to retain such

information.

(5) The directors and secretary of the company shall retain all

their po wers an d d uties under th e Act unt il t he d ate of th e

company’s name is struck off from the register.

(6) If the Registrar is satisfied that all the conditions

established by the foregoing sub-articles have been complied with,

he shall proceed to publish a notice in the Gazette or on the website

maintained by the Registrar and in a daily newspaper circulating

wholly or mainly in Malta that, at the expiration of three months

from the date of the publication of the said notice, the company’s

name shall be struck off from the register.

(7) Any interested person may, by means of an application,

request the court to order the restoration of the company’s name on

the register after it has been struck off.

(8) Notwithstanding sub-articles (5) and (6), the liability, if

any, of every director or other officer of the company and of every

member of the company shall subsist and may be enforced as if the

name of the company had not been struck off from the register.

(9) Any director of a company making a false declaration shall be

guilty of an offence and liable on conviction to a fine (multa) of not

more than forty-six thousand and five hundred and eighty-seven euro

(€46,587), or to imprisonment for a term not exceeding three years, or

to both such fine and imprisonment, and if the debts of the company

are not paid or settled in full within the period stated in the declaration,

it shall be presumed, until the contrary is shown, that the director did

not have reasonable grounds for this opinion.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 215 Meaning of "contributory". — COMPANIES ACT Open official source

The term "contributory" means every person liable to

contribute to the assets of a company in the event of its dissolution,

and the provisions of articles 216 and 217 shall apply for

determining the persons so liable

Provided that a reference in a company’s memorandum or

articles to a contributory shall not, unless the context otherwise

requires, include a person who is a contributory only by virtue of

article 217.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 216 Liability as contributories of present and past members. — COMPANIES ACT Open official source

In the winding up of a company every present and past

member shall be liable to contribute to the assets of the company to

an amount sufficient for payment of its debts and liabilities, and the

costs, charges and expenses of the winding up, and for the

adjustment of rights of the contributories among themselves,

subject to the following qualifications -

(a) no contributions shall be required from any member

exceeding the amount, if any, unpaid on the shares in

respect of which he is liable as a present or past

member;

(b) a past member shall not be liable to contribute in any

of the following cases -

(i)

if he has ceased to be a member for at least one

year before the dissolution of the company;

(ii)

in respect of any debt or liability contracted after

he has ceased to be a member;

(iii)

unless it appears to the court that the existing

members are unable to satisfy the contributions

required to be made by them in pursuance of this

Act;

(c) a sum due to any member of a company, as a member,

by way of dividends, profits or otherwise shall not be

deemed to be a debt of the company payable to that

member in the case of competition between himself

and any other creditor not being a member of the

company, but any such sum may be taken into account

for the purpose of the final adjustment of the rights of

the contributories among themselves.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 217 Liability of past directors and shareholders. — COMPANIES ACT Open official source

(1) The provisions of sub-articles (2) and (3) shall only

apply following the dissolution of a company where a company

before its dissolution -

(a) has made a payment out of capital in respect of the

redemption or purchase of any of its own shares,

which payment is referred to in the following

provisions of this article as "the relevant payment";

and

(b) the aggregate amount of the company’s assets and the

amounts paid by way of contribution to its assets in

terms of article 216, apart from the provisions of this

article, is not sufficient for payment of its debts and

liabilities, and the expenses of the winding up.

(2) Where the dissolution has occurred within twelve months of

the date on which the relevant payment was made, then -

(a) the person from whom the shares were redeemed or

purchased, and

(b) the directors who authorised the redemption or

purchase,

shall, so as to enable the insufficiency referred to in sub-article

(1)(b) to be met, be liable to contribute to the company’s assets to

the extent referred to in sub-article (3).

(3) A person from whom any of the shares were redeemed or

purchased shall be liable to contribute an amount not exceeding so

much of the relevant payment as was made by the company in

respect of his shares; and the directors shall be jointly and severally

liable with that person to contribute that amount.

SUB-TITLE I - WINDING UP BY THE COURT

Chapter I - General Provisions

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 218 Dissolution and winding up application. — COMPANIES ACT Open official source

(1) A request to the court (hereinafter referred to as the

"winding up application") for the -

(a) winding up of a company by the court in accordance

with article 214(1)(a); or

(b) dissolution and winding up of a company by the court

in accordance with article 214(2)(a); or

(c) dissolution and winding up of a company in

accordance with article 214(2)(b),

shall be made by means of an application which may be made

either by the company following a decision of the general meeting

or by its board of directors, or by any debenture holder, creditor or

creditors, or by any contributory or contributories

Provided that an application in terms of paragraphs (b) or

(c) may also be made by any shareholder or director of the

company.

(2) Except as provided in sub-article (3), a contributory shall

not be entitled to make a winding up application unless -

(a) the shares in respect of which he is a contributory, or

some of them, either were originally allotted to him, or

have been held by him, and registered in his name, for

at least six months during the eighteen months before

the date of the company’s dissolution, or have

devolved on him through the death of a former

shareholder; or

(b) the number of members was reduced and remains

reduced below the minimum prescribed by article 72

while he holds shares in respect of which he is a

contributory.

(3) Notwithstanding the provisions of sub-article (1), a person

who is liable under article 217 to contribute to a company’s assets

in the event of its dissolution may only file a winding up

application on either of the grounds set out in article 214(2)(a)(ii)

and (b)(iii).

(4) The Registrar may file a winding up application where it

appears to him that it is expedient or in the public interest that a

company should be dissolved and wound up for any of the reasons

set out in article 214(2)(b)(ii) and (iii).

(5) By virtue of article 294, a winding up application for a

winding up by the Court may be filed notwithstanding that a

company is being wound up voluntarily. Such an application may

also be made by the official receiver appointed in accordance with

the provisions of article 225.

(6) The directors, the company secretary, and every

contributory and creditor of the company shall be entitled to make

submissions on the hearing of a winding up application made under

this article.

(7) In the event of a winding up application made under sub-

article (1)(c), if the court decides that the company shall be wound

up voluntarily, the provisions of Sub-title II of this Title other than

article 265 shall apply.

(8) On the making of a winding up application, a copy thereof

shall forthwith be forwarded by the Registrar of Courts to the

Registrar for registration.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 219 Powers of the court. — COMPANIES ACT Open official source

(1) On the hearing of the winding up application, the

court may either dismiss the application or make an order acceding

thereto (hereinafter referred to as a "winding up order") and in

either case make such other orders, including provisional orders,

and adjourn the hearing conditionally or otherwise as it thinks fit;

but no winding up order shall be made before the application has

been served on such persons as the court in the circumstances, and

upon information given by the applicant, deems it appropriate to

call upon to make their submissions.

(2) Notwithstanding the provisions of sub-article (1), where the

Court is satisfied that the requirements of article 218(1)(a) have

been complied with, the Court shall accede to the application.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 220 Power to stay proceedings against company. — COMPANIES ACT Open official source

At any time after the filing of a winding up application,

and before a winding up order has been made, the company, or any

creditor or contributory, may apply to the court for a stay of judicial

proceedings pending against the company, and the court may stay

those proceedings accordingly on such terms as it thinks fit.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 221 Dispositions of property etc., after date of deemed dissolution. — COMPANIES ACT Open official source

In a winding up by the court, any disposition of the

property of the company, including any rights of action, and any

transfer of shares, or alteration of the status of the members of the

company, made after the date of its deemed dissolution, shall be

void, unless the court otherwise orders.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 222 Warrants not to be carried into effect against company. — COMPANIES ACT Open official source

When a company is being wound up by the court, any act

or warrant, whether precautionary or executive, other than a

warrant of prohibitory injunction, issued or carried into effect

against the company after the date of its deemed dissolution, shall

be void.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 223 Deemed date of dissolution. — COMPANIES ACT Open official source

(1) Where a winding up order has been made, the

company shall be deemed to have been dissolved at the time of the

filing of the winding up application

Provided that where a winding up order has been made in

terms of article 214(2)(b)(iii), the company shall be deemed to have

been dissolved on the date when the winding up order is made

Provided further that where a winding up order has been

made by virtue of article 218(1)(a), the date of dissolution shall be

the date of passing of the resolution for dissolution and

consequential winding up by the Court or such later date as may be

specified in the said resolution.

(2) Notwithstanding the provisions of sub-article (1), where,

before the filing of a winding up application, an extraordinary

resolution had been passed by the company for it to be dissolved

and consequently wound up voluntarily, the company shall be

deemed to have been dissolved at the time of the passing of the

resolution, and unless the court, upon proof of fraud or mistake

thinks fit otherwise to direct, all proceedings taken in the voluntary

winding up shall be deemed to have been validly taken.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 224 Consequences of a winding up order. — COMPANIES ACT Open official source

(1) On the making of a winding up order, or on the

dismissal of a winding up application, a copy thereof shall

forthwith be forwarded by the Registrar of Courts to the Registrar

for registration.

(2) Where a winding up order has been made or a provisional

administrator has been appointed in accordance with the provisions

of article 228, no action or proceeding shall be proceeded with or

commenced against the company or its property except by the leave

of the court and subject to such terms as the court may impose.

Chapter II - Official Receiver

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 225 Official receiver. — COMPANIES ACT Open official source

(1) The Minister shall appoint a senior official of the

Agency to be the official receiver for the purposes of this Act and

may at any time terminate any such appointment or designation.

(2) The official receiver may authorise in writing any individual

to perform any of the functions assigned to the official receiver under

this Act or any other law.

(3) Notwithstanding anything to the contrary contained in this Act

or any other law, the official receiver and any other individual

authorised in terms of sub-article (2), shall be exempt from any

personal liability whatsoever, including any liability in damages for

anything done or omitted to be done in the discharge or purported

discharge of any of his functions under this Act or under any other law,

or otherwise in the exercise of his official duties, unless the act or

omission is shown to have been done or omitted to be done, as the case

may be, in bad faith.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 226 Statement of company’s affairs to be submitted to official receiver. — COMPANIES ACT Open official source

(1) Where the court has made a winding up order or

appointed a provisional administrator, there shall be made out and

submitted to the official receiver a statement as to the affairs of the

company in the prescribed form, or in such form as the official

receiver accepts, verified by affidavit, and showing the particulars

of its assets, debts and liabilities, the names, residences and

occupations of its creditors, the securities held by them

respectively, the dates when the securities were respectively given,

and such further or other information as may be prescribed or as the

official receiver may require.

(2) The statement shall be submitted and verified by one or

more of the persons who are at the relevant date the directors of the

company and by such of the persons hereinafter in this sub-article

mentioned, as the official receiver may require to submit and verify

the statement, that is to say, persons -

(a) who are or have been officers of the company at any

time in the three years immediately preceding the date

of the winding up order;

(b) who have taken part in the formation of the company

at any time within twelve months before the relevant

date;

(c) who are in the employment of the company, or have

been in the employment of the company within the

said twelve months, and are in the opinion of the

official receiver capable of giving the information

required;

(d) who are or have been within the said twelve months

officers of or in the employment of a company which

is, or within the said twelve months was, an officer of

the company to which the statement relates.

(3) The statement shall be submitted within twenty-one days

from the relevant date or within such extended period as the official

receiver or the court may for special reasons appoint.

(4) Any person making or concurring in making the statement

and affidavit required by this article shall be allowed, and shall be

paid by the official receiver or provisional administrator, as the

case may be, out of the assets of the company such costs and

expenses incurred in and about the preparation and making of the

statement and affidavit as the official receiver may consider

reasonable subject to an appeal to the court.

(5)

The official receiver, if he thinks fit, may -

(a) at any time release a person from an obligation

imposed on him under sub-article (1) or (2); or

(b) either when giving the period mentioned in sub-article

(3) or subsequently, extend the period so mentioned,

and where the official receiver has refused to exercise a power

conferred by this sub-article, the court, if it thinks fit, may exercise

it.

(6)

If any person, without reasonable excuse, makes default in

complying with the requirements of this article, he shall be liable to

a penalty, and, for every day during which the default continues, to

a further penalty.

(7) Any person stating himself in writing to be a creditor or

contributory of the company shall be entitled personally or by his

agent at all reasonable times, on payment of the prescribed fee, to

inspect the statement submitted in pursuance of this article, and to a

copy thereof or extract therefrom.

(8) In this article the expression "relevant date" means, in a

case where a provisional administrator is appointed, the date of his

appointment, and, in a case where no such appointment is made, the

date of the winding up order.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 227 Report by official receiver. — COMPANIES ACT Open official source

(1) In a case where a winding up order is made, the

official receiver shall, as soon as practicable after receipt of the

statement to be submitted under article 226 or, in a case where he

or the court orders that no statement shall be submitted, as soon as

practicable after the date of the order, carry out such investigations

as he may deem appropriate and submit to the court a preliminary

report, if any, as he thinks fit -

(a) as to the amount of share capital issued, and paid up,

and the estimated amount of the assets and liabilities;

(b) if the company has failed, as to the causes of the

failure; and

(c) whether in his opinion further enquiry is desirable as

to any matter relating to the promotion, formation or

failure of the company or the conduct of the business

thereof.

(2) The official receiver may also, if he thinks fit, make a

further report, or further reports, stating the manner in which the

company was formed and whether in his opinion any fraud has been

committed by any person in its promotion or formation or by any

officer of the company since the formation thereof, and any other

matter which, in his opinion, is desirable to bring to the notice of

the court.

(3) If the official receiver states in any such further report that

in his opinion a fraud has been committed as specified in sub-

article (2), the court shall have the further powers provided in

article 260, without prejudice to the exercise of any other powers it

may have.

Chapter III - Liquidators in a winding up by the court

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 228 Appointment and powers of provisional administrator. — COMPANIES ACT Open official source

(1) The court may by order appoint a provisional

administrator at any time after the presentation of a winding up

application and before the making of a winding up order, and either

the official receiver or any other competent person may be so

appointed.

(2) The provisional administrator shall carry out such functions

and powers in relation to the administration of the estate or

business of the company as the court may specify in the order

appointing him.

(3) The provisional administrator holds office until such time

as the winding up order is made or the winding up application is

dismissed unless before such time he resigns or he is removed by

the court upon good cause being shown.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 229 Functions of official receiver in relation to office of liquidator. — COMPANIES ACT Open official source

(1) The official receiver, by virtue of his office and upon

notification by the Court, becomes the liquidator of the company and

continues in office until another person becomes liquidator under the

provisions of this Title, and shall, upon notification by the Court, be

the liquidator during any vacancy.

(2) The official receiver shall, within fourteen days of notification

by the court, deliver an authenticated copy of such notification to the

Registrar for registration.

(3) At any time when he is the liquidator of the company, the

official receiver may summon separate meetings of the company’s

creditors and contributories for the purpose of choosing a person to

be liquidator of the company in place of the official receiver.

(4) It shall be the duty of the official receiver to summon

meetings under sub-article (3) if he is at any time requested to do so

by one-fourth in value of the company’s creditors.

(5) Without prejudice to the provisions of sub-articles (3) and

(4), the official receiver shall within a period of twelve weeks from

the date of the winding up order give notice to the court and to the

company’s creditors and contributories of his intentions whether or

not to summon the said meetings. The notice shall indicate the right

of the creditors arising under sub-article (3).

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 230 Choice of liquidator at meetings of creditors and contributories. — COMPANIES ACT Open official source

(1) The provisions of this article shall apply where a

company is being wound up by the court and separate meetings of

the company’s creditors and contributories are summoned for the

purpose of choosing a person to be liquidator of the company in

accordance with article 229.

(2) The creditors and the contributories at their respective

meetings may nominate a person to be liquidator. The nomination

by the creditors shall be made by resolution of the creditors, and

the nomination by the contributories shall be made by a resolution

of the contributories.

(3) The liquidator shall be the person nominated by the

creditors or, where no person has been so nominated, the person, if

any, nominated by the contributories.

(4) Where no person is nominated by either the creditors or the

contributories to act as liquidator, the official receiver may, at any

time, apply to the court for the appointment of a liquidator.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 231 Meetings of creditors and contributories. — COMPANIES ACT Open official source

(1) The dates of meetings of creditors and contributories

s h a l l b e f i x e d an d t h e m e e t i n g s s h a l l b e su m m o n e d b y t h e

liquidator.

(2) The notices of meetings of creditors and contributories

shall state the time and place appointed for the respective meetings.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 232 Creditors entitled to vote. — COMPANIES ACT Open official source

(1) In the case of a first meeting of creditors or of an

adjournment thereof a person shall not be entitled to vote as a

creditor unless he has duly lodged with the liquidator, not later than

the time mentioned for that purpose in the notice convening the

meeting or adjourned meeting, a proof of the debt which he claims

to be due to him from the company.

(2) In the case of a subsequent meeting of creditors held in a

winding up by the court, a person shall not be entitled to vote as a

creditor unless he has lodged with the liquidator a proof of the debt

which he claims to be due to him from the company and such proof

has been admitted wholly or in part before the date on which the

meeting is held.

(3) The chairman as provided for in article 297(3) shall have

power to admit or reject a creditor ’s proof of his debt for the

purpose of voting, but his decision shall be subject to appeal to the

court. If he is in doubt whether a creditor’s proof of his debt shall

be admitted or rejected, the chairman shall mark it as objected to

and allow the creditor to vote, subject to the vote being declared

invalid in the event of the objection being sustained.

(4) A guarantor of a debt owed by the company shall not be

deemed a creditor for the purposes of this Title unless he has

discharged the guaranteed debt in full.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 233 Notice of first meeting to officers of company. — COMPANIES ACT Open official source

(1) The official receiver shall also give to each of the

officers of the company who, in his opinion ought to attend the first

meetings of creditors and contributories, seven days’ notice of the

time and place appointed for each meeting.

(2) It shall be the duty of every officer who is given notice of

such meeting to attend if so required by the official receiver and if

such officer fails to attend the official receiver shall report such

failure to the court.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 234 Summary of statement of affairs. — COMPANIES ACT Open official source

(1) The official receiver shall also, as soon as practicable

before the first meeting, send to each creditor mentioned in the

company’s statement of affairs, and to each person appearing from

the company’s accounting records or otherwise to be a contributory

of the company, a summary of the company’s statement of affairs,

including the causes of its failure, and any observations thereon

w h i c h t h e o ff i c i a l r e c e i v e r m a y t h i n k f i t t o m a k e , b u t t h e

proceedings at a meeting shall not be invalidated by reason of any

summary aforesaid not having been sent or received before the

meeting.

(2) Where prior to the winding up order, winding up of the

company has commenced voluntarily, the official receiver may, if

in his absolute discretion he sees fit to do so, send to the persons

aforesaid or any of them an account of such voluntary winding up

showing how such winding up has been conducted and how the

property of the company has been disposed of and any further

observations he may think fit to make.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 235 Where person other than the official receiver is appointed liquidator. — COMPANIES ACT Open official source

(1) Where in the winding up of a company by the court a

person other than the official receiver is appointed liquidator, that

person -

(a) shall not be capable of acting as liquidator until he has

notified his appointment to the Registrar;

(b) shall give the official receiver such information and

such access to and facilities for inspecting the

accounts, accounting records and documents of the

company and generally such aid as may be requisite

for enabling the official receiver to perform his duties

under this Act.

(2) The Registrar shall on receipt of the notice of appointment

specified in sub-article (1)(a) register it.

(3) Until the person appointed to act as liquidator is capable of

acting within the meaning of sub-article (1)(a), the official receiver

shall continue to act as liquidator.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 236 General provisions as to liquidators. — COMPANIES ACT Open official source

(1) A liquidator appointed in accordance with the

provisions of article 230 may resign or, on the application of any

creditor or contributory, may be removed by the court if it is

satisfied that there exist sufficient grounds for his removal.

(2) The official receiver and any person appointed as liquidator by

the Court shall be remunerated out of the assets of the company or

otherwise, and on such basis as the Court may direct.

(3) More than one person may be appointed to exercise the

function of liquidator of a company, and the remuneration of each

liquidator so appointed shall be determined on such basis as the

court may direct.

(4) A vacancy resulting from the death or resignation of a

liquidator or from his removal by the court, shall be filled by the

court.

(5) If more than one liquidator is appointed by the court, the

court shall declare whether any act which is by this Act required or

authorised to be done by the liquidator is to be done by all or any

one or more of the persons so appointed.

(6) Subject to the provisions of article 305, the acts of a

liquidator shall be valid notwithstanding any defects that may

afterwards be discovered in his appointment.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 237 Custody and control of company’s property. — COMPANIES ACT Open official source

Where a company is being wound up by the court, the

liquidator or the provisional administrator, as the case may be, shall

take into his custody or under his control all the property and all

rights to which he has reasonable cause to believe the company to

be entitled.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 238 Powers of liquidator. — COMPANIES ACT Open official source

(1) The liquidator in a winding up by the court shall have

the power, with the sanction either of the court or of the liquidation

committee appointed under the provisions of Chapter IV of this

Sub-title -

(a) to bring or to defend any action or other legal

proceeding in the name and on behalf of the company;

(b) to carry on the business of the company so far as may

be necessary for the beneficial winding up thereof;

(c) to pay creditors according to their ranking at law;

(d) to make any compromise or arrangement with

creditors or persons claiming to be creditors, or having

or alleging themselves to have any claim, present or

future, certain or contingent, ascertained or which may

be due in damages against the company or whereby the

company may be rendered liable, and to refer any such

matter to arbitration;

(e) to make calls on contributories or alleged

contributories and to effect any compromise or

arrangement in relation to debts, liabilities and claims

of the company present or future, certain or

contingent, ascertained or which may be due in

damages, subsisting or supposed to subsist between

the company and a contributory or alleged

contributory or other debtor or alleged debtor, and all

questions in any way relating to or affecting the assets

or the winding up of the company, on such terms as

may be agreed, and take any security for the discharge

of any such call, debt, liability or claim and give a

complete discharge in respect thereof;

(f)

to represent the company in all matters and to do all

such things as may be necessary for winding up the

affairs of the company and distributing its assets

Provided that the Court may provide by an order that the

liquidator may, where there is no liquidation committee, exercise

any of the powers mentioned in paragraphs (a) or (b) without the

sanction of the Court.

(2) The liquidator in a winding up by the court shall, in

particular, have the power -

(a) to sell the movable and immovable property, including

any right, of the company by public auction or private

agreement with power to transfer the whole or any part

thereof;

(b) to do all acts and to execute, in the name and on behalf

of the company, all deeds, receipts and other

documents;

(c) to raise on the security of the assets of the company

any money requisite;

(d) to appoint a mandatory to act for him in his capacity as

liquidator for particular purposes.

(3) The exercise by the liquidator in a winding up by the court

of the powers conferred by this article shall be subject to the

control of the court, and any creditor or contributory may apply to

the court with respect to any exercise or proposed exercise of any

of those powers.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 239 Exercise and control of liquidator’s powers. — COMPANIES ACT Open official source

(1) Subject to the provisions of this Act, the liquidator of

a company which is being wound up by the court shall, in the

administration of the assets of the company and in the distribution

thereof among its creditors, have regard to any directives that might

be given by resolution of the creditors or contributories at any

general meeting or by the liquidation committee, and any directives

given by the creditors and contributories in common shall, in case

of conflict with any directives given by the liquidation committee,

be deemed to override such latter directives; otherwise the

directives given by the liquidation committee shall prevail.

(2) The liquidator may summon general meetings of the

creditors or contributories for the purpose of ascertaining their

wishes, and it shall be his duty to summon meetings at such times

as the creditors or contributories, by resolution, either at the

meeting appointing the liquidator or otherwise, may direct, or

whenever requested in writing to do so by one-fourth in value of

the creditors or contributories, as the case may be.

(3) The liquidator may apply to the court for directions in

relation to any particular matter arising under the winding up.

(4) If any person is aggrieved by any act or decision of the

liquidator, that person may apply to the court and the court may

confirm, reverse or modify the act or decision complained of, and

make such order on the matter as it thinks just.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 240 Books to be kept by liquidator. — COMPANIES ACT Open official source

Every liquidator of a company which is being wound up

by the court shall keep proper books in which he shall cause to be

made entries or minutes of proceedings at meetings, and of such

other matters as may be prescribed.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 241 Payments of liquidator into bank. — COMPANIES ACT Open official source

(1) Upon his appointment the liquidator shall notify the

Registrar of any bank account which the liquidator shall use for the

purposes of receiving and making payments on behalf of the

company. The liquidator shall not be entitled to receive and make

payments until he has made such notification.

(2) If any such liquidator retains for more than ten days, other

than in a bank account mentioned in sub-article (1), a sum exceeding

five hundred euro (500) or such other amount as the Registrar in any

particular case authorizes him to retain, then, unless he explains the

retention to the satisfaction of the Registrar, the liquidator shall pay

interest on the amount so retained in excess, at the annual rate of

two percentage points above the Central Bank of Malta minimum

discount rate and shall be liable to forfeiture of all or such part of

his remuneration as the court may think just, and to be removed

from his office by the court, and shall furthermore be liable to pay

any expenses occasioned by his default.

(3) A liquidator of a company which is being wound up by the

court shall not pay any sums received by him as liquidator into an

account or accounts other than an account or accounts which has

been notified to the Registrar.

(4) It shall not be lawful to issue precautionary or executive

warrants over any accounts opened by the liquidator in accordance

with this article.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 242 Audit of liquidator’s accounts. — COMPANIES ACT Open official source

(1) Every liquidator of a company which is being wound

up by the court shall, at such times as may be prescribed but not

less than twice in each year during his tenure of office, send to the

Registrar, and to such other place as the Registrar may direct, an

account of his receipts and payments as liquidator.

(2) The account shall be in a proper form, shall be made in

duplicate, and shall be duly certified by the liquidator

Provided that the Minister may make regulations

prescribing the proper form in which the account is to be made.

(3) The Registrar may, at the company’s expense, cause such

accou nt t o be aud ited, and for t he purpose of the aud it t he

liquidator shall furnish the auditor appointed by the Registrar with

such vouchers and information as the auditor may require and the

auditor may at any time require the production of and inspect any

accounting records or documents kept by the liquidator.

(4) When the account has been audited, one copy thereof shall

be delivered to the Registrar for registration and the other copy

shall be delivered to the court for filing, and each copy shall be

open to inspection of any person on payment of the prescribed fee.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 243 Control over liquidators. — COMPANIES ACT Open official source

(1) If an application is made to the court by any creditor

or contributory complaining on the conduct of a liquidator of a

company the court shall inquire into the matter and take such action

thereon as it may think expedient.

(2) The Registrar may at any time require any liquidator of a

company which is being wound up by the court to answer any

inquiry in relation to any winding up in which he is engaged, and

the Registrar may, if he thinks fit, apply to the court to examine the

liquidator or any other person on oath concerning the winding up.

(3) The Registrar may also direct an investigation to be made

of the accounts, accounting records and documents of the

liquidator.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 244 Release of liquidator from his appointment. — COMPANIES ACT Open official source

(1) When the liquidator of a company which is being

wound up by the court has realised all the property of the company,

or so much thereof as can, in his opinion, be realised without

needlessly protracting the liquidation, and has distributed a final

payment, if any, to the creditors, and has adjusted the rights of the

contributories among themselves, and made a final return, if any, to

t h e c o n t r i b u t o r i e s , o r h a s r e s i g n e d , t h e co u r t s h a l l , o n t h e

liquidator ’s application, cause a report to be prepared on the

liquidator’s accounts at the company’s expense. On being satisfied

that the liquidator has complied with the requirements of this Act

and such other requirements, if any, as may be laid down by it and,

after taking into consideration the report and any objection which

may be raised by any creditor or contributory or person interested,

the court shall proceed to release the liquidator from his

appointment.

(2) The Registrar of Courts shall forthwith deliver a notice of

the release to the Registrar for registration.

Chapter IV - Liquidation Committees in a winding up by the

court

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 245 Determination whether committee is to be appointed. — COMPANIES ACT Open official source

(1) When a winding up order has been made by the court,

the separate meeting of the creditors referred to in article 229

summoned for the purpose of choosing a liquidator in place of the

official receiver shall determine further whether or not to appoint a

liquidation committee to act with the liquidator and who are to be

the members of the committee, if appointed.

(2) Where a liquidation committee has not been appointed in

accordance with the provisions of sub-article (1), the liquidator,

other than the official receiver, may at any time, if he thinks fit,

summon a separate meeting of the company’s creditors for the

purpose of determining whether such a committee should be

appointed and, if it is so determined, of appointing it.

(3) Where a liquidation committee has not been appointed in

accordance with the provisions of sub-article (1), the liquidator,

other than the official receiver, shall summon a meeting of creditors

for the appointment of such a committee if he is requested to do so

by one-fourth in value of the company’s creditors.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 246 Constitution and proceedings of liquidation committee. — COMPANIES ACT Open official source

(1) The liquidation committee shall consist of not more

than five creditors of the company elected by the meeting of

creditors.

(2) Where the meeting of creditors does not appoint a

liquidation committee, the meeting of contributories may appoint

one of their members to make an application to the court for an

order to the liquidator that a further meeting of creditors be

summoned for the purpose of appointing a liquidation committee.

(3) If the meeting of creditors so summoned does not appoint a

liquidation committee, the meeting of contributories may do so.

(4) The committee shall then consist of not less than three and

not more than five contributories elected by that meeting.

(5) The committee shall meet at such times as they may from

time to time determine, and, failing such appointment, at least once

ev ery si x m ont hs, an d t he li quid ator or any mem ber of the

committee may also call a meeting of the committee as and when

he thinks necessary.

(6) A meeting of the committee may not be held unless a

majority in number of the committee is present and decisions shall

be taken by a majority in number of the members present at the

meeting.

(7) A member of the committee may resign by notice in writing

signed by him and delivered to the liquidator.

(8) If a member of the committee is absent from five

consecutive meetings of the committee without the leave of those

members who together with himself represent the creditors or

contributories, as the case may be, his office shall thereupon

become vacant.

(9) A member of the committee may be removed by a

resolution of a meeting of the creditors, if he represents creditors,

or by a resolut ion of a meeti ng o f t he cont rib utories, if h e

represents contributories, in accordance with article 298

Provided that at least seven days’ notice of the meeting has

been given, stating the object of the meeting.

(10) On a vacancy occurring in the committee, the liquidator

shall forthwith summon a meeting of creditors or contributories, as

the case may require, to fill the vacancy, and the meeting may, by

resolution, re-appoint the same or appoint another creditor or

contributory to fill the vacancy

Provided that if the liquidator, having regard to the state of

the winding up, is of the opinion that it is unnecessary for the

vacancy to be filled he may apply to the court and the court may

make an order that the vacancy shall not be filled, or shall not be

filled except in such circumstances as may be specified in the order.

(11) The continuing members of the committee, if not less than

two, may act notwithstanding any vacancy in the committee.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 247 Powers of official receiver where there is no committee. — COMPANIES ACT Open official source

Where there is no liquidation committee, the official

receiver may, on the request of the liquidator, do any act or thing or

give any direction or permission which is by this Act authorised or

required to be done by the committee.

Chapter V - General Powers of the court in a winding up

by the court

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 248 Power to stay winding up. — COMPANIES ACT Open official source

(1) The court may at any time after a winding up order,

on the application either of the liquidator or the official receiver or

any creditor or contributory, and on proof to the satisfaction of the

court that all proceedings in relation to the winding up ought to be

stayed, make an order staying the proceedings, for such duration

and on such terms and conditions as the court thinks fit. Any such

stay of proceedings shall not affect the continuing validity and

operation of the winding up orders.

(2) On an application under this article the court may, before

making an order, require the official receiver or liquidator to

furnish to the court a report with respect to any facts or matters

which are in its opinion relevant to the application.

(3) A copy of every order made under this article shall

forthwith be forwarded by the Registrar of Courts to the Registrar

for registration.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 249 Settlement of list of contributories and application of assets. — COMPANIES ACT Open official source

As soon as may be after making a winding up order, the

court shall draw up a list of contributories and shall have the power

to rectify the register of members, if required, and shall cause the

assets of the company to be collected, and applied in the discharge

of the company’s liabilities in accordance with the provisions of

article 302

Provided that, where it appears to the court that it will not

be necessary to make calls on or adjust the rights of contributories,

the court may dispense with the drawing up of a list of

contributories.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 250 Delivery of property to liquidator. — COMPANIES ACT Open official source

The court may, at any time after making a winding up

order, require -

(a) any contributory for the time being on the list of

contributories; and

(b) any person who holds any money, property or

accounting records and documents in his hands to

which the company is prima facie entitled, to pay,

deliver, convey, transfer or otherwise hand over such

money, property, accounting records or documents to

the liquidator forthwith or within such time as the

court directs.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 251 Debts due by contributory and extent of set-off. — COMPANIES ACT Open official source

(1) The court may at any time after making a winding up

order, make an order on any contributory for the time being

appearing on the list of contributories to pay, in the manner

directed by the order, any money due from him to the company,

exclusive of any money payable by him by virtue of any call in

pursuance of the provisions of this Act.

(2) When all the creditors are paid in full, any money due on

any account whatever to a contributory from the company may be

set-off against any subsequent call made on him.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 252 Power to make calls. — COMPANIES ACT Open official source

(1) The court may, at any time after making a winding up

order, and either before or after it has ascertained the sufficiency of

t h e a s s e t s o f t h e c o m p a n y, m a k e c a l l s o n a l l o r a n y o f t h e

contributories for the time being appearing on the list of

contributories to the extent of their liability, for payment of any

money which the court considers necessary to satisfy the debts and

liabilities of the company, and the costs, charges and expenses of

winding up, and for the adjustment of the rights of the

contributories among themselves, and make an order for payment

of any calls so made.

(2) In making a call the court may take into consideration the

probability that some of the contributories may partly or fully fail

to pay the call.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 253 Order of court to be conclusive evidence. — COMPANIES ACT Open official source

An order made by the court on a contributory shall, subject

to any right of appeal, be conclusive evidence that the money, if

any, thereby appearing to be due or ordered to be paid, is due; and

all other pertinent matters stated in the order shall be taken as truly

stated as against all persons and in all proceedings.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 254 Appointment of special manager. — COMPANIES ACT Open official source

(1) The liquidator or provisional administrator may, if

satisfied that the nature of the estate or business of the company, or

the interests of the creditors or contributories generally, require the

appointment of a special manager of the estate or business of the

company other than himself, apply to the court, and the court may,

on such application, by order appoint a special manager of the said

estate or business to act during such time as the court may direct,

with such functions and powers as may be entrusted to him by the

court in the order appointing him. The special manager shall

restrict his activities to the said functions and powers and to such

acts as may be necessary or consequential thereto.

(2) The special manager shall give an account of his

management as the court may direct.

(3) The special manager shall receive such remuneration as

may be fixed by the court.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 255 Fixing of time for proofs of debt. — COMPANIES ACT Open official source

The court may fix a time or times within which creditors

are to prove their debts or claims or are to be excluded from the

benefit of any distribution made before those debts are proved.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 256 Adjustments of rights of contributories. — COMPANIES ACT Open official source

The court shall adjust the rights of the contributories

among themselves and distribute any surplus among the persons

entitled thereto.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 257 Inspection of books of company. — COMPANIES ACT Open official source

(1) The court may, at any time after making a winding up

order, make such order for inspection of accounts, accounting

records and documents of the company by creditors and

contributories as the court thinks fit, and any accounts, accounting

records and documents in the possession of the company may be

inspected by creditors and contributories in accordance with that

order.

(2) Nothing contained in this article shall be construed as

excluding or restricting any rights deriving from any law of Malta

of a government department or other authority or person acting

under the authority of any such department or authority.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 258 Payments of costs of winding up out of assets. — COMPANIES ACT Open official source

(1) The court may, in the event of the assets being

insufficient to satisfy the liabilities, make an order as to the

payment out of the assets of the costs, charges and expenses

incurred in the dissolution and winding up in such order of priority

as the court thinks fit.

(2) In so doing the court shall have regard to the following

general order of priority -

(a) expenses properly chargeable or incurred by the

official receiver or the liquidator in preserving,

realising or collecting any of the assets of the

company;

(b) any other expenses incurred or disbursements made by

the official receiver or under his authority, including

those incurred or made in carrying on the business of

the company;

(c) the remuneration of the provisional administrator, if

any;

(d) any necessary disbursements by the special controller

in the course of his office in terms of articles 329A and

329B;

(e) the remuneration of the special controller;

(f)

the costs of the applicant, and of any person appearing

on the application whose costs are allowed by the

court;

(g) the remuneration of the special manager, if any;

(h) any amount payable to a person employed or

authorised to assist in the preparation of a statement of

affairs or of account;

(i)

any allowance made by order of the court, towards

costs on an application for release from the obligation

to submit a statement of affairs, or for an extension of

time for submitting such a statement;

(j)

any necessary disbursements by the liquidator in the

course of his administration, including any expenses

incurred by members of the liquidation committee or

their representatives and allowed by the liquidator;

(k) the remuneration of any person employed by the

liquidator to perform any services for the company, as

required or authorised by the provisions of this Act;

(l)

the remuneration of the official receiver and of the

liquidator;

(m)

any new financing granted to the company for the

purpose of a recovery procedure in terms of articles 329A

and 329B.

(3) For the purposes of sub-article (2), "official receiver" shall

include any individual authorised in terms of article 225(2).

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 259 Summoning of persons suspected of having property of the company, etc. — COMPANIES ACT Open official source

The court may, at any time after the appointment of a

provisional administrator or the making of a winding up order,

summon before it any officer of the company or person known or

suspected to have in his possession any property of the company or

supposed to be indebted to the company, and any person whom the

court deems capable of giving information concerning the

promotion, formation, trade, dealings, affairs or property of the

company. The court may require any such officer or person to

produce any accounting records and documents in his custody

relating to the company.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 260 Power to order examination of promoters and officers. — COMPANIES ACT Open official source

(1) Where a winding up order has been made by the

court, and the official receiver has made a report under this Act

stating that in his opinion a fraud has been committed by any

person in the promotion or formation of the company or by an

officer of the company in relation to the company since its

formation, the court may direct that person or officer to attend

before the court on a day appointed by the court for that purpose

and be examined as to the promotion or formation or the conduct of

the business of the company or as to his conduct and dealings as

officer thereof.

(2) The Official Receiver shall take part in the examination,

and for that purpose may be assisted by an advocate.

(3) The liquidator, where the official receiver is not the

liquidator, and any creditor or contributory may also take part in

the examination either personally or represented by an advocate.

(4) The court may put such questions to the person referred to

in sub-article (1) as the court thinks fit.

(5) The person shall be examined on oath and shall answer all

such questions as the court may put or allow to be put to him.

(6) A person ordered to be examined under this article shall,

before his examination, be furnished with a copy of the official

receiver ’s report and may, at his own cost be assisted by an

advocate, who shall be at liberty to put to him such questions as the

court may deem fit for enabling him to explain or qualify any

answers given by him

Provided that, if any such person applies to the court to be

discharged from any charges made or suggested against him, it

shall be the duty of the official receiver to appear on the hearing of

the application and call the attention of the court to any matters

which appear to the official receiver to be relevant, and if the court,

after hearing any evidence given or witnesses called by the official

receiver, grants the application, the court may allow the applicant

such costs as in its discretion it may think fit.

(7) Notes of the examination shall be taken down in writing,

and shall be read over to or by, and signed by, the person examined,

and may thereafter be used in evidence against him, and shall be

open to the inspection of any creditor or contributory at all

reasonable times.

(8) The court may, if it thinks fit, adjourn the examination from

time to time.

(9) An examination under this article may, if the court so

directs, be held before a magistrate, and the powers of the court

may, in any such case, be exercised by the magistrate before whom

the examination is held.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 261 Power to arrest absconding contributory. — COMPANIES ACT Open official source

The court, at any time before or after making a winding up

order, on proof of probable cause for believing that a contributory

is about to leave Malta or otherwise to abscond or to remove or

conceal any of his property for the purpose of evading payment of

calls or of avoiding examination respecting the affairs of the

company, may cause the contributory to be precluded from leaving

Malta and his accounting records, documents and movable property

to be seized, and the court may further order the contributory’s

detention and the safekeeping of his accounting records, documents

and movable property until such time as the court thinks fit.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 262 Powers of court cumulative. — COMPANIES ACT Open official source

Any powers conferred by this Act on the court shall be in

addition to any powers exercisable by any person under this Act of

instituting proceedings against any contributory or debtor of the

company or the estate of any contributory or debtor for the

recovery of any call or other sums.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 263 Liquidator may exercise certain powers of court. — COMPANIES ACT Open official source

The powers conferred and the duties imposed on the court

by this Act in respect of the following matters -

(a) the holding and conduct of meetings to ascertain the

wishes of creditors and contributories;

(b) the drawing up of lists of contributories and the

rectification of the register of members, if required,

and the collection and application of assets;

(c) the payment, delivery, conveyance, surrender or

transfer of money, property, accounting records or

documents to the liquidator;

(d) the making of calls;

(e) the fixing of a time within which debts and claims

must be proved;

may, subject to the provisions of this article or any other provision

of this Act, be exercised or performed by the liquidator, subject to

the control of the court

Provided that the liquidator shall not, without the special

leave of the court, rectify the register of members and shall not

make any call without either the special leave of the court or the

sanction of the liquidation committee.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 264 Striking of name of the company off the register. — COMPANIES ACT Open official source

(1) When the affairs of the company have been

completely wound up and the requirements of article 244 have been

complied with, the court shall make an order that the name of the

company be struck off the register from the date of the order.

(2) A copy of the order shall within fourteen days from the date

thereof be forwarded by the Registrar of Courts to the Registrar

who shall comply therewith.

SUB-TITLE II - VOLUNTARY WINDING UP

Chapter I - General Provisions

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 265 Notice of resolution for dissolution and consequential voluntary winding up. — COMPANIES ACT Open official source

(1) When a company has passed a resolution for

dissolution and consequential voluntary winding up, it shall, within

fourteen days after the date of dissolution of the company, deliver a

notice of the resolution to the Registrar for registration.

(2) If default is made by the company in complying with this

article, every liquidator or officer of the company who is in default

shall be liable to a penalty, and, for every day during which the

default continues, to a further penalty.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 266 Date of dissolution in a voluntary winding up. — COMPANIES ACT Open official source

Where a company is dissolved in accordance with the

provisions of article 214(1)(b), the date of dissolution shall be the

date of the passing of the resolution for dissolution and

consequential voluntary winding up or such later date as may be

specified in the said resolution

Provided that where the Court has ordered that the company

be wound up voluntarily by virtue of the provisions of article

214(3), the company shall be deemed to have been dissolved at the

time of the filing of the winding up application.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 267 Effects of voluntary winding up. — COMPANIES ACT Open official source

(1) In case of a voluntary winding up, the company shall,

from the date of dissolution, cease to carry on its business except so

far as may be required for the beneficial winding up thereof.

(2) Any transfer of shares, not being a transfer made with the

sanction in writing of the liquidator, and any alteration in the status

of the members of the company, made after, or so as to have effect

after, the date of dissolution, shall be void.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 268 Declaration of solvency. — COMPANIES ACT Open official source

(1) When it is proposed to dissolve and wind up a

company voluntarily, in accordance with article 214(1)(b), the

directors of the company, or in the case of a company having more

than two directors, the majority of the directors, may, at a meeting

of the directors make a declaration to the effect that they have made

a full inquiry into the affairs of the company, and that, having so

done, they have formed the opinion that the company will be able

to pay its debts in full within such period not exceeding twelve

months from the date of dissolution as may be specified in the

declaration.

(2) A declaration made in accordance with sub-article (1) shall

have no effect for the purposes of this Act unless -

(a) it is made within the month immediately preceding the

date of the passing of the resolution for dissolution and

consequential voluntary winding up of the company

and is delivered to the Registrar for registration

together with the notice of the said resolution pursuant

to article 265(1); and

(b) it contains a statement of the company’s assets and

liabilities made up to a date not earlier than the date of

the declaration by more than three months.

(3) When the court has ordered that the company be wound up

voluntarily by virtue of the provisions of article 214(3), the court

shall, before making the winding up order require the directors of

the company to make the declaration referred to in sub-article (1)

within such time as it may establish and the provisions of sub-

article (1) and of sub-article (2)(b) shall apply accordingly.

(4) Any director of a company making a declaration under this

article without having reasonable grounds for the opinion that the

company will be able to pay its debts in full within the period

specified in the declaration, shall be guilty of an offence and liable on

conviction to a fine (multa) of not more than forty-six thousand and

five hundred and eighty-seven euro (€46,587), or to imprisonment for

a term not exceeding three years, or to both such fine (multa) and

imprisonment; and if the debts of the company are not paid or

provided for in full within the period stated in the declaration, it

shall be presumed, until the contrary is shown that the director did

not have reasonable grounds for this opinion.

(5) A winding up in relation to which a declaration has been

made and delivered in accordance with this article is in this Act

referred to as "a members’ voluntary winding up", and a winding

up in relation to which a declaration has not been made and

delivered as aforesaid is in this Act referred to as "a creditors’

voluntary winding up".

Chapter II - Provisions applicable to a members’ voluntary

winding up

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 269 Provisions applicable to a member’s voluntary winding up. — COMPANIES ACT Open official source

The provisions contained in articles 270 to 275 shall,

subject to the provisions of article 276, apply in relation to a

members’ voluntary winding up.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 270 Appointment, remuneration and removal of liquidators. — COMPANIES ACT Open official source

(1) The company shall by extraordinary resolution

appoint a liquidator for the purpose of winding up the affairs and

d i s t r i b u t i n g t h e a s s e t s o f t h e c o m p a n y, a n d m a y f i x t h e

remuneration to be paid to him.

(2) Except where a company has appointed a liquidator at the

meeting at which the extraordinary resolution referred to in article

214(1)(b) has been passed, the directors shall call a general meeting

of the company, to be held within thirty days after the date of the

dissolution, for the purposes of sub-article (1).

(3) If for any cause whatsoever, a liquidator is not appointed by

the general meeting, any director shall apply to the court for the

appointment of a liquidator and the appointment shall be made by

the court; the application to the court for the appointment of a

liquidator under this sub-article shall be made within fourteen days

from the date for which the general meeting referred to in sub-

article (2) was summoned.

(4) If default is made by the directors in complying with the

provisions of sub-articles (2) and (3), every director who is in

default shall be liable to a penalty, and, for every day during which

the default continues, to a further penalty.

(5) Notwithstanding the preceding sub-articles of this article,

where the court has ordered that the company be wound up

voluntarily by virtue of the provisions of article 214(3), and a

declaration has been made in accordance with article 268, the court

shall in the winding up order, at its sole discretion, either appoint a

liquidator for the purpose of winding up the affairs and distributing

the assets of the company and shall fix the remuneration to be paid

to him; or give the necessary directives for the holding of a general

meeting for the purpose of appointing a liquidator and for the

fixing of the remuneration to be paid to him.

(6) A liquidator appointed in accordance with the provisions of

this article may be removed by extraordinary resolution of the

company; except where he has been appointed by the court in terms

of this article.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 271 Vacancy in office of liquidator. — COMPANIES ACT Open official source

(1) If a vacancy occurs by death, resignation or removal

in the office of liquidator appointed by the company, the company

shall by extraordinary resolution fill the vacancy.

(2) For the purposes of sub-article (1), a general meeting shall

be convened by any member, contributory or, if there were more

than one liquidator, by the continuing liquidator or liquidators and

notice of the meeting shall be given within fourteen days of the

occurrence of the vacancy referred to in sub-article (1).

(3) The general meeting shall be held in the manner provided

by this Act or by the memorandum and articles, or in such manner

as may, on the application of any member, contributory or by the

continuing liquidator, be determined by the court.

(4) If for any cause whatsoever a liquidator is not appointed in

the manner specified by sub-article (1), or if a vacancy occurs in

the office of a liquidator appointed by the Court, any member,

contributory or the continuing liquidator or liquidators may, at any

time thereafter, apply to the court for the appointment of a

liquidator, and the appointment shall be made by the court.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 272 Duty of liquidator in case of insolvency. — COMPANIES ACT Open official source

(1) If the liquidator is, at any time after a declaration is

made in accordance with article 268, of opinion that the company

will not be able to pay its debts within the period stated in the said

declaration, he shall forthwith summon a meeting of the creditors,

and shall lay before the meeting a statement of the assets and

liabilities of the company and the provisions of article 276 shall

apply.

(2) If the liquidator fails to comply with the provisions of this

article, he shall be liable to a penalty.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 273 Liquidator to hold general meeting where winding up continues for more than twelve months. — COMPANIES ACT Open official source

(1) Subject to the provisions of article 276, in the event

of the winding up continuing for more than twelve months, the

liquidator shall summon a general meeting of the company at the

end of the first period of twelve months from the commencement of

the winding up, and of each succeeding period of twelve months, or

at the first convenient date within three months from the end of the

period of twelve months, or within a longer term as the Registrar

may allow, and shall lay before the meeting an account of his acts

and dealings and of the conduct of the winding up during the

preceding twelve months, including a summary of receipts and

expenditure.

(2) If the liquidator fails to comply with the provisions of sub-

article (1) he shall be liable to a penalty.

(3) A member or members holding not less than one-tenth of

the paid up share capital having the right to vote at general

meetings of the company may at any time, by request in writing

require the liquidator to convene a general meeting of the company.

Such request shall be signed by such member or members and shall

state the objects of the meeting.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 274 Final meeting. — COMPANIES ACT Open official source

(1) Subject to the provisions of article 276, as soon as the

affairs of the company are fully wound up, the liquidator shall

make an account of the winding up, showing how the winding up

has been conducted and how the property of the company has been

disposed of and shall draw up a scheme of distribution indicating

the amount due in respect of each share from the assets of the

company, where applicable, and he shall cause the account to be

audited by one or more auditors appointed by ordinary resolution of

the company, or in default by the court. The liquidator shall

thereupon call a general meeting of the company for the purpose of

laying before it the account and scheme of distribution, if any,

together with the auditors’ report, and giving any explanation

thereof.

(2) Within seven days after the meeting, the liquidator shall

send to the Registrar a copy of the account and of the scheme of

distribution, if any, together with the auditors’ report, and shall

make a return to him of the holding of the meeting and of its date,

and if the copy is not sent or the return is not made in accordance

with this sub-article the liquidator shall be liable to a penalty, and,

for every day during which the default continues, to a further

penalty

Provided that, if a quorum is not present at the meeting, the

liquidator shall, in lieu of the return mentioned in this sub-article,

make a return that the meeting was duly summoned and that no

quorum was present thereat, and upon such a return being made the

provisions of this sub-article as to the making of the return shall be

deemed to have been complied with.

(3) If the liquidator fails to call a general meeting of the

company as required by this article, he shall be liable to a penalty.

(4) The provisions of article 153 shall apply to an auditor

appointed in terms of sub-article (1). Such auditor shall not be a

person who has held the office of auditor of the company at any

time during the last three years immediately preceding the date of

dissolution.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 275 Striking company’s name off the register. — COMPANIES ACT Open official source

(1) The Registrar, on receiving the account and the

scheme of distribution, if any, together with the auditors’ report and

either of the returns mentioned in article 274(2), shall forthwith

register them, and on the expiration of three months from the

publication of the notice referred to in article 401(1)(e), the

Registrar shall strike the name of the company off the register

Provided that the court may, on the application filed within

the said period of three months by the liquidator or by any other

person who appears to the court to have an interest, make an order

deferring the date at which the name of the company shall be struck

off the register for such time and subject to such conditions as the

court may provide.

(2) When an order by the court is made under the proviso to

sub-article (1), the Registrar of Courts shall forthwith forward a

copy of it to the Registrar for registration and the Registrar shall

defer applying the provisions of sub-article (1) in accordance with

the order given by the court referred to in that sub-article.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 276 Alternative provisions in case of insolvency. — COMPANIES ACT Open official source

Where the provisions of article 272 have effect, articles

283 to 285 shall apply to the winding up in lieu of articles 273 to

275, as if the winding up were a creditors’ voluntary winding up

and not a members’ voluntary winding up.

Chapter III - Provisions applicable to a creditors’ voluntary

winding up

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 277 Provisions applicable to creditors’ voluntary winding up. — COMPANIES ACT Open official source

The provisions of articles 278 to 285 shall apply in

relation to a creditors’ voluntary winding up.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 278 Meeting of creditors. — COMPANIES ACT Open official source

(1) The directors of the company shall cause a meeting of

the creditors of the company to be summoned for a day not later

than the fourteenth day from the day of the general meeting of the

company at which the resolution for dissolution and consequential

voluntary winding up is passed, and shall cause the notice of the

said meeting of the creditors to be sent by post to the creditors at

least seven days before the date of that meeting.

(2)

The directors of the company shall -

(a) cause a full statement of the position of the company’s

affairs, together with a list of the creditors of the

company and the estimated amount of their claims to

be laid before the meeting of the creditors to be held as

aforesaid; and

(b) appoint one of their number to preside at the said

meeting.

(3) It shall be the duty of the director appointed to preside at

the meeting of creditors to attend the meeting and preside thereat.

(4) Where the court has ordered that the company be wound up

voluntarily by virtue of the provisions of article 214(3) and a

declaration in accordance with article 268 has not been made, the

court shall, at its sole discretion, determine whether or not to

appoint a liquidator itself in the winding up order. Where no

liquidator is so appointed the general meeting of the company and

the meeting of the creditors referred to in this article, shall be

summoned within fourteen days from the date of the winding up

order, and notice thereof shall be given by the directors of the

company at least seven days before the date of such meetings; and

the provisions of sub-articles (2) and (3) shall apply.

(5) The directors of the company shall cause the notice of the

meeting of the creditors referred to in this article to be advertised

once in at least one local daily newspaper.

(6) If default is made by the directors, or the director, as the

case may be, in complying with any of the provisions of this article,

every director who is in default shall be liable to a penalty.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 279 Appointment and removal of liquidator. — COMPANIES ACT Open official source

(1) The creditors and the company at their respective

meetings mentioned in article 278 may nominate a person to be

liquidator for the purpose of winding up the affairs and distributing

the assets of the company. The nomination of a person as liquidator

by the creditors shall be made by a resolution of the creditors, and

the nomination by the company shall be made by an extraordinary

resolution of the company. If the creditors and the company

nominate different persons, the person nominated by the creditors

shall be liquidator, and if no person is nominated by the creditors

the person, if any, nominated by the company shall be liquidator.

(2) Where no person is nominated to act as liquidator by either

the creditors or the company, an application to the court for the

appointment of a liquidator shall be made by any director of the

company within fourteen days from the date for which the meeting

of the creditors referred to in article 278 was summoned, and the

appointment shall be made by the court.

(3) If default is made by the directors in complying with the

provisions of sub-article (2), every director who is in default shall

be liable to a penalty, and, for every day during which the default

continues, to a further penalty.

(4) A liquidator appointed in accordance with the provisions of

this article may be removed by a resolution of the creditors except

where he has been appointed by the court in terms of article 278 or

of this article.

(5) In this article, a resolution of the creditors shall have the

meaning assigned to it under article 298.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 280 Liquidation committee. — COMPANIES ACT Open official source

(1) The creditors at the meeting to be held in pursuance

of article 278, or at any subsequent meeting may, if they think fit,

by resolution appoint not more than five representatives of the

creditors to a liquidation committee, and if such committee is

appointed, the contributories may by resolution appoint up to five

persons to act as their representatives on the committee

Provided that the creditors may, if they think fit, resolve

that all or any of the persons so appointed by the company ought

not to be members of the liquidation committee, and, if the

creditors so resolve, the persons mentioned in the resolution shall

not, unless the court otherwise directs, be qualified to act as

members of the committee, and on any application to the court

under the provisions of this sub-article the court may, if it thinks

fit, appoint other persons to act as such members in place of the

persons mentioned in the resolution.

(2) Subject to the provisions of sub-article (1) or as may be

otherwise prescribed, the provisions of article 246, other than sub-

articles (1) to (4) thereof, shall apply with respect to a liquidation

committee appointed under this article as they apply with respect to

a liquidation committee appointed in a winding up by the court.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 281 Remuneration of liquidator. — COMPANIES ACT Open official source

The liquidation committee or, if there is no such

committee, the creditors, shall fix the basis of remuneration to be

paid to the liquidator or liquidators.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 282 Vacancy in office of liquidator. — COMPANIES ACT Open official source

If a vacancy occurs, by death, resignation or removal in

the office of a liquidator who was not appointed by the Court, a

new liquidator shall be appointed in accordance with the provisions

of article 279(1)

Provided that if a liquidator is not appointed in accordance

with the provisions of the said sub-article, any member or creditor

of the company may apply to the court for the appointment of a

liquidator and the appointment shall be made by the court.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 283 Liquidator to hold meeting of company and creditors where winding up continues for more than twelve months. — COMPANIES ACT Open official source

(1) In the event of the winding up continuing for more

than twelve months, the liquidator shall summon a general meeting

of the company and a meeting of the creditors at the end of the first

period of twelve months from the commencement of the winding

up, and of each succeeding period of twelve months, or at the first

convenient date within three months from the end of the period of

twelve months, or within a longer term as the Registrar may allow,

and shall lay before the meetings an account of his acts and

dealings and of the conduct of the winding up during the preceding

twelve months, including a summary of receipts and expenditure.

(2) If the liquidator fails to comply with the provisions of sub-

article (1), he shall be liable to a penalty.

(3) A member or members holding not less than one tenth of

the paid up share capital having the right to vote at general

meetings of the company or a creditor or creditors representing not

less than one tenth in value of the company creditors may, at any

time, by request in writing require the liquidator to convene a

general meeting of the company, or a creditors’ meeting, as the case

may be. Such request shall be signed by such member or members,

or such creditor or creditors, as the case may be, and shall state the

objects of the meeting.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 284 Final meetings. — COMPANIES ACT Open official source

(1) As soon as the affairs of the company are fully wound

up, the liquidator shall make an account of the winding up, showing

how the winding up has been conducted and how the property of

the company has been disposed of, and shall draw up a scheme of

distribution indicating the amount due in respect of each share from

the assets of the company, where applicable, and he shall cause the

account to be audited by one or more auditors appointed by

resolution of the creditors, or in default by the court. The liquidator

shall thereupon call a general meeting of the company and a

meeting of the creditors for the purpose of laying the account and

scheme of distribution, if any, together with the auditors’ report,

before the meetings and giving any explanations thereof.

(2) Within seven days after the date of the meetings or, if the

meetings are not held on the same date, after the date of the later

meeting, the liquidator shall send to the Registrar a copy of the

account and of the scheme of distribution, if any, together with the

auditors’ report, and shall make a return to him of the holding of

the meetings and of their dates; and if the copy is not sent or the

return is not made in accordance with this sub-article the liquidator

shall be liable to a penalty, and, for every day during which the

default continues, to a further penalty

Provided that, if a quorum is not present at either such

meeting, the liquidator shall, in lieu of the return mentioned in this

sub-article, make a return that the meeting was duly summoned and

that no quorum was present thereat and upon such a return being

made the provisions of this sub-article as to the making of the

return shall, in respect of that meeting, be deemed to have been

complied with.

(3) If the liquidator fails to call a general meeting of the

company or a meeting of the creditors as required by this article, he

shall be liable to a penalty.

(4) The provisions of article 274(4) shall apply to an auditor

appointed in terms of sub-article (1).

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 285 Striking company’s name off the register. — COMPANIES ACT Open official source

(1) The Registrar shall, on receiving the account and the

scheme of distribution, if any, together with the auditors’ report

and, in respect of each such meeting as is referred to in article 284,

the return or returns as mentioned in that article, forthwith register

them, and on the expiration of three months from the publication of

the notice referred to in article 401(1)(e), the Registrar shall strike

the name of the company off the register

Provided that the court may, on an application filed within

the said period of three months by the liquidator or by any other

person who appears to the court to have an interest, make an order

deferring the date at which the name of the company shall be struck

off the register for such time and subject to such conditions as the

court may provide.

(2) When an order by the court is made under the proviso to

sub-article (1), the Registrar of Courts shall forthwith forward a

copy of it to the Registrar for registration and the Registrar shall

defer applying the provisions of sub-article (1) in accordance with

the order given by the court referred to in that sub-article.

Chapter IV - Provisions applicable to every voluntary

winding up

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 286 Provisions applicable to every voluntary winding up. — COMPANIES ACT Open official source

The provisions contained in articles 287 to 294 shall apply

to every voluntary winding up, whether a members’ or a creditors’

voluntary winding up.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 287 Distribution of property of company. — COMPANIES ACT Open official source

Subject to the provisions of this Act and of any other law

as to preferential debts or payments, the property of a company

shall, on its winding up, be applied in satisfaction of its liabilities

pari passu, and, subject to such application, shall, unless the

articles otherwise provide, be distributed among the members

according to their rights and interests in the company.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 288 Powers and duties of liquidator. — COMPANIES ACT Open official source

(1) The liquidator may -

(a) in the case of a members’ voluntary winding up, with

the sanction of an extraordinary resolution of the

company, and, in the case of a creditors’ voluntary

winding up, with the sanction of the court or of the

liquidation committee or, if there is no such

committee, of a meeting of the creditors, exercise any

of the powers given by article 238(1)(c), (d) and (e) to

a liquidator in a winding up by the court;

(b) without sanction, exercise any of the other powers

given by this Act to a liquidator in a winding up by the

court;

(c) exercise the power of the court under this Act of

drawing up a list of contributories, which list shall be

prima facie evidence of the liability of the persons

named therein to be contributories;

(d) exercise the power of the court of making calls;

(e) summon general meetings of the company for the

purpose of obtaining the sanction of the company by

extraordinary resolution or for any other purpose he

may think fit.

(2) The liquidator shall pay the debts of the company and shall

adjust the rights of the contributories among themselves.

(3) More than one person may be appointed to exercise the

fu nct ion o f li qu ida tor of a com pan y. Whe re mo re th an on e

liquidator is appointed, any power given by this Act may be

exercised by one or more of them as may be determined at the time

of their appointment, or in default of such determination, by any

two of them acting jointly.

(4) Subject to the provisions of article 305, the acts of a

liquidator shall be valid notwithstanding any defects that may

afterwards be discovered in his appointment.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 289 Powers of the court to remove liquidators. — COMPANIES ACT Open official source

(1) The court may, on the application of any member,

creditor or contributory, remove a liquidator if it is satisfied that

there exist sufficient grounds to warrant his removal and appoint

another liquidator.

(2) A vacancy resulting from the death or resignation of a

liquidator appointed by the Court may, on the application of any

member, creditor or contributory, be filled by the Court.

(3) The person who applied to the Court in terms of sub-article

(2) shall, in the case of a vacancy resulting from the death of a

liquidator, inform the Registrar of the demise of the liquidator.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 290 Notice by liquidator of his appointment. — COMPANIES ACT Open official source

(1) The liquidator shall, within fourteen days after his

appointment, deliver to the Registrar for registration a notice of his

appointment stating his name and residence.

(2) If the liquidator fails to comply with the requirements of

this article he shall be liable to a penalty, and, for every day during

which the default continues, to a further penalty.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 291 When arrangement is binding on members. — COMPANIES ACT Open official source

(1) Any arrangement entered into between a company in

the course of being wound up, and its creditors shall, subject to the

right of appeal under this article, be binding on the company if

sanctioned by an extraordinary resolution, and on the creditors if

acceded to by two-thirds in value.

(2) Any creditor or contributory may, within fourteen days

from the completion of the arrangement, apply to the court

contesting the arrangement, and the court may thereupon, as it

thinks fit, amend, vary or confirm the arrangement.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 292 Court may determine questions and exercise powers. — COMPANIES ACT Open official source

(1) The liquidator or any member, contributory or

creditor may apply to the court to determine any question arising in

the course of winding up of a company, or to exercise, as respects

the enforcement of calls or any other matter, all or any of the

powers which the court might exercise if the company were being

wound up by the court.

(2) The liquidator may apply to the Court to fix a time or times

within which creditors are to prove their debts or claims or to be

excluded from the benefit of any distribution made before those

debts are proved.

(3) The court, if satisfied that the determination of the question

or the required exercise of power referred to in sub-articles (1) and

(2) will be just and beneficial, may accede wholly or partially to the

application on such terms and conditions as it thinks fit or may

make such other order on the application as it so determines.

(4) A copy of any order made by virtue of this article staying

the proceedings in the winding up shall forthwith be forwarded by

the Registrar of Courts to the Registrar who shall make a minute of

the order in the register relating to the company.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 293 Costs of voluntary winding up. — COMPANIES ACT Open official source

All costs, charges and expenses properly incurred in the

winding up, including the remuneration of the liquidator, shall be

payable out of the assets of the company in priority to all other

claims, and they shall, in so far as applicable, be paid in the order

of priority established under article 258, unless the court otherwise

directs.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 294 Savings for rights of creditors and contributories. — COMPANIES ACT Open official source

The voluntary winding up of a company shall not bar the

right of any creditor or contributory to have it wound up by the

court, but in the case of an application by a contributory the court

must be satisfied that the rights of the contributories will be

prejudiced by a voluntary winding up, and the provisions of article

223(2) shall apply.

SUB-TITLE III - PROVISIONS APPLICABLE TO EVERY

MODE OF WINDING UP

Chapter I - Effect of appointment of liquidator and convening

of meetings

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 295 Powers of directors and company secretary to cease. — COMPANIES ACT Open official source

On the appointment of a liquidator, all the powers of the

directors and of the company secretary shall cease, except as may

be otherwise provided in this Title.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 296 Summoning of meetings. — COMPANIES ACT Open official source

(1) The liquidator, including the official receiver while

occupying the office of liquidator, shall summon all meetings of

creditors or contributories by giving not less than fourteen days’

notice thereof in a daily newspaper circulating wholly or mainly in

Malta; and shall, not less than fourteen days before the day

appointed for the meeting, send by post to every person appearing

in the company’s accounting records to be a creditor of the

company, notice of the meeting of creditors, and, to every person

appearing in the company’s accounting records or otherwise to be a

c o n t r i b u t o r y o f t h e c o m p a n y, n o t i c e o f t h e m e e t i n g o f

contributories.

(2) The notice to each creditor shall be sent to the address

given in the creditors’ proof of his debt, or, if he has not proved his

debt, to the address given in the statement of affairs of the

company, if any, or to such other address as may be known to the

person summoning the meeting.

(3) Where there is no continuing liquidator, any member,

creditor or contributory may apply to the court for directions as to

the summoning and holding of a meeting.

(4) The provisions of this article shall not apply to meetings

held under article 278 or article 284.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 297 Proof of notice and chairman of meeting. — COMPANIES ACT Open official source

(1) A certificate by the official receiver, or an affidavit by

the liquidator or creditor, or as the case may be by some officer of

the company, that the notice of any meeting has been duly posted,

shall be sufficient evidence of such notice having been duly sent to

the person to whom the same was addressed.

(2) The involuntary omission of any notice required to be given

by article 296 or any other provision of this Title shall not

invalidate the meeting.

(3) Where a meeting is summoned by the official receiver or

the liquidator, he or someone nominated by him shall be chairman

of the meeting.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 298 Resolutions of creditors and contributories. — COMPANIES ACT Open official source

(1) (a) At a meeting of creditors a resolution shall be

deemed to be passed when a majority in value of the

creditors present personally or by proxy and voting on

the resolution have voted in favour of the resolution.

(b) At a meeting of contributories a resolution shall be

deemed to be passed when three-fourths in value of the

contributories present in person or by proxy and voting

on the resolution, or a majority in value of all the

contributories, have voted in favour of the resolution.

The value of the contributories shall be determined

according to the number of votes conferred on each

contributory by the memorandum or articles of the

company or, if the memorandum and articles are silent,

according to the value of their respective liabilities to

contribute.

(2) The provisions of this Act and of the memorandum or

articles of the company with respect to proxies at general meetings

of the company shall apply to proxies at meetings of creditors and

contributories, with such modifications and adaptations as may be

required.

(3) A copy of every resolution of a meeting of creditors or

contributories in a winding up by the court shall be certified by the

official receiver or the liquidator, as the case may be, and filed in

the Registry of the Superior Courts.

(4) Where a resolution is passed at an adjourned meeting of any

creditors or contributories of a company, the resolution shall, for all

purposes, be treated as having been passed on the date on which it

was in fact passed, and shall not be deemed to have been passed at

any earlier date.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 299 Other proceedings at meetings. — COMPANIES ACT Open official source

(1) A meeting of creditors or contributories may act

provided there is a quorum present consisting of

(a) in the case of a creditors’ meeting, at least three

creditors or all the creditors where these number less

than three; and

(b) in the case of a meeting of contributories, at least three

contributories, or all the contributories where these

number less than three.

(2) If within half an hour from the time appointed for the

meeting, a quorum of creditors or contributories, as the case may

be, is not present or represented, the meeting shall be adjourned to

the same day in the following week at the same time and place or to

such other day or time or place as the chairman may appoint, but so

that the day appointed shall be not less than seven and not more

than twenty-one days from the day from which the meeting was

adjourned, and at such adjourned meeting the number present or

represented shall form a quorum and may act for any purpose.

(3) The chairman may, with the consent of the meeting, adjourn

it from time to time and from place to place, but the adjourned

meeting shall be held at the same place as the original meeting

unless in the resolution for adjournment another place is specified

or unless the court otherwise orders.

(4) The chairman shall cause minutes of the proceedings of

meetings to be drawn up and properly entered in a book kept for

that purpose and the minutes shall be signed by him.

(5) A list of creditors and contributories present at every

meeting shall be made and kept in such form as the chairman may

deem appropriate or as may be prescribed.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 300 Notice of resignation or removal of liquidator. — COMPANIES ACT Open official source

(1) Upon the resignation of a liquidator from his office,

he shall deliver to the Registrar for registration a notice of his

resignation and the resignation shall only become effective on such

registration.

(2) Where a liquidator is removed from office by the court in

accordance with the provisions of this Title, the Registrar of Courts

shall forthwith deliver a notice of such removal to the Registrar for

registration.

(3) Where a liquidator has been removed by an extraordinary

resolution of the company in a members’ voluntary winding up, a

notice thereof shall be delivered to the Registrar for registration by

any member of the company who has duly been authorised by the

same resolution or by the company in general meeting.

(4) Where a liquidator has been removed by a resolution of the

creditors in terms of article 298, in a creditors’ voluntary winding

up , a n ot ic e t h e r e of shal l b e de l i ve r e d t o t he R e gi s t ra r f or

registration by any creditor of the company who has been duly

authorised by the same resolution or by the creditors’ meeting.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 300A Rectification of scheme of distribution. — COMPANIES ACT Open official source

(1) Where in the course of the winding up of a company

the liquidator has not taken into account any asset of the company,

and the name of the company has been struck off the register, any

interested person may, by an application, request the Court to order

the rectification of the scheme of distribution, and the Court may,

where it considers it appropriate, order such rectification under

those terms and conditions it may deem fit.

(2) Where a company has made a distribution to its

shareholders pursuant to a scheme of distribution and the name of

such company has been struck off the register, any creditor whose

claim against the company has not been satisfied may, by an

application, claim what is due to him from the shareholders of the

company pro rata to the amount received by the shareholders upon

t h e d i s t r i b u t i o n , a n d t h e C o u r t m a y, w h e r e i t c o n s i d e r s i t

appropriate, order that payments be made by the shareholders to

such creditor under those terms and conditions it may deem fit

Provided that in no case shall a shareholder be required to

contribute an am ount exceeding that received by him upon

distribution.

(3) No application may be made under this article after the

expiration of five years from the date on which the name of the

company has been struck off the register.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 300B Restoration of company name on register. — COMPANIES ACT Open official source

(1) Where a company has been struck off the register, any

interested person may, by an application, request the Court to order

that the name of the company be restored to the register and the

winding up be reopened.

(2) Where, on an application made in terms of sub-article (1),

the Court is satisfied that the winding up and striking off of the

company has been vitiated by fraud or illegality of a material

nature, the Court may order that the name of the company be

restored to the register and the winding up be reopened for such

purposes and such period as the Court shall specify in its decision,

and the Court shall give such directives and impose such conditions

as it may consider appropriate.

(3) The Court shall only accede to the application where it is

satisfied that this is the only remedy available.

(4) In its decision the Court shall also determine whether its

orders and directives shall be effective in favour of all persons or

shall apply limitedly to specified persons indicated in the decision.

(5) No application may be made under this article after the

expiration of five years from the date on which the name of the

company has been struck off the register.

Chapter II - Proof and ranking of claims

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 301 Debts of all descriptions may be proved. — COMPANIES ACT Open official source

In every winding up of a company the assets of which are

sufficient to meet the liabilities, all debts payable on a contingency,

and all claims against the company, present or future, certain or

contingent, ascertained or which may be due in damages, shall be

admissible as proof against the company, a just estimate being

made, so far as possible, of the value of such debts or claims as

may be subject to any contingency or which are due in damages but

not ascertained, or which for some other reason do not bear a

certain value.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 302 Application of rules on ranking. — COMPANIES ACT Open official source

In the winding up of a company the assets of which are

insufficient to meet the liabilities, the rights of secured and

unsecured creditors and the priority and ranking of their debts shall

be regulated by the law for the time being in force.

Chapter III - Effects of winding up on antecedent transactions

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 303 Fraudulent preference. — COMPANIES ACT Open official source

(1) Every privilege, hypothec or other charge, or transfer

or other disposal of property or rights, and any payment, execution

or other act relating to property or rights made or done by or

against a company, and any obligation incurred by the company

within six months before the dissolution of the company shall be

deemed to be a fraudulent preference against its creditors whether

it is of a gratuitous nature or an onerous nature if it constitutes a

transaction at an undervalue or if a preference is given, unless the

person in whose favour it is made, done or incurred, proves that he

did not know and did not have reason to believe that the company

was likely to be dissolved by reason of insolvency, and in the event

of the company being so dissolved every such fraudulent

preference shall be void.

(2)

For the purposes of this article -

(a) a company enters into a transaction at an undervalue

if

(i)

the company makes a gift or otherwise enters

into a transaction on terms that provide for the

company to receive no consideration, or

(ii) the company enters into a transaction for a

consideration the value of which, in money or

money’s worth, is significantly less than the

value in money or money’s worth of the

consideration provided by the company;

(b) a company gives a preference to a person if

(i)

that person is one of the company’s creditors or

a surety or guarantor for any of the company’s

debts or other liabilities; and

(ii) the company does anything or suffers anything

to be done which, in either case, has the effect of

putting that person into a position which, in the

event of the company going into insolvent

winding up, will be better than the position he

would have been had that act or omission not

occurred.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 304 Liabilities and rights with respect to fraudulent preferences. — COMPANIES ACT Open official source

(1) Where anything made or done after the appointed day

is void under article 303 as a fraudulent preference of a person

interested in property privileged, hypothecated or otherwise

charged to secure the company’s debt, then, without prejudice to

any rights or liabilities arising apart from the provisions of this

article, the person preferred shall be subject to the same liabilities

and shall have the same rights as if he had undertaken to be

personally liable as surety for the debt to the extent of the charge

on the property or the value of his interest, whichever is the less.

(2) The value of the preferred person’s interest shall be

determined as at the date of the transaction constituting the

fraudulent preference, and shall be determined as if the interest

were free of all encumbrances or burdens other than those to which

the charge for the company’s debt referred to in sub-article (1) was

then subject.

(3) On any application made to the court with respect to any

payment on the ground that the payment was a fraudulent

preference of a surety or guarantor, the court may determine any

questions with respect to the payment arising between the person to

whom the payment was made and the surety or guarantor and to

grant relief in respect thereto.

(4) The provisions of sub-article (3) shall apply, with the

necessary modifications, in relation to transactions other than

payments of money, as they apply in relation to such payments.

Chapter IV - Qualification of Liquidators and Prohibition of

Certain Transfers by Liquidators

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 305 Qualification of liquidators. — COMPANIES ACT Open official source

(1) A person shall not be qualified to act as liquidator

unless he is an advocate or is an individual who is a certified public

accountant, or is registered with the Registrar as fit and proper to

exercise the function of liquidator.

(2)

A person who is qualified to act as liquidator in virtue of

sub-article (1), may not act as liquidator if he has held the office of

director or company secretary or has held any other appointment

with or in connection with that company, at any time during the

four years prior to the date of dissolution of the company as

determined in accordance with the provisions of this Act.

For the purposes of this sub-article, director includes a

person in accordance with whose directions or instructions the

directors of the company are or have been accustomed to act.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 306 Prohibition of certain transfers by liquidators. — COMPANIES ACT Open official source

(1) A liquidator shall be prohibited from transferring or

disposing of any assets of a company, directly or indirectly, in

favour of -

(a) the liquidator himself, his partners or employees, or to

the spouse of the liquidator, or to any other person

related to him by consanguinity or affinity in the direct

line, or, up to the third degree, in the collateral line; or

(b) a commercial partnership, other than a company, of

which he is a partner; or

(c) a company of which he is a director, or of which he

holds more than half in nominal value of its issued

share capital, or in which he is entitled to more than

half its voting power, or to a subsidiary or parent

company thereof.

(2) A person who acts in contravention of any of the provisions

of sub-article (1) or of article 305 shall be guilty of an offence and

liable on conviction to a fine (multa) of not more than eleven thousand

and six hundred and forty-six euro (€11,646).

Chapter V - Offences antecedent to dissolution or in course of

winding up

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 307 Fraud in anticipation of dissolution. — COMPANIES ACT Open official source

(1) When a company has been dissolved in accordance

with the provisions of article 214, any person, being a past or

present officer of the company, shall be guilty of an offence if,

within the twelve months immediately preceding the deemed date

of dissolution, he has -

(a) concealed any part of the company’s property, or

concealed any debt due to or from the company; or

(b) fraudulently removed any part of the company’s

property; or

(c) concealed, destroyed, mutilated or falsified any book

or paper affecting or relating to the company’s

property or affairs; or

(d) made any false entry in any book or paper affecting or

relating to the company’s property or affairs; or

(e) fraudulently parted with, or altered any document

affecting or relating to the company’s property or

affairs; or

(f)

pledged or disposed of any property of the company

which has been obtained on credit and has not been

paid for, unless the pledging or disposal was in the

ordinary course of the company’s business; or

(g) by any false representation or other fraud, obtained

property for or on behalf of the company on credit

which the company does not subsequently pay for; or

(h) exercised any false representation or fraud for the

purpose of obtaining the consent of the creditors of the

company or of any of them to an agreement with

reference to the affairs of the company or to its

dissolution.

(2) Such person shall be guilty of an offence if within the

period mentioned in sub-article (1) he has been a party to the doing

by others of any of the things mentioned in paragraphs (c), (d) and

(e) thereof, and he shall be guilty of an offence if, at any time after

the deemed date of dissolution, he does any of the things mentioned

in paragraphs (a) to (h) of the said sub-article, or is party to the

doing by others of any of the things mentioned in paragraphs (c) to

(e) of that sub-article.

(3) It shall be a defence for a person charged to prove that he

had no intent to defraud or to conceal the affairs of the company or

to defeat the law.

(4) Where a person pledges or otherwise disposes of any

property in circumstances which amount to an offence under sub-

article (1)(f), every person who receives the property on pledge or

otherwise receives the property knowing it to be pledged or

disposed of in such circumstances, shall be guilty of an offence.

(5) For the purposes of this article, the expression "officer"

shall include any person in accordance with whose directions or

instructions the directors of a company have been accustomed to

act.

(6) A person guilty of an offence under this article shall be

liable on conviction to a fine (multa) of not more than two hundred and

thirty-two thousand and nine hundred and thirty-seven euro

(€232,937), or to imprisonment for a term not exceeding five years, or

to both such fine (multa) and imprisonment.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 308 Fraud by officers of companies being wound up. — COMPANIES ACT Open official source

(1) When a company is being wound up by the court or

voluntarily, a person shall be guilty of an offence if, being an

officer of the company, he -

(a) has made or caused to be made any gift or transfer of,

or charge on, or has caused or connived at the

enforcement of any executive title against, the

property of the company; or

(b) has concealed or removed any part of the property of

the company since, or within two months before, the

date of any unsatisfied judgment or order for payment

of money against the company.

(2)

A person shall not be guilty of an offence under sub-article

(1) if he proves that, at the time of the conduct constituting the

offence, he had no intent to defraud the company’s creditors.

(3) A person guilty of an offence under this article shall be

liable on conviction to a fine (multa) of not more than two hundred and

thirty-two thousand and nine hundred and thirty-seven euro

(€232,937), or imprisonment for a term not exceeding five years, or to

both such fine (multa) and imprisonment.

(4) For the purposes of this article, the expression "officer"

shall include any person in accordance with whose directions or

instructions the directors of a company have been accustomed to

act.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 309 Other offences by officers of companies being wound up. — COMPANIES ACT Open official source

(1) If any person, being a past or present officer of a

company -

(a) does not to the best of his knowledge and belief fully

and truly reveal to the liquidator all the property,

movable and immovable, corporeal or incorporeal, of

the company, and how and to whom and for what

consideration and when the company disposed of any

part thereof, except such part as has been disposed of

in the ordinary course of the business of the company;

or

(b) does not deliver up to the liquidator, or as the

liquidator directs, all or such part of the property of the

company as is in his custody or under his control, and

which he is required by law to deliver up; or

(c) does not deliver up to the liquidator, or as the

liquidator directs, all accounts, accounting records and

documents in his custody or under his control

belonging to the company and which he is required by

law to deliver up; or

(d) makes any material omission in any statement relating

to the affairs of the company; or

(e) knowing or believing that a false debt has been proved

by any person in the winding up, fails for the period of

one month to inform the liquidator thereof; or

(f)

after the dissolution of the company prevents the

production of any book or paper affecting or relating

to the property or affairs of the company; or

(g) after the dissolution of the company or at any meeting

of the creditors of the company within twelve months

immediately preceding the dissolution of the company

attempts to account for any part of the property of the

company by fictitious losses or expenses,

he shall be guilty of an offence and liable on conviction to a fine

(multa) of not more than two hundred and thirty-two thousand and

nine hundred and thirty-seven euro (€232,937), or to imprisonment for

a term not exceeding five years, or to both such fine (multa) and

imprisonment if, at the time of the commission of the alleged

offence, the company is being wound up, whether by the court or

voluntarily, or if, subsequent to the commission of the alleged

offence, the company is dissolved in accordance with the

provisions of article 214.

(2) For the purposes of this article, the expression "officer"

shall include any person in accordance with whose directions or

instructions the directors of a company have been accustomed to

act.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 310 Defence to a charge under article 309. — COMPANIES ACT Open official source

It shall be a good defence to a charge under any of

paragraphs (a), (b), (c) and (d) of article 309(1), if the accused

proves that he had no intent to defraud; and to a charge under

paragraph (f) of the said article, if he proves that he had no intent to

conceal the state of affairs of the company or to defeat the law.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 311 Fraud by contributory. — COMPANIES ACT Open official source

If any contributory of any company being wound up

destroys, mutilates, alters or falsifies any accounts, accounting

records, documents, books or securities, or makes or is party to the

making of any false or fraudulent entry in any register, accounting

record or document belonging to the company with intent to

defraud or deceive any person, he shall be guilty of an offence and

shall be liable on conviction to a fine (multa) of not more than two

hundred and thirty-two thousand and nine hundred and thirty-seven

euro (€232,937), or to imprisonment for a term not exceeding five

years, or to both such fine (multa) and imprisonment.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 312 Remedy against delinquent directors, liquidators, etc. — COMPANIES ACT Open official source

(1) The provisions of this article shall apply if in the

course of the winding up of a company, whether by the court or

voluntarily, it appears that a person who -

(a) is or has been an officer of the company;

(b) has acted as liquidator of the company; or

(c) not being a person falling within paragraphs (a) and

(b), is or has been concerned, or has taken part in the

promotion, formation or management of the company,

has misapplied or retained or become accountable for, any money

or other property of the company, or been guilty of any improper

performance or breach of duty in relation to the company.

(2) The court may, on the application of the official receiver or

the liquidator, or of any creditor or contributory, examine the

conduct of any person referred to in sub-article (1) and may compel

him -

(a) to repay, restore or account for the money or property

or any part of it, with interest at such rate as the court

thinks fit; or

(b) to contribute such sum to the company’s assets by way

of compensation in respect of the improper

performance or breach of duty as the court thinks fit.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 313 Fraud by officers of companies subsequently dissolved. — COMPANIES ACT Open official source

(1) If any person, being at the time of the commission of

the alleged offence, an officer of a company which is subsequently

dissolved in accordance with the provisions of article 214, has -

(a) by false pretences or by means of any other fraud

induced any person to give credit to the company; or

(b) with intent to defraud creditors of the company, made

or caused to be made any gift or transfer of or charge

on, or has caused or connived at the enforcement of

any executive title against, the property of the

company; or

(c) with intent to defraud creditors of the company,

concealed or removed any part of the property of the

company since, or within two months before, the date

of any unsatisfied judgment or order for payment of

money obtained against the company,

he shall be guilty of an offence and liable on conviction to a fine

(multa) of not more than two hundred and thirty-two thousand and

nine hundred and thirty-seven euro (€232,937), or imprisonment for a

term not exceeding five years, or to both such fine (multa) and

imprisonment.

(2) A person shall not be guilty of an offence under sub-article

(1) by reason of conduct constituting an offence under paragraph

(b) of the said sub-article which occurred more than five years

before the date of deemed dissolution.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 314 Liability when proper accounting records are not kept by insolvent company. — COMPANIES ACT Open official source

If, where a company is dissolved, it is shown that proper

accounting records were not kept by the company throughout the

period of two years immediately preceding the dissolution or the

period between the registration of the company and the dissolution,

whichever is the shorter, and it is furthermore shown that the

company was, at the moment of its dissolution, unable to pay its

debts, every officer of the company who is in default shall, unless

he shows that he acted diligently and that in the circumstances in

which the business of the company was carried on the default was

excusable, be guilty of an offence and liable on conviction to a fine

(multa) of not more than forty-six thousand and five hundred and

eighty-seven euro (€46,587), or imprisonment for a term not exceeding

three years, or to both such fine (multa) and imprisonment.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 315 Responsibility for fraudulent trading. — COMPANIES ACT Open official source

(1) If in the course of the winding up of a company,

whether by the court or voluntarily, it appears that any business of

the company has been carried on with intent to defraud creditors of

the company or creditors of any other person or for any fraudulent

purpose, the court on the application of the official receiver, or the

liquidator or any creditor or contributory of the company, may, if it

t h i n k s p r o p e r s o t o d o , d e c la r e t h a t a n y p e r s o n s w h o w e r e

knowingly parties to the carrying on of the business in the manner

aforesaid be personally responsible, without any limitation of

liability for all or any of the debts or other liabilities of the

company as the court may direct.

(2) Where the business of a company is carried on with such

intent or for such purposes as is mentioned in sub-article (1), every

person who was knowingly a party in the carrying on of the

business in the manner aforesaid, shall be guilty of an offence and

liable on conviction to a fine (multa) of not more than two hundred and

thirty-two thousand and nine hundred and thirty-seven euro

(€232,937), or imprisonment for a term not exceeding five years, or to

both such fine (multa) and imprisonment.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 316 Wrongful trading. — COMPANIES ACT Open official source

(1) The provisions of this article shall apply where a

company has been dissolved and is insolvent and it appears that a

person who was a director of the company knew, or ought to have

known prior to the dissolution of the company that there was no

reasonable prospect that the company would avoid being dissolved

due to its insolvency.

(2) The court, on the application of the liquidator of a company

to which this article applies, may declare the person who was a

director referred to in sub-article (1) liable to make a payment

towards the company’s assets as the court thinks fit.

(3) The court shall not grant an application under this article if

it is satisfied that the person who was a director knew that there

was no reasonable prospect that the company would avoid being

dissolved due to its insolvency and accordingly took every step he

ought to have taken with a view to minimising the potential loss to

the company’s creditors.

(4) For the purposes of sub-articles (2) and (3), the facts which

a director of a company ought to know or ascertain, the conclusions

which he ought to reach and the steps which he ought to take, are

those which would be known or ascertained, or reached or taken, by

a reasonably diligent person having both -

(a) the knowledge, skill and experience that may

reasonably be expected of a person carrying out the

same functions as are carried out by or entrusted to

that director in relation to the company; and

(b) the knowledge, skill and experience that the director

has.

(5) For the purposes of this article, "director" includes a person

in accordance with whose directions or instructions the directors of

the company are accustomed to act.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 317 Restriction on reuse of company names. — COMPANIES ACT Open official source

(1) The provisions of this article shall apply to a person

who, on or after the appointed day, was a director of a company

("the company being wound up") at any time in the twelve months

preceding its dissolution and the company is insolvent upon such

dissolution.

(2) Except with leave of the court, or in such circumstances as

may be prescribed, any person referred to in sub-article (1) shall

not at any time during the winding up of the company and up to two

years from the date when its name is struck off the register -

(a) be a director of a company that is known by a name

which is prohibited by virtue of the provisions of sub-

article (3): or

(b) in any way, whether directly or indirectly, be

concerned or take part in the promotion, formation or

management of any such company; or

(c) in any way, whether directly or indirectly, be

concerned or take part in the carrying on of a business

carried on under such a prohibited name.

(3) For the purposes of sub-article (2), a name is a prohibited

name in relation to any person referred to in sub-article (1) if -

(a) it is a name by which the company being wound up

was known at any time in that period of twelve

months; or

(b) it is a name which is so similar to a name falling

within paragraph (a) as to suggest an association with

that company.

(4) A person who acts in contravention of the provisions of this

article shall be guilty of an offence and liable on conviction to a fine

(multa) of not more than eleven thousand and six hundred and forty-

six euro (€11,646). Such person shall also be personally responsible

for the debts of any company referred to in sub-article (2)(a) and (b)

which are incurred while he acts in relation to the company in the

manner described in those paragraphs.

(5) For the purposes of this article, "director" includes a person

in accordance with whose directions or instructions the directors of

the company are accustomed to act.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 318 Reference by court for prosecution of delinquent officers, etc. — COMPANIES ACT Open official source

If it appears to the court in the course of a winding up by

the court that any past or present officers, or any member of the

company, or any other person, has been guilty of any offence in

relation to the company which is an offence under this Act or for

which he is otherwise criminally liable, the court shall, either on

the application of any person interested in the winding up or of its

own motion, refer the matter to the Commissioner of Police

through the Registrar of Courts.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 319 Report by liquidator for prosecution of delinquent officers, etc. — COMPANIES ACT Open official source

If it appears to the liquidator in the course of a voluntary

winding up that any past or present officer, or any member, of the

company has been guilty of an offence in relation to the company

which is an offence under this Act or for which he is otherwise

criminally liable, he shall forthwith report the matter to the

Commissioner of Police.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 320 Disqualification orders. — COMPANIES ACT Open official source

(1) The court, upon the application of the Attorney General,

the Official Receiver or the Registrar, may make a disqualification

order against any person who is found guilty of an offence under

this Act, other than an offence punishable only with a fine, or who

has infringed any requirement of this Act with the consequence that

the person becomes liable to contribute to the assets of a company

or becomes personally liable for the debts of the company.

(2) The court, upon the application of the Attorney General, the

Official Receiver or the Registrar, may also make a disqualification

order against any person if it is satisfied -

(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

(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.

(3) A disqualification order made under this article may be for

a minimum period of one year and a maximum period of fifteen

years.

(4) For the purposes of this article, a disqualification order is

an order whereby a person shall not, without leave of the court, be -

(a) a director or company secretary of a company; or

(b) a liquidator or provisional administrator of a company;

or

(c) a special manager of the estate or business of a

company; or

(d) concerned in any way, whether directly or indirectly,

or take part in the promotion, formation or

management of a company,

for a specified period beginning with the date of the order.

(5) A notice of a disqualification order made under this article

shall -

(a) be delivered by the Registrar of Courts to the Registrar

for registration;

(b) be furthermore recorded in a register to be kept for this

purpose by the Registrar and which shall be open for

public inspection.

(6) Any person who, while being subject to a disqualification

order, acts in contravention thereof, shall be guilty of an offence

and liable on conviction to a fine (multa) of not more than forty-six

thousand and five hundred and eighty-seven euro (€46,587), or

imprisonment for a term not exceeding three years, or to both such fine

(multa) and imprisonment.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 321 Other remedies. — COMPANIES ACT Open official source

The provisions of this Chapter shall be without prejudice

to any other offences or remedies which may exist under any other

law.

Chapter VI - Supplementary Provisions

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 322 Statement by liquidator in respect of pending winding up. — COMPANIES ACT Open official source

(1) If, where a company is being wound up, whether by

the court or voluntarily, the winding up is not concluded within

twelve months after the dissolution of the company, the liquidator,

not being the official receiver, shall, within thirty days from the

expiry of the said period of twelve months, and subsequently at

intervals of six months, send to the Registrar for registration a

statement with respect to the proceedings in and position of the

winding up commencing on the date when the liquidator was first

appointed and drawn to the end of the period in respect of which

the statement is due, and made in such form and containing such

particulars as may be prescribed. In a winding up by the court,

where the assets of the company have been fully realised and

distributed before the expiration of a six-monthly interval, a final

statement shall be sent to the Registrar for registration.

(2) If a liquidator fails to comply with the provisions of this

article, he shall be liable to a penalty and, for every day during

which the default continues, to a further penalty.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 323 Supplementary powers of the court. — COMPANIES ACT Open official source

(1) The court may, with respect to all matters relating to

the dissolution and winding up of a company, have regard to the

wishes of the creditors or contributories of the company, as proved

to it by any sufficient evidence, and may, if it thinks fit, for the

purpose of ascertaining those wishes direct that meetings of the

creditors or contributories be called, held and conducted in such

manner as the court considers appropriate and may appoint a person

to act as chairman of any such meeting and to report the result

thereof to the court.

(2) In the case of creditors, regard shall be had to the value of

each creditors’ debt; and in the case of contributories, regard shall

be had to the number of votes conferred on each contributory by the

memorandum or articles of the company or, if the memorandum

and articles are silent, to the value of their respective liabilities to

contribute.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 324 Publication of striking off and disposal of accounting records of company. — COMPANIES ACT Open official source

(1) Where the name of a company is struck off the

register, the Registrar shall forthwith proceed to publish a notice

thereof in the Gazette or on a website maintained by the Registrar.

(2) The liquidator shall keep the accounts, accounting records

and documents of the company for a period of ten years from the

date of publication of the striking of the company’s name off the

register.

(3) If the liquidator fails to comply with sub-article (2) he shall

be liable to a penalty.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 325 Defunct companies. — COMPANIES ACT Open official source

(1) Where the Registrar has reasonable cause to believe

that a company is not carrying on business or is not in operation, he

may send to the company by post a letter inquiring whether the

company is carrying on business or is in operation.

(2) If the Registrar receives an answer to the effect that the

company is not carrying on business or is not in operation, or does

not within one month of sending the letter receive an answer

thereto, he may send to the company by post and publish a notice in

the Gazette or on a website maintained by the Registrar and in a

daily newspaper circulating wholly or mainly in Malta that, at the

expiration of three months from the date of the last publication of

th e s a i d n ot i c e , th e c om p a n y ’s na m e sh a l l , u n l e s s c a u s e i s

previously shown to the contrary or the Registrar is satisfied that

there are sufficient grounds not to proceed with the striking off, be

struck off the register; and the assets of the company shall devolve

upon the Government of Malta.

(3) If, in any case where a company is being wound up

voluntarily, the Registrar has reasonable cause to believe either that

no liquidator is acting or that the affairs of the company are fully

wound up, and the returns required to be made by the liquidator in

terms of article 322 are overdue by six months or more, the

Registrar may publish in the Gazette or on a website maintained by

the Registrar and in a daily newspaper circulating wholly or mainly

in Malta, a notice that at the expiration of three months from the

date of the last publication of the said notice, the winding up of the

company shall, unless cause is previously shown to the contrary, be

deemed to be concluded and consequently that the company’s name

be struck off the register. The Registrar shall also cause a copy of

the said notice to be sent by post to the company and to the

liquidator, if any. At the expiration of the aforesaid period of three

months the winding up of the company shall, unless cause is

previously shown to the contrary, be deemed to be concluded and

the Registrar shall strike the name of the company off the register

and the company’s assets shall devolve upon the Government of

Malta.

(4) If any member or creditor of the company, or any other

person who appears to the Court to have an interest feels aggrieved

by the fact that the name of the company has been struck off the

register by virtue of this article, the Court on an application made

by th e m e m be r o r c r e d it o r o r su c h o t h e r p e rs on be f or e t h e

expiration of five years from the publication of the notice of the

striking off provided for in sub-articles (2) and (3) may, if satisfied

that it is proper that the name of the company be restored to the

register, order that such name be restored to the register, and upon

an official copy of the order being delivered by the Registrar of the

Courts to the Registrar for registration, the company shall be

deemed to have continued in existence as if its name had not been

struck off; and the Court may by its order give such directions and

make such provisions as seem fit for placing the company and all

other persons in the same position as nearly as may be as if the

name of the company had not been struck off. The Registrar shall

forthwith proceed to publish a notice in the Gazette or on a website

maintained by the Registrar and in a daily newspaper circulating

wholly or mainly in Malta that the name of the company has been

restored to the register

Provided that in the event that a company’s name is restored

on the register in accordance with this sub-article, and the Court by

its decree, would have directed that the name of the company be

restored on the register for a definite period and such definite

period would be nearing expiration, and the member or creditor of

the company, or any other person who appears before the Court and

informing it that is has an interest, would still have such an interest

due to ongoing proceedings, the said person may, jointly with the

Registrar submit an application to the Court asking for an extension

of the time period for which the company’s name is to remain

restored to the register

Provided further that the said joint application before the

Court is to be accompanied, on pain of nullity, with documentary

evidence, including the pending court case reference number of the

ongoing proceedings.

(5) A notice to be sent under this article to a liquidator may be

addressed to the liquidator at his last known place of business or

address, and a letter or notice to be sent under this article to a

company may be addressed to the company at its registered office.

(6) Notwithstanding that the name of the company has been

struck off the register in terms of the preceding provisions of this

article, the liability, if any, of every director or other officer of the

company and of every member of the company shall continue and

may be enforced as if the name of the company had not been struck

off the register.

(7) Notwithstanding the provisions of article 429(1), the

provisions of this article shall apply to companies whose

dissolution and consequential winding up is regulated by the

Ordinance.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 326 Relationship with enactments on bankruptcy. — COMPANIES ACT Open official source

(1) Part III of the Commercial Code relating to

bankruptcy shall not apply to a company.

(2) References in other laws other than Part III of the

Commercial Code to a bankrupt shall, when the context requires, be

interpreted as including references to a company being wound up in

circumstances of insolvency under the provisions of this Title, and

references to bankrupt shall be construed accordingly.

PART VI - COMPANY RECONSTRUCTIONS

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 327 Power of company to compromise with creditors and members. — COMPANIES ACT Open official source

(1) Where a compromise or arrangement is proposed

between a company and its creditors, or any class of them, or

between the company and its members, or any class of them

(a) the court may, on the application of the company or

any creditor or member of it or, in the case of a

company being wound up, the liquidator, order a

meeting of the creditors, or of the members of the

company or class of members, as the case may be, to

be summoned in such manner as the court directs; or

(b) the company or any creditor, with the sanction of not less

than two-thirds of the creditors or class of creditors, may

seek the appointment of a mediator in terms of article 20

of the Mediation Act, and such mediation shall organise a

meeting of the creditors, or class of creditors, as the case

may be, in order for such creditors and the company to

reach a compromise or arrangement. The principles

under the Mediation Act shall apply.

(2) (a)

If a majority in number representing two-thirds in

value of the creditors or class of creditors or members or class of

members, as the case may be, present and voting either in person or

by proxy at the meeting called in terms of sub-article (1)(a), agree to

any compromise or arrangement, the compromise or arrangement,

if sanctioned by the court, shall be binding on all creditors or the

class of creditors or on the members or class of members, as the

case may be, and also on the company or, in the case of a company

in the course of being wound up, on the liquidator and

contributories of the company.

(b)

If all the creditors, as a result of the mediation process,

execute a written agreement containing a compromise or arrangement

in terms of sub-article (1)(b), such arrangement shall be binding on all

creditors, and also on the company or, in the case of a company in the

course of being wound up, on the liquidator.

(3) The court’s order, compromise or agreement reached during

mediation in terms of sub-article (2) shall have no effect until a copy

of every such order, compromise or arrangement has been delivered to

the Registrar for registration in accordance with article 329(5); and a

copy of every such order, compromise or arrangement shall be

annexed to every copy of the company’s memorandum issued after

order, compromise or arrangement has been made.

(4) If a company makes default in complying with sub-article

(3), the company and every officer thereof who is in default shall be

liable to a penalty.

(5)

For the purposes of this article and article 328 -

(a) "company" means any company which is unable to pay

its debts in terms of article 214(5) or in those

circumstances where the court is of the opinion that

there are grounds of sufficient gravity that would have

otherwise warranted the dissolution and consequent

winding up of the company in terms of article

214(2)(b)(iii); and

(b) "arrangement" includes a reorganisation of the

company’s share capital by the consolidation of shares

of different classes or by the division of shares into

shares of different classes, or by both of those

methods.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 328 Information as to compromise to be circulated. — COMPANIES ACT Open official source

(1) The provisions of this article shall apply where a

meeting of creditors or any class of creditors, or of members or any

class of members, is summoned or where a mediator is appointed in

terms of article 327.

(2) With every notice summoning the meeting which is sent to

a creditor or member there shall be sent also a statement explaining

the effect of the compromise or arrangement and in particular

stating any material interests of the directors of the company,

whether as directors or as members or as creditors of the company

or otherwise, and the effect on those interests of the compromise or

arrangement, in so far as it is different from the effect on the like

interests of other persons.

(3) In every notice summoning the meeting which is given by

advertisement there shall be included either such a statement as

abovementioned or a notification of the place at which, and the

manner in which, creditors or members entitled to attend the

meeting may obtain copies of the statement.

(4) Where the compromise or arrangement affects the rights of

debenture holders of the company, the statement shall give the like

explanation as regards the holders of any security for the issue of

the debentures as it is required to give as regards the company’s

directors.

(5) Where a notice given by advertisement includes a

notification that copies of a statement explaining the effect of the

compromise or arrangement proposed can be obtained by creditors

or members entitled to attend the meeting, every such creditor or

member shall, on making a request in the manner indicated by the

notice, be furnished by the company free of charge with a copy of

the statement.

(6) If a company makes default in complying with any

requirement of this article, the company and every officer thereof

who is in default shall be liable to a penalty; and for this purpose a

liquidator of the company shall be deemed to be an officer of the

company

Provided that a person shall not be liable under this sub-

article if he shows that the default was due to the refusal of another

person, being a director, to supply the necessary particulars of his

interests.

(7) It shall be the duty of any director of the company to give

notice to the company and to any debenture holders of such matters

relating to himself as may be necessary for purposes of this article;

and any person who makes default in complying with this sub-

article shall be liable to a penalty.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 329 Provisions for facilitating company reconstruction or amalgamation. — COMPANIES ACT Open official source

(1) The provisions of this article shall apply where

application is made to the court under article 327 for the

sanctioning of a compromise or arrangement proposed between a

company and any such persons as are mentioned in that article.

(2)

If it is shown -

(a) that the compromise or arrangement has been proposed

for the purposes of, or in connection with, a scheme

for the reconstruction of any company or companies,

or the amalgamation of any two or more companies;

and

(b) that under the scheme the whole or any part of the

undertaking or the property of any company concerned

in the scheme (in this article referred to as "a

transferor company") is to be transferred to another

company (in this article referred to as "the transferee

company"),

the court may, either by the order sanctioning the compromise or

arrangement or by any subsequent order, make provision for all or

any of the matters specified in sub-article (3).

(3)

The matters for which the court’s order may make provision

(a) the transfer to the transferee company of the whole or

any part of the undertaking and of the property or

liabilities of any transferor company;

(b) the allotting or appropriation by the transferee

company of any shares, debentures, securities or other

like interests in that company which under the

compromise or arrangement are to be allotted or

appropriated by that company to or for any person;

(c) the continuation by or against the transferee company

of any legal proceedings pending by or against any

transferor company;

(d) the dissolution of any transferor company and the

striking off of its name, without its having to be wound

up;

(e) the provision to be made for any persons who, within

such time and in such manner as the court directs,

dissent from the compromise or arrangement;

(f)

such incidental, consequential and supplemental

matters as are necessary to secure that the

reconstruction or amalgamation is fully and effectively

carried out.

(4) If an order under this article provides for the transfer of

property or liabilities, then -

(a) that property shall by virtue of the order be transferred

to, and vest in, the transferee company; and

(b) those liabilities shall, by virtue of the order, be

transferred to and become liabilities of that company,

and property, if the order so directs, shall vest freed from any

charge or other burden which shall, by virtue of the compromise or

arrangement, cease to have effect.

(5) Where an order is made under this article, every company

in relation to which the order is made shall cause a certified copy of

the order to be delivered to the Registrar for registration within

seven days after its making; and if default is made in complying

with this sub-article, the company and every officer thereof who is

in default shall be liable to a penalty, and, for every day during

which the default continues, to a further penalty.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 329A Duties of directors where company unable to pay debts. — COMPANIES ACT Open official source

Where the directors of a company become aware that the

company is unable to pay its debts or is imminently likely to

become unable to pay its debts, they shall forthwith, not later than

thirty days from when the fact became known to them, duly

convene a general meeting of the company by means of a notice to

that effect for a date not later than forty days from the date of the

notice for the purpose of reviewing the company’s position and of

determining what steps should be taken to deal with the situation,

including consideration as to whether the company should be

dissolved or, where applicable, whether the company should make

a company recovery application in terms of article 329B.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 329B Company recovery procedure. — COMPANIES ACT Open official source

(1) (a) Where a company is unable to pay its debts or is

imminently likely to become unable to pay its debts, a company

recovery application may be made to the Court requesting the Court

to place the company under the company recovery procedure and to

appoint a special controller to take over, manage and administer the

business of the company for a period to be specified by the Court

subject to the limitation imposed by paragraph (d).

(b) A company recovery application, hereinafter in this

article also referred to as the "application", shall be

made by means of an application which may be made

(i)

by the company following an extraordinary

resolution;

(ii) by the directors following a decision of the

board of directors whenever, following a notice to

convene a general meeting in terms of article

329A, the general meeting does not convene, or a

quorum is not present at the said meeting, or a

resolution with regard to the filing of a recovery

application is not passed due to an unresolved tie

following a vote; or

(iii) by creditors of the company representing more

than half in value of the company’s creditors; or

(iv) by creditors forming part of a class of creditors if

such creditors represent more than half in value of

the company’s creditors in that class.

(c)

(i) Creditors with different interests should be treated

in separate classes which reflect those interests.

(ii) Where both secured and unsecured creditors exist,

they shall be treated as separate classes.

(d)

The appointment of a special controller shall be made for

a period not exceeding four months; provided that, at any

time during which the company recovery procedure is in

force, the court may, upon good cause being shown,

extend the period by further periods of four months,

provided that the aggregate additional periods do not

exceed a further eight months.

(e) The Minister may, by regulations, amend or substitute

the criteria for the purpose of establishing the

applicability of the provisions of this article.

(f)

No application may be submitted by a company after it

has been dissolved voluntarily or if, in respect of the

same company, a winding-up order has already been

made.

(2)

(a) The application shall, as far as possible, give the full

facts, circumstances and reasons which led to the

company’s inability or likely imminent inability to pay

its debts, together with a statement by the applicants as

to how the financial and economic situation of the

com pan y c an b e i m proved i n the in terests of it s

creditors, employees and of the company itself as a

viable going concern.

(b) Where an application is made by the company, the

following documents shall be annexed to it

(i)

a statement of the company’s assets and

liabilities made up to a date not earlier than the

date of the application by more than two

months; and

(ii) a list containing the names and addresses,

including electronic mail addresses, of the

creditors together with an indication of the

amount due to each such creditor and the

security, if any, of the respective creditors.

(c) Where the application is made by the creditors, it shall

be

accompanied

by

appropriate

supporting

documentation and statements.

(3)

(a) On the hearing of an application, the Court may, after

examining all the circumstances and the options that

are available, either dismiss the application or issue a

company recovery order, hereinafter also referred to in

this article as an "order", acceding thereto and placing

the company under the company recovery procedure.

(b) The Court shall accede to the application, and

accordingly place the company under the company

recovery procedure and issue an order, only if -

(i)

it is satisfied that the company is, or is

imminently likely to become, unable to pay its

debts within the meaning of article 214(5); and

(ii) if it considers that the making of the order would

be likely to achieve one of the following

purposes

- the survival of the company as a viable going

concern in part or in whole; or

- the sanctioning under article 327 of a

compromise or arrangement between the

company and any of its creditors or

members.

(c) In making an order, the Court shall take into account

(i)

the best interests of the creditors, regard being

had to the different classes of creditors, of the

shareholders and of the company itself, and the

possibility of safeguarding employment as

appears to be reasonably and financially

possible in the circumstances; and

(ii) the cost that would have to be incurred by

adopting the company recovery procedure,

particularly the fees and charges that would have

to be incurred.

(d) Where the company is in possession of a licence or

other authorisation under the laws regulating banking,

insurance, investment services, financial institutions

or listing of securities on a Maltese regulated market,

the court shall not proceed to make an order without

first having consulted with the relevant competent

authority responsible for supervising that company or

any of its activities.

(e) The Court shall take its decision whether to dismiss

the application or to make a company recovery order

within not more than forty working days from the

filing of the application.

(4)

(i) The provisions of this article shall not apply with

respect to any new financing given to the company for

the purpose of implementing a recovery plan

Provided that new financing under this Act shall

exclude financing, debts or obligations which already

existed at the time of the recovery order, even if such

financing, debts, or obligations are restructured in any

manner in order to be included with any financing

obtained or to be obtained after the recovery order.

(ii) Upon the submission of an application and unless it

is dismissed, or during the period during which the

company recovery procedure is in force

(a) any pending or new winding up application shall be

stayed;

(b) no resolution for the dissolution and consequential

winding up of the company may be passed or given

effect to;

(c) the execution of claims of a monetary nature against

the company and any interest that may otherwise

accrue thereon shall be stayed;

(d) during the tenure of the lease, no landlord or other

person to whom rent is payable may exercise any right

of termination of lease in relation to premises leased to

the company in respect of a failure by the company to

comply with any term or condition of its tenancy of

such premises, except with leave of the Court and

subject to such terms as the Court may deem fit to

impose;

(e) no other steps may be taken to enforce any security

over the property of the company, or to repossess

goods in the possession of the company under any

hire-purchase agreement, except with the leave of the

Court and subject to such terms as the Court may deem

fit to impose;

(f)

no precautionary or executive act or warrant

mentioned in the Code of Organization and Civil

Procedure shall be made or continued against the

company or any property of the company, including any

warrant in terms of article 312 of the Code of

Organization and Civil Procedure except with leave of

the Court and subject to such terms as the Court may

deem fit to impose;

(g) no arbitration proceeding shall be made or continued

against the company or any property of the company; and

(h) notwithstanding anything contained in this sub-article, no

judicial proceedings shall be commenced or continued

against the company or its property except with leave

of the Court and subject to such terms as the Court

thinks fit to impose.

(5)

(a) In the order, the Court shall

(i)

appoint an individual to act as a special

controller for a period as specified in sub-article

(1)(c). The special controller shall carry out such

functions and powers as the Court may entrust to

him in the administration and management of

the property and business of the company;

(ii) fix such reasonable remuneration of the special

controller, as the Court may consider appropriate

after taking into account the company’s financial

position, business and assets, and in terms of any

applicable regulations made by the Minister;

(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.

(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.

(c) For so long as the special controller holds office, the

fact of his appointment to such office and his full name

together with his residential or business address shall

be clearly indicated in all the business letters, order

forms, invoices and any other documents of the

company.

(6)

(a) During the period that an order is in force, the

company shall continue to carry on its normal

activities under the management of the special

controller.

(b) The special controller shall, as soon as possible upon

his appointment, take into his custody or under his

control all the property of the company and he shall

thenceforth be responsible to manage and supervise its

activities, business and property.

(c) The special controller shall examine the assets, affairs

and business performance of the company, and any

proposals made by the applicant in terms of sub-article

(2)(a) as to how the financial and economic situation of

the company can be improved, and shall ascertain and

verify whether there is a reasonable expectation of the

company’s recovery and continuation as a viable going

concern, in whole or in part, and he shall submit an

initial report thereon to the Court not later than two

months from the date of his appointment.

(d) On the appointment of the special controller, any

power conferred on the company, its directors or its

officers, whether by this Act, by any other law, or by

the Memorandum or Articles of Association of the

company, shall be suspended unless the consent of the

special controller to exercise such power has been

obtained, which consent may be given either generally

or in relation to a particular case or cases, and no

meeting of the company may be summoned except

with leave of the Court and subject to such terms as the

Court may deem fit to impose.

(e) During such time as the company recovery procedure

is in force, any duty conferred on the company, its

directors or its officers, whether by this Act, by any

other law, or by the Memorandum or Articles of

Association of the company, shall be assumed and

exercised by the special controller.

(f)

In addition and without prejudice to any other duty

assigned to the special controller by the Court or this

Act or any other law, the special controller shall be

obliged to perform his functions fairly and equitably

taking into account the best interests of the company,

its shareholders and creditors together with the

interests of any other interested party.

(g) In addition to the functions and powers entrusted to

him by the Court, the special controller shall have the

power

(i)

after informing the Court, by means of a note, to

remove any director of the company and to

appoint any individual to serve as a manager;

(ii) to engage persons for the provision of

professional or administrative services, and

commit the company to the payment of their

respective fees or charges; or

(iii) to call any meeting of the members or creditors

of the company.

(h) The special controller shall not, without the prior

express authorisation of the Court

(i)

engage the company into any commitment of

more than six months duration; or

(ii) terminate the employment of company

employees as he considers necessary for

insuring the continuation of the company as a

viable going concern in whole or in part; or

(iii) sell or otherwise dispose of property of the

company to himself, or to his spouse or relatives

and the provisions of article 306 shall apply as

though references to the liquidator were

references to the special controller.

(i)

The Court may, upon the request of the special

controller, and upon good cause being shown, extend

his appointment and relative functions and powers to

any company being a group company in relation to the

company placed under the company recovery

procedure, provided that, in so far as possible, the

Court shall, before so doing, hear the views of the

directors, or any of them, of such group company, as it

may deem appropriate.

(7)

(a) Within one month from his appointment, the special

controller shall convene a meeting or meetings of

creditors and members, or classes thereof, whether

separately or jointly as he may consider appropriate,

for the purpose of -

(i)

laying before them for their information and

review a comprehensive statement of the

company’s affairs together with preliminary

proposals on the future prospects and

management of the company;

(ii) appointing a joint creditors and members

committee, consisting of not more than three

creditors and not more than three members, to

render such advice and assistance as the special

controller may require in the management of the

affairs, business and property of the company

and its recovery as a viable going concern;

(iii) discussing the proposals for the future prospects

and management of the company, to be presented

to the court.

(b) Not less than seven days notice shall be given of the

holding of the first meeting of creditors and members, or

classes thereof, and the special controller shall also

send a copy of the notice convening the meeting to any

directors or other officers of the company, including

persons who have been directors or other officers in

the past, whose presence at the meeting is, in the

opinion of the special controller, required.

(c) The special controller shall publish a notice of the first

meeting of creditors and members, or classes thereof, in a

daily newspaper circulating wholly or mainly in Malta,

not later than seven days before the holding of the

meeting.

(d) Where for any reason the creditors or the members or

both do not appoint their representatives on the joint

creditors’ and members’ committee, the special

controller may proceed to continue in the exercise of

his functions without such committee or solely with a

creditors’ or members’ committee, as the case may be;

(e)

The special controller shall ensure that any notice

convening the first meeting of creditors or members, or

classes thereof, shall also be given to known creditors

residing or based abroad, and such foreign creditors shall

also be given the opportunity to participate in any such

meeting, and any voting rights may be exercised by

means of electronic communication.

(8)

(a) If during such time as the company recovery procedure

is in force, it appears that any business of the company

has been carried on with intent to defraud creditors of

the company or for any fraudulent purpose, the Court

on the application of the special controller, may, if it

thinks proper so to do, declare that any persons who

were knowingly parties to the carrying on of the

business in the manner aforesaid be personally

responsible, without any limitation of liability for all

or any of the debts or other liabilities of the company

as the Court may direct.

(b) Where the business of a company is carried on with

such intent or for such purposes as is mentioned in

paragraph (a), every person who was knowingly a

party in the carrying on of the business in the manner

aforesaid, shall be guilty of an offence and liable on

conviction to a fine (multa) of not more than two hundred

and thirty-two thousand and nine hundred and thirty-

seven euro (€232,937), or imprisonment for a term not

exceeding five (5) years, or to both such fine (multa) and

imprisonment.

(9)

(a) The provisions of this sub-article shall apply where a

company recovery procedure is in force and it appears

that a person who is a director of the company knew, or

ought to have known, that the company is unable to

pay its debts or is imminently likely to become unable

to pay its debts.

(b) The Court, on the application of the special controller

of a company to which this sub-article applies, may

declare the person being a director referred to in

paragraph (a) liable to make a payment towards the

company’s assets as the Court thinks fit.

(c) The Court shall not grant an application under this

sub-article if it is satisfied that the person who is a

director took every step he ought to have taken with a

view to minimising the potential loss to the company’s

creditors.

(d) For the purposes of paragraphs (b) and (c), the facts

which a director of a company ought to know or

ascertain, the conclusions which he ought to reach and

the steps which he ought to take, are those which

would be known or ascertained, or reached or taken,

by a reasonably diligent person having both -

(i)

the knowledge, skill and experience that may

reasonably be expected of a person carrying out

the same functions as are carried out by or

entrusted to that director in relation to the

company; and

(ii) the knowledge, skill and experience that the

director has.

(e) For the purposes of this sub-article, director includes a

person in accordance with whose directions or

instructions the directors of the company are

accustomed to act.

(10) (a) If a vacancy occurs by reason of death, resignation or

otherwise in the office of the special controller, the

Cou rt may appoint another in dividual to fill the

vacancy on an application made for this purpose by the

outgoing special controller, by a creditor, by a member,

by a director, or by the Court of its own motion, as the

case may be.

(b) The Court may, of its own motion or on the application

of any member or creditor, review, confirm, modify or

reverse any act or decision of the special controller

and give him such directions or orders as it deems fit

or remove a special controller if it is satisfied that

there exist sufficient grounds to warrant his removal

and appoint another special controller.

(11) (a) (i) At the end of the original period of appointment or at

the end of each extension, the special controller shall

submit to the Court a comprehensive report in writing

on the proceedings of his administration and of his

proposals regarding the prospects for the recovery of

the company as a viable going concern in whole or in

part.

(ii) The special controller may, if he deems it is

reasonably necessary, together with the said report,

present an application to the court for a one time

extension of his appointment for a further period of four

months up to a maximum period of appointment not

exceeding twelve months;

(b) When the special controller submits to the Court the

report referred to in paragraph (a), the Registrar of

Courts shall forthwith forward a copy of it to the

Registrar for registration;

(c) The court shall within a period not exceeding twenty

working days from the termination of the period of

appointment of the special controller, including any

extension thereof, declare the termination of the

company recovery procedure, and that the company

has recovered, or that it shall be dissolved and wound

up, irrespective whether it has received the said report

from the special controller. The court shall make such

provisions and conditions, as it may consider

necessary in the circumstances of the case;

(d) Any creditor or member or the Registrar or the Official

Receiver may at any time after the lapse of the twenty

working days mentioned in paragraph (c) apply to the

court for a declaration of the termination of the recovery

procedure.

(12) (a) If, at any time during which a company recovery

procedure is in force, it results to the special controller,

after consulting the joint creditors’ and members’

committee, that it would serve no useful purpose for

the company to continue with the said procedure, the

special controller shall forthwith make an application

to the Co urt for the t ermi nation of the com pany

reco ve ry p roced ure, co nt ain in g hi s det ai led a nd

comprehensive reasons therefor.

Following the receipt of the application made by the

special controller for the termination of the company

recovery procedure, the Court shall order that the

company be wound up by the Court. On the making of

the winding up order, a copy thereof shall forthwith be

forwarded by the Registrar of Courts to the Registrar

for registration.

(b) If, at any time during which a company recovery

procedure is in force, it results to the special

controller, after consulting the joint creditors’ and

members’ committee, that the affairs of the company

have improved to the extent that it is in a position to

pay its debts, he shall submit an application to the

Court, containing his detailed and comprehensive

reasons to that effect, and requesting the Court to issue

an order for the termination of the company recovery

procedure. In the event that the Court accedes the

application, it shall make such provisions and

conditions, as it may consider necessary in the

circumstances of the case.

(c) If, at any time during which a company recovery

procedure is in force, the directors of the company or

the members at an extraordinary general meeting

become satisfied that the affairs of the company have

improved to the extent that it is in a position to pay its

debts, they may submit an application to the Court,

accompanied by appropriate supporting documentation

and information, confirming that they are so satisfied,

and requesting the Court to issue an order for the

termination of the company recovery procedure, and

the Court shall not proceed to make an order acceding

to or declining the application without having first

heard the special controller.

In the event that the Court accedes the application, it

shall make such provisions and conditions, as it may

consider necessary in the circumstances of the case.

(d) At the end of the period of his appointment, the special

controller shall submit a written final report to the

Court containing his detailed and comprehensive

opinions and reasons as to whether or not the company

has a reasonable prospect of continuing as a viable

going concern in whole or in part and will be in a

position to pay its debts regularly in the future.

(e) Where the final report submitted by the special

controller expresses the opinion that the company has

a reasonable prospect of continuing as a viable going

concern, in whole or in part, regard being had to the

interests of the creditors, the company and its members,

and the particular classes of members and creditors, or

where an application is made to the Court by the

special controller under paragraph (b), it shall

additionally have attached to it a precise and detailed

recovery plan which shall contain all the proposals

required to enable the company to continue as a viable

going concern, with such explanations as may be

required to give effect to such recovery, including

proposals in relation to financial resources, including

new financing the retention of employees and the

future management of the company. The said recovery

plan shall also explain the proposed manner of paying

creditors the whole or a proportion of their claims,

whether a voluntary compromise has been reached

with all the creditors, or whether it is proposed that the

Court sanction a compromise which has not been

approved by all the creditors, and shall include the

position of the creditors with regard to the said proposals.

(f)

Following receipt of the application referred to in

paragraph (b) or of the final report and the recovery

plan, the Court may request any explanations and

clarifications as it may consider appropriate which

shall be provided either verbally or in writing as the

Court may direct.

(g) The Court may either reject the proposed recovery

plan, or it may accept and approve it in whole or in

part and may require amendments thereto. Where the

Court approves the recovery plan submitted by the

special controller, whether with or without

amendments as the Court may direct, the recovery plan

shall be effective and binding on all interested parties

for all purposes of law.

(h) Where the court accepts the proposed recovery plan, with

or without amendments, the dissenting creditors may

apply to the Court of Appeal (Inferior Jurisdiction)

constituted in terms of article 41(6) of the Code of

Organization and Civil Procedure, if they consider that

their rights are likely to be reduced to a level which is

lower than what they would be granted had the company

been dissolved and wound up at the time of the recovery

application in terms of sub-article (1)(b). In the interest

of the creditors supporting the plan, such appeal shall not

automatically suspend the implementation of the

recovery plan and procedures, and remedies shall be

limited to compensation for the loss suffered by the

applicant as a result of the recovery procedure.

(i)

Where the proposed recovery plan seeks new financing,

the providers thereof shall, in the absence of any

fraudulent actions, be exempt from civil and criminal

liability relating to the recovery procedure.

(13) (a) Upon the submission of a company recovery

application, the issue of a company recovery order, the

appointment and termination of the appointment of a

special controller and the appointment of a

replacement thereof, the submission of an application

for the termination of a company recovery order and

the order of the Court terminating the company

recovery procedure for any reason, the Registrar of

Courts shall forthwith submit a copy of any such

application, Court order or other relevant document to

the Registrar for registration.

(b) The Registrar of Courts shall forthwith forward a true

copy of the final report, as accepted and approved by

the Court, to the Registrar for registration.

(c) Notwithstanding the provisions of paragraphs (a) and

(b), a copy of the recovery plan, attached to the final

report or required to be attached to an application for

the termination of a company recovery order, shall not

be delivered to the Registrar together with such report

or application.

(14) Where, in terms of any of the provisions of this article, the

Court issues an order for the termination of the company recovery

procedure on the grounds that the company has no reasonable

prospect of continuing as a viable going concern and will not be in

a position to pay its debts regularly in the future, it shall order that

the company be wound up by the Court. On the making of the

winding up order, a copy thereof shall forthwith be forwarded by

the Registrar of Courts to the Registrar for registration.

(15) The Minister may make regulations for the better carrying

out of any of the provisions of this article.

PART VII - CONVERSION OF COMMERCIAL

PARTNERSHIPS

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 330 Requirements for conversion of commercial partnerships. — COMPANIES ACT Open official source

(1) A commercial partnership (in this Chapter referred to

a s " t h e c o m m e r c i a l p a r t n e r s hi p t o b e c o n v e r t e d " ) m a y, b y

complying with the requirements prescribed in relation to the

formation, share capital and validity of the kind of commercial

partnership into which it is to be converted, be converted into a

commercial partnership of that kind (in this Chapter referred to as

"the commercial partnership resulting from the conversion").

(2) Where the commercial partnership to be converted is either

an en nom collectif or an en commandite or limited partnership the

conversion may only be made by a decision taken in accordance

with the provisions of the deed of partnership or, in the absence of

any such provision, with the consent of all the partners both general

and limited

Provided that where one or more limited partners holding in

the aggregate not more than one-fourth of the total contribution of

the limited partners of a partnership en commandite or limited

partnership, the capital of which is not divided into shares, or one-

tenth of the share capital of the partnership en commandite or

limited partnership, the capital of which is divided into shares, have

not given their consent, the commercial partnership may

nevertheless proceed with the conversion, but it shall be required,

for the purposes of the conversion, to liquidate and re-imburse to

every limited partner who has not given his consent, if he so

requests, his interest in the commercial partnership or to redeem the

shares held by him on such terms as may be agreed or as the court,

on a demand of either the commercial partnership or the limited

partner, thinks fit to order.

(3) Where the commercial partnership to be converted is a

company, whether public or private, the conversion may only be

made if it has been approved by an extraordinary resolution taken

at a general meeting of the company. The company shall be

required, for the purpose of the conversion, to redeem the shares

held by the dissenting members, if they so request, on such terms as

may be agreed or as the court, on a demand of either the company

or the dissenting members, thinks fit to order.

(4) The commercial partnership to be converted shall be

dissolved without having to be wound up in accordance with the

provisions of Title II of Part V of this Act in relation to a company

and with the relevant provisions of Part III of this Act in relation to

the other kinds of commercial partnerships; and dissolution shall be

deemed to take place when the conversion becomes effective in

accordance with the provisions of article 332.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 331 Registration of the conversion of commercial partnerships. — COMPANIES ACT Open official source

(1) The decision or resolution approving the conversion

of a commercial partnership together with the instruments giving

effect to the decision or resolution, or an authentic copy thereof,

shall be delivered for registration to the Registrar who, being

satisfied that the requirements of article 330 have been complied

with, shall register it.

(2) The aforesaid delivery shall be made by any of the partners

or directors of the new commercial partnership as the case may be.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 332 Where commercial partnership ceases to exist on conversion. — COMPANIES ACT Open official source

(1) Upon the conversion of a commercial partnership

which has become effective either through the lapse of the period

referred to in article 334 or, where objection is made under that

article, by a decision of the court, the Registrar shall strike the

name of the commercial partnership that has been converted off the

register and shall issue a new certificate of registration for the

commercial partnership resulting from the conversion, denoting the

fact of the formation of that commercial partnership as a result of

the conversion. Where a conversion which has been registered

under this article becomes ineffective by a decision of the court

under article 334, the Registrar shall amend the registration

accordingly.

(2) The Registrar shall, in the cases specified in sub-article (1),

either proceed to publish the conversion after it has become

effective or to publish a notice that the conversion has become

ineffective by decision of the court under article 334, in accordance

with the provisions of article 401(1)(e).

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 333 Partners with unlimited liability to remain bound unless creditors consent to conversion. — COMPANIES ACT Open official source

The conversion of a commercial partnership shall not

discharge partners with unlimited liability from liability for the

obligations of the commercial partnership contracted prior to the

publication of the statement referred to in article 401(1)(e) unless it

is proved that the creditors of the commercial partnership have

given their consent to the conversion.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 334 Rights of creditors to oppose conversion. — COMPANIES ACT Open official source

(1) The conversion of a commercial partnership shall not

take effect until three months from the date of the publication of the

statement referred to in article 401(1)(e) relating to the decision or

resolution approving the conversion.

(2) During the aforesaid period of three months any creditor of

the commercial partnership whose debt existed prior to the

publication of the statement referred to in sub-article (1) may by

sworn application object to the conversion and, if he shows good

cause why it should not take effect, the court shall either uphold the

objection or allow the conversion on sufficient security being

given.

(3) Without prejudice to the provisions of sub-article (2) any

partner or shareholder, as the case may be, of the commercial

partnership being converted, or the Registrar, shall have the right to

challenge the validity of the conversion only within the aforesaid

period of three months by means of a sworn application.

(4) Where as a result of the proceedings for which provision is

made in sub-article (3), the court is satisfied that the conversion is

not valid, the court shall disallow the said conversion

Provided that the court shall have the right to suspend its

decision disallowing the conversion and to grant time, which shall

not be in excess of six months, to the commercial partnership in

default, to remedy the default rendering the conversion invalid; and

if the default is remedied within the time allowed the conversion

shall take effect.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 335 Commercial partnership formed succeeds commercial partnership ceasing to exist. — COMPANIES ACT Open official source

(1) The commercial partnership resulting from the

conversion shall succeed to all the assets, rights, liabilities and

obligations without the requirement of any formalities other than

those arising under this Part, and shall retain the same legal

personality of the commercial partnership that has been converted;

and the said succession shall be effective as regards third parties.

(2) Where the commercial partnership resulting from the

conversion is a partnership en nom collectif or a partnership en

commandite or limited partnership the unlimited liability of all the

partners in the partnership en nom collectif and that of the general

partners in the partnership en commandite or limited partnership, as

the case may be, shall also extend to the obligations of the

commercial partnership that has been converted.

PART VIII - AMALGAMATION OF COMMERCIAL

PARTNERSHIPS

TITLE I - AMALGAMATION OF PARTNERSHIPS EN NOM

COLLECTIF AND EN COMMANDITE

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 336 Application of articles 337 to 342. — COMPANIES ACT Open official source

(1) The provisions of articles 337 to 342 shall apply to

the amalgamation of partnerships en nom collectif and partnerships

en commandite or limited partnerships.

(2) Amalgamation between two or more commercial

p artn ershi ps (ref err ed t o i n t his P art as "t he am algam ati ng

c o m m e r c i a l p a r t n e r s h i p s " ) m a y b e e ff e c t e d w h e r e a l l t h e

amalgamating commercial partnerships are en nom collectif or

where they are all en commandite or limited partnerships or where

at least one of the commercial partnerships being amalgamated is

en nom collectif and the other commercial partnership or

partnerships are en commandite or limited partnerships, or vice

versa.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 337 Requirements for amalgamation of commercial partnerships. — COMPANIES ACT Open official source

(1) The provisions of article 330(2) shall apply to the

amalgamation of any two or more commercial partnerships whether

such an amalgamation is effected by the formation of a new

commercial partnership (referred to in this Part as "the new

commercial partnership") instead of the existing commercial

p a r t n e r s h i p s (r e f e r r e d t o i n t h i s P a r t a s " t h e c o m m e r c i a l

partnerships to be substituted") or by the merger of one or more

commercial partnerships (referred to in this Part as "the commercial

partnerships to be acquired") with another existing commercial

partnership (referred to in this Part as "the acquiring commercial

partnership") as though references to conversion therein were

references to amalgamation.

(2) The commercial partnerships to be acquired or, as the case

may be, the commercial partnerships to be substituted, shall be

dissolved without having to be wound up in accordance with the

relevant provisions of Part III of this Act, and dissolution shall be

deemed to take place when the amalgamation becomes effective in

accordance with the provisions of article 339.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 338 Registration of the amalgamation of commercial partnerships. — COMPANIES ACT Open official source

(1) The decisions taken by each of the amalgamating

commercial partnerships approving the amalgamation together with

the instruments giving effect thereto, or an authentic copy thereof,

shall be delivered for registration to the Registrar, who, being

satisfied that the requirements of article 337 have been complied

with, shall register them.

(2) The aforesaid delivery shall be made by any of the partners

of the new commercial partnership or of the acquiring commercial

partnership as the case may be.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 339 Where a commercial partnership ceases or partnerships cease to exist on amalgamation. — COMPANIES ACT Open official source

(1) Upon the amalgamation of two or more commercial

partnerships which has become effective either through the lapse of

the period referred to in article 341 or where objection is made

under that article, by a decision of the court, the Registrar shall

strike the name of the commercial partnership or of each of the

commercial partnerships ceasing to exist off the register and shall,

according to the case, either issue a new certificate of registration

for the new commercial partnership denoting the fact of the

f o r m a t i on o f t h e co m m e rc i a l pa r tn e r s hi p a s a r e s ul t of t he

amalgamation, or issue a certificate of registration altered to meet

t h e c i r c u m s t a n c es o f t h e c a se a n d d e n o t i n g t h e f a c t o f t h e

amalgamation for the acquiring commercial partnership; and where

an amalgamation which has been registered under this article

becomes ineffective by a decision of the court under article 341, the

Registrar shall amend the registration accordingly.

(2) The Registrar shall, in the cases specified in sub-article (1),

in respect of every one of the amalgamating commercial

partnerships, either proceed to publish the amalgamation after it

has become effective or to publish a notice that the amalgamation

has become ineffective by decision of the court under article 341,

in accordance with the provisions of article 401(1)(e).

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 340 Partners with unlimited liability to remain bound unless creditors consent to amalgamation. — COMPANIES ACT Open official source

The amalgamation of two or more commercial

partnerships shall not discharge partners with unlimited liability

from liability for the obligations of the amalgamating commercial

partnerships contracted prior to the publication of the statement

referred to in article 401(1)(e), unless it is proven that the creditors

of the amalgamating commercial partnerships have given their

consent to the amalgamation.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 341 Right of creditors to oppose amalgamation. — COMPANIES ACT Open official source

(1) The amalgamation of two or more commercial

partnerships shall not take effect until three months from the date

of the publication of the statement referred to in article 401(1)(e)

relating to the decisions approving the amalgamation.

(2) During the aforesaid period of three months any creditor of

any of the amalgamating commercial partnerships whose debt

existed prior to the publication of the statement referred to in sub-

article (1) may by sworn application object to the amalgamation,

and if he shows good cause why it should not take effect, the court

shall either uphold the objection or allow the amalgamation to

proceed upon sufficient security being given.

(3) Without prejudice to the provisions of sub-article (2) any

partner of any of the amalgamating commercial partnerships or the

Registrar shall have the right to challenge the validity of the

amalgamation only within the aforesaid period of three months by

means of a sworn application.

(4) Where as a result of the proceedings for which provision is

made in sub-article (3), the court is satisfied that the amalgamation

is not valid, the court shall disallow the said amalgamation

Provided that the court shall have the right to suspend its

decision disallowing the amalgamation and to grant time which

shall not be in excess of six months, to the commercial partnership

or partnerships in default to remedy the default rendering the

amalgamation invalid; and if the default is remedied within the

time allowed, the amalgamation shall take effect.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 342 Acquiring or new commercial partnership succeeds commercial partnership ceasing to exist. — COMPANIES ACT Open official source

(1) An acquiring commercial partnership or, where a new

commercial partnership is formed, the new commercial partnership,

shall succeed to all the assets, rights, liabilities and obligations of

the commercial partnership or partnerships ceasing to exist,

without the requirement of any formalities other than those

required under this Title, and the said succession shall be effective

as regards third parties.

(2) Where the acquiring commercial partnership or the new

commercial partnership, as the case may be, is a partnership en nom

collectif, the unlimited liability of all the partners thereof shall also

ext end t o th e obli gatio ns of the commercial partnership or

partnerships ceasing to exist.

(3) Where the acquiring commercial partnership or the new

commercial partnership as the case may be is a partnership en

commandite or limited partnership the unlimited liability of all the

general partners thereof shall also extend to the obligations of the

commercial partnership or partnerships ceasing to exist.

TITLE II - AMALGAMATION OF COMPANIES

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 343 Amalgamation in the form of a "merger by formation of a new company" or "merger by acquisition". — COMPANIES ACT Open official source

(1) Amalgamation of two or more companies may be

effected by -

(a) merger by acquisition; or

(b) merger by formation of a new company.

(2) Merger by acquisition is the operation whereby a company

(referred to in this Part as "the acquiring company") acquires all the

assets and liabilities of one or more other companies (referred to in

this Part as "the companies being acquired") in exchange for the

issue to the shareholders of the companies being acquired of shares

in the acquiring company and a cash payment, if any, not exceeding

ten per cent of the nominal value of the shares so issued.

(3) Merger by formation of a new company is the operation

whereby two or more companies (referred to in this Part as "the

merging companies") deliver to a company which they set up

(referred to in this Part as "the new company") all their assets and

liabilities in exchange for the issue to the shareholders of the

merging companies of shares in the new company and a cash

payment, if any, not exceeding ten per cent of the nominal value of

the shares so issued.

(4) The companies being acquired or, as the case may be, the

merging companies, shall be dissolved without having to be wound

up in accordance with the provisions of Title II of Part V of this Act

and dissolution shall be deemed to take place when the

amalgamation becomes effective in accordance with the provisions

of article 353.

(5) The fact that one or more of the companies being acquired,

or one or more of the merging companies has been dissolved

voluntarily by an extraordinary resolution, and a declaration of

solvency has been filed shall not prevent such companies taking

part in the amalgamation provided that none of their assets have

been distributed to shareholders after dissolution. Any provision of

this Part requiring the directors of a company to act shall be

interpreted in relation to a company which has been dissolved as

requiring the liquidator to act.

(6) The fact that one or more of the companies being acquired

or one or more of the merging companies has been dissolved by the

court in terms of article 214, and in the case of a voluntary winding

up a declaration of solvency has not been filed, shall invalidate the

amalgamation with respect to all the amalgamating companies.

(7) A company may only be amalgamated with one or more

companies, and may not be amalgamated with any other kind of

commercial partnership.

Chapter I - Merger by acquisition

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 344 Draft terms of merger. — COMPANIES ACT Open official source

(1) The directors of the acquiring company and of each of

the companies being acquired (hereinafter referred to in this Part as

"the amalgamating companies") shall draw up draft terms of merger

in writing.

(2)

The draft terms of merger shall specify the following

(a) the status, name and registered office of each of the

amalgamating companies;

(b) the share exchange ratio and the amount of any cash

payment;

(c) the terms relating to the allotment of shares in the

acquiring company;

(d) the date from which the holding of such shares entitles

the holders to participate in profits and any special

conditions affecting that entitlement;

(e) the date from which the transactions of each of the

companies being acquired shall be treated for

accounting purposes as being those of the acquiring

company;

(f)

the rights conferred by the acquiring company on the

holders of shares to which special rights are attached

and on the holders of debentures or other securities, or

the measures proposed concerning them; and

(g) any special advantage granted to the experts referred

to in article 348 acting on behalf of each of the

amalgamating companies authorised to examine the

draft terms of merger and to draw up a written report

to the shareholders, and to the directors of each of the

amalgamating companies.

(3) The draft terms of merger, duly completed, shall be signed

by at least one director and the company secretary of each of the

amalgamating companies, and forwarded to the Registrar for

registration, who being satisfied that the requirements of sub-

article (2) have been complied with, shall register them.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 345 Approval by extraordinary resolution of amalgamation. — COMPANIES ACT Open official source

(1) A merger by acquisition shall only be made if it has

been approved by an extraordinary resolution of each of the

amalgamating companies. Each of such companies shall be

required to redeem the shares held by the dissenting members, if

they so request, on such terms as may be agreed or as the court, on

a demand by either the company or the dissenting members, thinks

fit to order.

(2) For the purposes of sub-article (1), approval shall not be

valid unless the extraordinary resolution is adopted at least one

month after the publication of the draft terms of merger and not

later than three months therefrom.

(3) The provisions of this Act governing alterations and

additions to the memorandum and articles shall, as appropriate,

apply to any alterations and additions to the memorandum and

articles necessitated by any amalgamation referred to in this Part.

(4) Where there is more than one class of shares in any of the

amalgamating companies the extraordinary resolutions of those

companies concerning the amalgamation shall be subject to a

separate vote by at least each class of shareholders whose rights are

affected thereby.

(5) The extraordinary resolution taken by each of the

amalgamating companies shall cover both the approval of the draft

terms of merger and any alterations and additions to the

memorandum and articles necessitated by the amalgamation.

(6) The approval of the general meeting of the acquiring

company shall not be required if the following conditions are

fulfilled -

(a) the draft terms of the merger for the acquiring

company have been duly published in accordance with

paragraph (e) of sub-article (1) of article 401 by the

Registrar at least one month before, and not more than

three months before the date fixed for the general

meeting of the company or the latest of the separate

general meetings of the companies being acquired

which are to decide on the draft terms of merger; and

(b) at least one month before the date specified in

paragraph (a), all shareholders of the acquiring

company shall be entitled to inspect the documents

referred to in article 349, in accordance with the

provisions of that article

Provided that, in any case, one or more shareholders of the

acquiring company holding at least five per cent of the issued share

capital of the company entitled to vote at general meetings of the

company shall have the right to require that a general meeting of

the acquiring company be called to decide whether to approve the

amalgamation.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 346 Drawing up of detailed written report on draft terms of merger by directors. — COMPANIES ACT Open official source

(1) The directors of each of the amalgamating companies

shall

(a) draw up a detailed written report explaining the draft

terms of the merger and setting out the legal and

economic grounds for them, in particular the share

exchange ratio, and shall describe any special

valuation difficulties which have arisen; and

(b) inform the general meeting of their company and the

directors of the other amalgamating company or

companies so that they may inform their respective

general meetings, of any material change in the assets

and liabilities between the date of preparation of the

draft terms of merger and the date of the general

meetings which are to decide on the draft terms of

merger.

(2) The report referred to in sub-article (1)(a) and the

information referred to in sub-article (1)(b) shall not be required if

all the shareholders and the holders of other securities conferring

the right to vote of each of the amalgamating companies have so

agreed.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 347 Non applicability of article 73(4), (5) and (6) in certain cases of amalgamation. — COMPANIES ACT Open official source

In the event of an increase in the issued share capital made

to pay the shareholders of the companies being acquired in order to

give effect to an amalgamation, article 73(4), (5) and (6) shall not

apply where an independent expert’s report on the draft terms of

merger is drawn up.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 348 Written report to shareholders to be drawn up by one or more experts. — COMPANIES ACT Open official source

(1) One or more experts acting on behalf of each of the

amalgamating companies, but independent of them and approved

by the Registrar, shall examine the draft terms of the merger and

draw up a written report to the shareholders.

(2) The report shall specify whether the share exchange ratio is

fair and reasonable and to this effect it shall -

(a) indicate the method or methods used to arrive at the

share exchange ratio proposed; and

(b) state whether such method or methods are adequate in

the case in question, indicating the values arrived at

using each such method and giving an opinion on the

relative importance attributed to such method or

methods in arriving at the value decided on.

(3) The report shall describe any special valuation difficulties

which have arisen.

(4) Each expert shall be entitled to obtain from the

amalgamating companies all relevant information and documents

and to carry out all necessary investigations.

(5) One or more independent experts may be appointed to draw

up a joint report for all the amalgamating companies by the

Registrar at the joint request of the companies involved.

(6) The provisions of this article shall not apply if all the

shareholders of all the companies involved in the amalgamation

have so agreed.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 349 Documents which shareholders of amalgamating companies are entitled to inspect. — COMPANIES ACT Open official source

(1) All shareholders of every amalgamating company are

entitled to inspect the following documents at the registered office

of each company at least one month before the date fixed for the

general meeting which is to decide on the draft terms of merger -

(a) the draft terms of merger;

(b) the annual accounts and the directors’ reports of the

amalgamating companies for the preceding three

accounting periods;

(c) where required, an accounting statement drawn up as

at a date which shall not be earlier than the first day of

the third month preceding the date of the draft terms of

the merger, if the latest annual accounts relate to an

accounting period which ended more than six months

before that date;

(d) where required, the reports of the directors of the

amalgamating

companies

relating

to

the

amalgamation;

(e) where required, the reports of the experts relating to

the amalgamation; and

(f) for the purposes of paragraph (c), an accounting

statement shall not be required if the company

publishes a half-yearly financial report in accordance

with Capital Markets Rules issued in terms of the

Financial Markets Act and governing such reports, and

makes it available to shareholders in accordance with

this sub-article. Furthermore, an accounting statement

shall not be required if all the shareholders and all

holders of other securities conferring the right to vote

of each of the companies involved in the merger have

so agreed.

(2) The accounting statement provided for in paragraph (c) of

sub-article (1) shall be drawn up using the same methods and the

same layout as used for the latest balance sheet

Provided that -

(a) it shall not be necessary to take a fresh physical

inventory; and

(b) the valuations shown in the latest balance sheet shall

be altered only to reflect entries in the accounting

records.

Notwithstanding the provisions of paragraphs (a)

and (b), interim depreciation and provisions as well as

material changes in actual values not shown in the

accounting records shall be taken into account.

(3) Every shareholder shall be entitled to obtain, on request and

free of charge, full or, if so desired, partial copies of the documents

m e n t i o n ed i n s u b - a r t i c l e ( 1 ) , a n d w h e r e a s h a r e h o l d e r h a s

consented to the use by the company of electronic means for

conveying information, such copies may be provided in such

manner.

(4) A company shall be exempt from the requirement to make

the documents referred to in sub-article (1) available at its

registered office if, for a continuous period beginning at least one

month before the day fixed for the general meeting which is to

decide on the draft terms of merger and ending not earlier than the

conclusion of that meeting, it makes them available on its website.

(5) Sub-article (3) shall not apply if the company’s website

gives shareholders the possibility, throughout the period referred to

in sub-article (4), of downloading and printing the documents

referred to in sub-article (1).

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 350 Registration of the amalgamation of companies. — COMPANIES ACT Open official source

The extraordinary resolutions taken by each of the

amalgamating companies approving the amalgamation together

with the instruments giving effect thereto, or an authentic copy

thereof, shall be delivered for registration to the Registrar, who,

being satisfied that the requirements of this Part have been

complied with, shall register them.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 351 Rights of creditors to oppose amalgamation. — COMPANIES ACT Open official source

(1) The amalgamation of two or more companies shall

not take effect un til three months from the date of the last

publication of the statement referred to in article 401(1)(e) relating

to the extraordinary resolutions approving the amalgamation,

referred to in article 350.

(2) During the aforesaid period of three months any creditor of

any of the amalgamating companies whose debt existed prior to the

publication of the draft terms of merger in terms of article 345(6)(a)

may by sworn application object to the amalgamation and, if he

shows good cause why it should not take effect, the court shall

either uphold the objection or allow the amalgamation on sufficient

security being given.

(3) The provisions of sub-articles (1) and (2) shall apply to the

debenture holders of the amalgamating companies so long as the

merger has not already been approved by the debenture holders

individually, or by a special meeting of the debenture holders called

specifically for the purpose, at which meeting all the debenture

holders shall signify their consent.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 352 Protection of holders of securities in an amalgamation. — COMPANIES ACT Open official source

The holders of securities, other than shares, in the

companies being acquired, to which special rights are attached

shall be given rights against the acquiring company in accordance

with the draft terms of merger at least equivalent to those they

possessed in the companies being acquired, unless -

(a) the holders of those securities individually agree to the

alteration of their rights; or

(b) the alteration has been approved by a meeting of the

holders of those securities called specifically for the

purpose, at which meeting all the holders of such

securities shall signify their consent; or

(c) the holders of those securities are entitled to have their

securities re-purchased by the acquiring company.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 353 Duties of Registrar in respect of amalgamations. — COMPANIES ACT Open official source

(1) Upon the amalgamation of two or more companies

which has become effective either through the lapse of the period

referred to in article 351 or, where objection is made under that

article, by decision of the court, the Registrar shall strike the name

of the companies being acquired off the register and issue a

certificate of registration, altered to meet the circumstances of the

case and denoting the fact of the merger for the acquiring company;

and where an amalgamation which has been registered under this

Part does not become effective pursuant to a decision of the court

under article 351, the Registrar shall amend the registration

accordingly.

(2) The Registrar shall in respect of every one of the

amalgamating companies, either proceed to publish a notice of the

amalgamation after it has become effective or to publish a notice

that the amalgamation has not become effective pursuant to a

decision of the court under article 351, in both cases as specified in

sub-article (1).

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 354 Consequences of amalgamation. — COMPANIES ACT Open official source

(1) An amalgamation shall have the following

consequences

(a) the acquiring company shall succeed to all the assets,

rights, liabilities and obligations of the companies

being acquired, both as between the companies being

acquired and the acquiring company and as regards

third parties, without the requirement of any

formalities other than those arising under this Title;

(b) the shareholders of the companies being acquired shall

become shareholders of the acquiring company; and

(c) the companies being acquired shall cease to exist.

(2) No shares in the acquiring company shall be exchanged for

shares in the companies being acquired held either -

(a) by the acquiring company; or

(b) by the companies being acquired.

(3) Where the assets of a company being acquired include

immovable property or rights relating thereto, the directors of the

acquiring company shall cause within one month from the coming

into force of the amalgamation, a declaratory public deed to be

published, containing a detailed description of the immovable

property or rights relating thereto delivered to the acquiring

company, and a true copy of the said deed shall be lodged with the

Registrar within fourteen days from the enrolment thereof at the

Public Registry.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 355 Liability of director or expert for misconduct. — COMPANIES ACT Open official source

Any director of any of the amalgamating companies

answerable for wilful or negligent misconduct in the preparation

and the implementation of the amalgamation, or any expert

responsible for drawing up, on behalf of any of the amalgamating

c o m p a n i e s , o f t h e r e p o r t o n t h e d r a f t t e r m s o f t h e m e rg e r

answerable for wilful or negligent misconduct in the performance

of his duties, shall be liable for all damages occasioned to any

shareholder of any of the amalgamating companies as a

consequence of his misconduct.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 356 Appeal from decision of the Registrar. — COMPANIES ACT Open official source

Any interested party may contest the registration made by

the Registrar, by virtue either of article 344 or article 350 before

the court in accordance with the following conditions

(a) the contestation shall be made by application against

the Registrar within one month from the publication

following the registration referred to in article 344 on

the grounds that the draft terms of merger were not

drawn up in accordance with the provisions of article

344; or within three months from the publication

following the registration referred to in article 350 on

the grounds that the resolution of the extraordinary

general meeting was void or voidable; notice of the

application shall be published by the Registrar in the

Gazette or on a website maintained by the Registrar;

(b) where it is possible to remedy a defect liable to render

an amalgamation void or voidable, the court shall

grant the companies involved a period within which to

rectify the situation;

(c) a notice that the judgment of the court has been

delivered shall be published by the Registrar in the

Gazette or on a website maintained by the Registrar,

which notice shall specify whether the application has

been allowed or dismissed;

(d) a judgment declaring an amalgamation void or

voidable shall not of itself affect the validity of

obligations owed by or in relation to the acquiring

company which arose before the judgment was

delivered and after the date of registration of the draft

terms of merger referred to in article 344 or of the

resolutions and the other instruments referred to in

article 350 according to the case;

(e) companies which have been parties to an

amalgamation shall be jointly and severally liable in

respect of the obligations of the acquiring company

referred to in paragraph (d);

(f)

the amalgamation shall not take effect until the lapse

of the three months referred to in paragraph (a) or, if

an application is filed, until the date of the final

judgment, if the application is refused; and

(g) upon the delivery of the judgment the Registrar shall,

where the application is allowed, amend the

registration accordingly as if the amalgamation

procedure had never commenced.

Chapter II - Merger by formation of a new company

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 357 Application of articles 344 to 356 to merger by formation of a new company. — COMPANIES ACT Open official source

(1) The provisions of articles 344 to 356 other than article

345(6) shall apply to merger by formation of a new company as

though references to the acquiring company were references to the

new company and as though references to the amalgamating

companies and to the companies being acquired were references to

the merging companies

Provided that, in the case of a merger by formation of a new

company, the draft terms of merger shall only be drawn up by each

of the merging companies

Provided further that in article 344(2)(a), the reference to

amalgamating companies shall also include the new company.

(2) The draft terms of merger of each of the merging companies

and the memorandum and articles of association of the new

company shall be approved by an extraordinary resolution of each

of the merging companies.

(3) The new company shall be formed in accordance with the

provisions of this Act except that the rules governing the

verification of any consideration other than cash laid down in

article 73(4), (5) and (6) shall not apply where an independent

expert’s report on the draft terms of merger is drawn up.

(4) The Registrar shall, after striking the name of the company

being acquired off the register in accordance with the provisions of

article 353(1), proceed to issue a certificate of registration for the

new company denoting the fact of the formation of that company as

a result of the merger.

Chapter III - Acquisition of one company by another which

holds ninety per cent or more of its shares

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 358 Acquisition of one company by another which holds all its shares. — COMPANIES ACT Open official source

(1) The operation whereby the assets and liabilities of

one or more companies are delivered to another company which is

the holder of all their shares and other securities conferring the

right to vote at general meetings and whereby the former

companies are dissolved without having to be wound up shall be

regulated by articles 344 to 356 to the exclusion of the provisions

contained in article 344(2)(b), (c) and (d), article 346, article 348,

particle 349(1)(d) and (e), article 354(1)(b) and article 355.

(2) For the purpose of this article and of article 359, any

reference to "draft terms of acquisition" shall be taken to be a

reference to "draft terms of merger" as specified in article 344.

(3) The approval of the general meeting of each of the

companies involved in the operation shall not be required and

article 345 shall not apply to the operation specified in sub-article

(1), if the following conditions are fulfilled

(a) the draft terms of acquisition as regards each company

involved in the operation shall be delivered to the

Registrar for registration and shall be published by

him at least three months before the operation takes

effect; and

(b) within the period mentioned in paragraph (a), all

shareholders of the acquiring company shall be

entitled to inspect at the registered office of the

company the documents specified in article 349(1)(a),

(b) and where required, (c) which those same

shareholders would be entitled to inspect in case of an

amalgamation made in any of the manners specified in

article 343; and the provisions of article 349(2), (3),

(4) and (5) shall apply

Provided that, in any case, the shareholders of the acquiring

company holding at least five per cent of the issued share capital

carrying the right to vote at general meetings of the company shall

be entitled to require that a general meeting of the acquiring

company be called to decide whether to approve the operation.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 359 Acquisition of one company by another which holds 90% or more, but not all, of its voting shares. — COMPANIES ACT Open official source

(1) Where a merger by acquisition is carried out by a

company which holds ninety per cent or more, but not all, of the

shares and other securities conferring the right to vote at general

meetings of the company or companies being acquired, the general

meeting of the acquiring company need not approve the acquisition

provided the following conditions are fulfilled

(a) the draft terms of the acquisition as regards the

acquiring company shall be delivered to the Registrar

for registration and shall be published by him;

(b) the general meetings of the companies being acquired

which are to decide on the draft terms of acquisition

shall be held at least one month after, and not later

than three months from the publication referred to in

paragraph (a);

(c) within the period mentioned in the preceding

paragraph, all shareholders of the acquiring company

shall be entitled to inspect the documents referred to in

article 358(3)(b) and the provisions of the said article

358(3)(b) shall apply;

(d) the provisions of the proviso to article 358(3) shall

apply to the acquisition regulated by this article.

(2) All the other provisions of Chapter I of this Part relating to

merger by acquisition shall apply

Provided that the provisions regarding the drawing up of a

report on the draft terms of the merger by the directors and by the

experts as specified in articles 346 and 348 respectively and the

right of all shareholders to inspect and obtain copies of the

documents specified in article 349 shall not apply, as long as the

dissenting minority shareholders of the company or companies

being acquired have the right to have their shares purchased by the

acquiring company for a consideration corresponding to the fair

value of their shares and in the event of disagreement regarding the

fair value of such consideration, as shall be determined by the

court.

PART IX - DIVISION OF COMPANIES

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 360 Division of a company by acquisition or by formation of new companies. — COMPANIES ACT Open official source

(1) Division of a company into two or more companies

may be effected by -

(a) division by acquisition; or

(b) division by formation of new companies; or

(c) division by a combination of a division by acquisition

with a division by the formation of one or more new

companies.

(2) Division by acquisition is the operation whereby a company

(referred to in this Part as "the company to be divided") delivers to

two or more existing companies (referred to in this Part as "the

recipient companies") all its assets and liabilities in exchange for

the allocation to the shareholders of the company to be divided of

shares in the recipient companies and a cash payment, if any, not

exceeding ten per cent of the nominal value of the shares so issued.

(3) Division by formation of new companies is the same as the

operation described in sub-article (2) except that the recipient

companies are formed as new companies for the purposes of taking

part in the division. The expression "the companies involved in a

division" used in the case of a division by formation of new

companies in this Part shall be interpreted as referring only to the

company to be divided.

(4) Division by a combination of a division by acquisition with

a division by formation of one or more new companies is the same

as the operation described in sub-article (2) combined with the

operation as described in sub-article (3).

(5) The company to be divided shall be dissolved without

having to be wound up in accordance with the provisions of Title II

of Part V of this Act; dissolution shall be deemed to take place

when the division becomes effective in accordance with the

provisions of article 370.

(6) The fact that the company to be divided has been dissolved

voluntarily by an extraordinary resolution, and a declaration of

solvency has been filed, shall not prevent that company taking part

in the division provided that none of its assets have been

distributed to shareholders after dissolution. Any provision of this

Part requiring the directors of a company to act shall be interpreted

in relation to a company which has been dissolved as requiring the

liquidator to act.

(7) The fact that the company to be divided has been dissolved

by the court in terms of article 214, and in the case of a voluntary

winding up a declaration of solvency has not been filed, shall

invalidate the division with respect to all the companies involved in

the division.

(8) A division of a company may only be effected into two or

more companies, and it shall not be possible to effect a division

involving any other kind of commercial partnership.

Chapter I - Division by acquisition

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 361 Draft terms of division. — COMPANIES ACT Open official source

(1) The directors of the company to be divided and of

each of the recipient companies (hereinafter referred to in this Part

as "the companies involved in a division") shall draw up draft terms

of division in writing.

(2)

The draft terms of division shall specify the following

(a) the status, name and registered office of each of the

companies involved in the division;

(b) the share exchange ratio and the amount of any cash

payment;

(c) the terms relating to the allotment of shares in each of

the recipient companies;

(d) the date from which the holding of such shares entitles

the holders to participate in profits and any special

conditions affecting that entitlement;

(e) the date from which the transactions of the company to

be divided shall be treated for accounting purposes as

being those of one or other of the recipient companies;

(f)

the rights conferred by each of the recipient companies

on the holders of shares to which special rights are

attached and the holders of securities other than

shares, or the measures proposed concerning them;

(g) any special advantage granted to the experts referred

to in article 364 and to the directors of each of the

companies involved in the division;

(h) the precise and detailed description and allocation of

the assets, rights, liabilities and obligations to be

delivered to each of the recipient companies; and

(i)

the allocation to the shareholders of the company to be

divided of shares in the recipient companies and the

criterion upon which such allocation is based.

(3) Where an asset is not allocated by the draft terms of

division and where the interpretation of these terms does not make

a decision on its allocation possible, the asset or the consideration

therefor shall be allocated to all the recipient companies in

proportion to the share of the net assets allocated to each of those

companies under the draft terms of the division.

(4) Where a liability is not allocated by the draft terms of

division and where the interpretation of these terms does not make

a de c i s i o n o n i t s al l oc a t io n po s s ib l e , e a c h o f t he r e c i p ie nt

companies shall be jointly and severally liable for it

Provided that such joint and several liability shall be

limited to the net assets allocated to each company.

(5) The draft terms of division for each of the companies

involved in a division duly completed, shall be signed by at least

one director and the company secretary of each of the companies

involved in the division, and forwarded to the Registrar by each

company for registration, who being satisfied that the requirements

of the provisions of this article have been complied with, shall

register them.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 362 Approval by extraordinary resolution of division. — COMPANIES ACT Open official source

(1) A division may only be made if it has been approved

by an extraordinary resolution of each company involved in the

division to be adopted by each such company at least one month

after the publication of its draft terms of division and not later than

three months therefrom.

(2) Where shares in the recipient companies are allocated to the

shareholders of the company to be divided otherwise than in

proportion to their rights in the capital of that company, the

dissenting members of that company may exercise the right to have

their shares redeemed. In such case, the shares shall be redeemed

on such terms as may be agreed or as the court, on a demand made

either by any of the recipient companies or by any of the dissenting

members of the company to be divided, thinks fit to order.

(3) The provisions of this Act governing alterations and

additions to the memorandum and articles shall, as appropriate,

apply to any alterations and additions to the memorandum and

articles necessitated by any division referred to in this Part.

(4) Where there is more than one class of shares in any of the

companies involved in a division the extraordinary resolutions of

those companies concerning the division shall be subject to a

separate vote by at least each class of shareholders whose rights are

affected thereby.

(5) The extraordinary resolution taken by each of the

companies involved in a division shall cover both the approval of

the draft terms of division and any alterations and additions to the

memorandum and articles necessitated by the division.

(6) The general meeting of any recipient company shall not be

required if the following conditions are fulfilled

(a) the publication of the statement referred to in article

401(1)(e), provided for pursuant to the registration

required by virtue of article 361(5) shall be effected,

for each recipient company, at least one month and not

more than three months before the date fixed for the

general meeting of the company to be divided which is

to decide on the draft terms of division;

(b) at least one month before the date specified in

paragraph (a) all shareholders of each recipient

company shall be entitled to inspect the documents

specified in article 365(1) in accordance with the

provisions of that article; and

(c) one or more shareholders of any recipient company

holding at least five per cent of the issued share capital

which carries a right to vote at general meetings of the

company shall be entitled to require that a general

meeting of that recipient company be called to decide

whether to approve the division.

(7) Without prejudice to sub-article (6), approval of the

division by the general meeting of the company being divided shall

not be required if the recipient companies together hold all the

shares and other securities conferring the right to vote at general

meetin gs of the com pany b eing d ivid ed , and the f oll owing

conditions are fulfilled

(a) the publication of the statement referred to in article

401(1)(e), provided for pursuant to the registration

required by virtue of article 361(5) shall be effected,

for all companies involved in the division, at least one

month and not more than three months before the date

fixed for the general meeting of the company to be

divided which is to decide on the draft terms of

division;

(b) at least one month before the date specified in

paragraph (a) all shareholders of all companies

involved in the division shall be entitled to inspect the

documents specified in article 365(1) in accordance

with the provisions of that article; and

(c) where a general meeting of the company being

divided, required for the approval of the division, is

not convened, the information provided for by article

363(4) covers any material change in the assets and

liabilities after the date of preparation of the draft

terms of division.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 363 Drawing up of detailed written report on draft terms of division by directors. — COMPANIES ACT Open official source

(1) The directors of each of the companies involved in a

division shall draw up a detailed written report explaining the draft

terms of division and setting out the legal and economic grounds

for them, in particular the share exchange ratio and the criterion

determining the allocation of shares. The report shall also describe

any special valuation difficulties which have arisen.

(2) Where applicable, the report shall refer to any report

prepared pursuant to article 73(4).

(3) The directors of a company to be divided shall inform the

general meeting of that company of any material change in the

assets and liabilities between the date of preparation of the draft

terms of division and the date of the general meeting of the

company to be divided which is to be convened to decide on the

draft terms of division.

(4) The directors of a company to be divided shall furthermore

inform the directors of the recipient companies so that these

directors can inform the respective general meetings of any

material change in the assets and liabilities as specified in sub-

article (3).

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 364 Written report to shareholders to be drawn up by one or more experts. — COMPANIES ACT Open official source

(1) One or more experts acting on behalf of each of the

companies involved in a division but independent of them and

approved by the Registrar, shall examine the draft terms of division

and draw up a written report to the shareholders.

(2)

The provisions of article 348(2) to (5) shall apply to the

report.

(3) The report on considerations other than in cash referred to

in article 73(4) and the report on the draft terms of division drawn

up in accordance with sub-article (1) shall be drawn up by the

expert or experts approved under sub-article (1)

Provided that the report on considerations other than in

cash shall not be required if a written report in accordance with

sub-article (1) has been drawn up.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 365 Documents which shareholders of companies involved in a division are entitled to inspect. — COMPANIES ACT Open official source

(1) All shareholders of the companies involved in a

division shall be entitled to inspect the following documents at the

registered office of each company involved in the division at least

one month before the date of the general meeting which is to decide

on the draft terms of division

(a) the draft terms of division;

(b) the annual accounts and directors’ reports of the

companies involved in the division for the preceding

three accounting periods;

(c) an accounting statement drawn up as at a date which

shall not be earlier than the first day of the third month

preceding the date of the draft terms of division, if the

latest annual accounts relate to an accounting period

which ended more than six months before that date;

(d) the reports of the directors of the companies involved

in the division provided for in article 363(1); and

(e) the reports provided for in article 364

Provided that for the purposes of paragraph (c), an

a c c o un t in g st a t e m e n t sh a ll no t b e re quired if the company

publishes a half-yearly financial report in accordance with Capital

Markets Rules issued in terms of the Financial Markets Act and

governing such reports, and makes it available to shareholders in

accordance with this sub-article.

(2) The accounting statement provided for in sub-article (1)(c)

shall be drawn up using the same methods and the same layout as

the latest balance sheet

Provided that -

(a) it shall not be necessary to take a fresh physical

inventory;

(b) the valuations shown in the latest balance sheet shall

be altered only to reflect entries in the accounting

records; and

(c) the following shall nevertheless be taken into account

interim depreciation and provisions, and material

changes in actual values not shown in the accounting

records.

(3) Every shareholder shall be entitled to obtain, on request and

free of charge, full or, if so desired, partial copies of the documents

referred to in sub-article (1) and where a shareholder has consented

to the use by the company of electronic means for conveying

information, such copies may be provided in such manner.

(4) A company shall be exempt from the requirement to make

the documents referred to in sub-article (1) available at its

registered office if, for a continuous period beginning at least one

month before the day fixed for the general meeting which is to

decide on the draft terms of division and ending not earlier than the

conclusion of that meeting, it makes them available on its website.

(5) Sub-article (3) shall not apply if the website gives

shareholders the possibility, throughout the period referred to in

sub-article (4), of downloading and printing the documents referred

to in sub-article (1).

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 366 Non-applicability of certain provisions where shareholders involved in a division are in agreement. — COMPANIES ACT Open official source

The provisions of article 363, article 364(1) and (2) and

article 365(1)(c), (d) and (e) shall not apply if all the shareholders

of all the companies involved in a division have so agreed.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 367 Delivery of extraordinary resolutions relating to division to Registrar for registration. — COMPANIES ACT Open official source

The extraordinary resolution approving the division

passed by the company to be divided and the extraordinary

resolutions passed by the recipient companies together with the

instruments giving effect to the division, or an authentic copy

thereof, shall be delivered for registration to the Registrar who,

being satisfied that the requirements of the preceding provisions of

this Part have been complied with, shall register them.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 368 Rights of creditors to oppose division. — COMPANIES ACT Open official source

(1) The division shall not take effect until three months

from the date of the publication of the statement referred to in

article 401(1)(e) relating to the extraordinary resolutions approving

the division.

(2) During the aforesaid period of three months any creditor of

any of the companies involved in a division whose debt existed

prior to the publication of the statement referred to in article

401(1)(e), provided for pursuant to the registration required by

virtue of article 361(5) may, by sworn application, object to the

division, and if he shows good cause why it should not take effect,

the court shall either uphold the objection or allow the division on

sufficient security being given.

(3) In so far as a creditor of a company to which the obligation

or liability has been allocated in accordance with the draft terms of

division has not obtained satisfaction, the recipient companies shall

be jointly and severally liable for that obligation

Provided that as regards the recipient companies other than

the one to which the obligation or liability has been allocated, this

liability shall be limited to the net assets allocated to each of those

companies

Provided further that this sub-article shall not apply where

the operation involving the division is subject to the supervision of

the court in accordance with article 375 and a majority in number

representing three-fourths in value of the creditors of the company

to be divided have agreed to forego such joint and several liability

at a meeting held pursuant to article 375(2)(c).

(4) The provisions of sub-articles (1), (2) and (3) shall apply to

the debenture holders of the companies involved in a division so

long as the division has not already been approved by the debenture

holders, individually or by a special meeting of the debenture

holders called specifically for the purpose, at which meeting all the

debenture holders shall signify their consent.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 369 Protection of holders of securities in a division. — COMPANIES ACT Open official source

The holders of securities, other than shares, to which

special rights are attached, shall be given rights in the recipient

companies against which such securities may be invoked in

accordance with the draft terms of division, at least equivalent to

the rights they possessed in the company to be divided, unless -

(a) the holders of those securities individually agree to the

alteration of their rights; or

(b) the alteration has been approved by a meeting of the

holders of those securities called specifically for the

purpose at which meeting all the holders of such

securities shall signify their consent; or

(c) the holders of these securities are entitled to have their

securities repurchased.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 370 Duties of Registrar in respect of a division. — COMPANIES ACT Open official source

(1) Upon the division becoming effective either through

the lapse of the period referred to in article 368 or, where objection

is made under that article, by a decision of the court, the Registrar

shall strike the name of the company to be divided off the register

and issue a certificate of registration, altered to meet the

circumstances of the case and denoting the fact of the division, for

all the recipient companies, and where a division which has been

registered under this Part does not become effective pursuant to a

decision of the court under article 368, the Registrar shall amend

the registration accordingly.

(2) The Registrar shall, in respect of every company involved

in a division, either proceed to publish a notice of the division after

it has become effective or to publish a notice that the division has

not become effective pursuant to a decision of the court under

article 368 in both cases as specified in sub-article (1). The

publication shall be made in accordance with the provisions of

article 401(1)(e).

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 371 Consequences of division. — COMPANIES ACT Open official source

(1) A division shall have the following consequences

(a) the recipient companies shall succeed to all the assets,

rights, liabilities and obligations of the company to be

divided, both as between the company to be divided

and the recipient companies and as regards third

parties without the requirement of any formalities

other than those arising under this Part;

(b) the shareholders of the company to be divided shall

become shareholders of one or more of the recipient

companies; and

(c) the company to be divided shall cease to exist.

(2) No shares in a recipient company shall be exchanged for

shares held in the company to be divided either -

(a) by that recipient company; or

(b) by the company to be divided.

(3) The division shall not prejudice the rights enjoyed by the

creditors of the company to be divided over any of the assets of that

company.

(4) Where the assets of the company to be divided include

immovable property or rights relating thereto, the directors of the

recipient companies shall cause within one month from the coming

into force of the division, a declaratory public deed to be published,

c o n ta i ni n g a de t a i l e d de s c r i p t io n a n d t h e a ll o c a t io n of t h e

immovable property or rights relating thereto delivered to each of

the recipient companies, and a true copy of the said deed shall be

lodged with the Registrar within fourteen days from the enrolment

thereof at the Public Registry.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 372 Liability of director or expert for wilful or negligent misconduct. — COMPANIES ACT Open official source

Any person who -

(a) being a director of a company to be divided and who is

responsible for the preparation and the implementation

of the division, or

(b) being an expert who is responsible for drawing up on

behalf of the said company the report on the draft

terms of the division,

and who, as a consequence of his wilful or negligent misconduct in

the performance of his duties causes damages to any shareholder of

the company to be divided, shall be liable for such damages.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 373 Appeal from decisions of Registrar. — COMPANIES ACT Open official source

Any interested party may contest the registration made by

the Registrar, by virtue either of article 361 or of article 367 before

the court in accordance with the following conditions

(a) the contestation shall be made by application against

the Registrar within one month from the publication

following the registration referred to in article 361 on

the grounds that the draft terms of division were not

drawn up in accordance with the provisions of article

361, or within three months from the publication

following the registration referred to in article 367 on

the grounds that any of the resolutions of the

extraordinary general meetings mentioned therein was

void or voidable; notice of the application shall be

published by the Registrar;

(b) where it is possible to remedy a defect liable to render

a division void or voidable, the court shall grant the

companies involved a period within which to rectify

the situation;

(c) a notice that the judgment of the court has been

delivered shall be published by the Registrar, which

notice shall specify whether the application has been

allowed or dismissed;

(d) a judgment declaring a division void or voidable shall

not of itself affect the validity of obligations owed by

or in relation to the recipient companies which arose

before the judgment was delivered and after the date of

registration of the draft terms of division referred to in

article 361 or of the resolutions and the other

instruments referred to in article 367 according to the

case;

(e) each of the recipient companies shall be liable for its

obligations arising after the date on which the division

took effect and before the date on which the judgment

declaring the division void was delivered;

(f)

the company to be divided shall also be liable for the

obligations referred to in paragraph (e)

Provided that the extent of this liability shall be

limited to the share of the net assets delivered to the

recipient company on whose account such obligations

arose;

(g) the division shall not become operative until the lapse

of the three months referred to in paragraph (a) or, if

an application is filed, until the date of the final

judgment, if the application is refused; and

(h) upon the delivery of the judgement the Registrar shall,

where the application is allowed, amend the

registration accordingly as if the division procedure

had never commenced.

Chapter II - Division by the formation of new companies

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 374 Application of preceding articles of this Part to division by formation of new companies. — COMPANIES ACT Open official source

(1) The provisions of articles 361, 362(1) to (5), 363,

364(1) and (2) and articles 365 to 373 shall apply to division by the

formation of new companies, as though references to the companies

involved in a division were references only to the company to be

divided.

(2) In addition to the information specified in article 361(2), the

draft terms of division, which in the case of a division by formation

of new companies shall only be drawn up by the company to be

divided, shall indicate the status, name and registered office of each

of the new companies.

(3) The draft terms of division of the company to be divided

and, if they are contained in a separate document, the draft

memorandum and the draft articles of each of the new companies

shall be approved by an extraordinary resolution taken at a general

meeting of the company to be divided.

(4)

(Deleted by Act XX. 2013.93).

(5) Neither article 364 nor article 365, in so far as they relate to

the expert’s report, shall apply where the shares in each of the new

companies are allocated to the shareholders of the company to be

divided in proportion to their holding in the issued share capital of

that company.

(6) The Registrar shall, after striking the name of the company

to be divided off the register in accordance with the provisions of

article 370(1), proceed to issue a certificate of registration for each

on e o f t he ne w c o m p a n i e s f o r m e d , d e n o ti n g th e f a c t o f i t s

formation as a result of the division.

Chapter III - Division by a combination of a division by

acquisition with a division by the formation of one or more new

companies

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 374A Division by a combination of division by acquisition and division by formation of new companies. — COMPANIES ACT Open official source

(1) The provisions of articles 361, 362, 363, 364(1) and

(2) and articles 365 to 373 shall apply to division by combination

of a division by acquisition with a division by formation of one or

more new companies.

(2) In addition to the information specified in article 361(2),

the draft terms of division, shall also indicate the status, name and

registered office of the new company or companies.

(3) The draft terms of division and, if they are contained in a

separate document, the draft memorandum and the draft articles of

the new company or companies shall be approved by an

extraordinary resolution taken at a general meeting of the company

to be divided and of each existing recipient company.

(4) Neither article 364 nor article 365, in so far as they relate to

the written report drawn up by one or more experts shall apply in

respect of new companies where the shares in such companies are

allocated to the shareholders of the company to be divided in

proportion to their holding in the issued share capital of that

company.

(5) The Registrar shall, after striking the name of the company

to be divided off the register in accordance with the provisions of

article 370(1), proceed to issue a certificate of registration for each

on e o f t he ne w c o m p a n i e s f o r m e d , d e n o ti n g th e f a c t o f i t s

formation as a result of the division.

Chapter IV - Division under the supervision of the court

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 375 Application to court to supervise division and powers of the court in relation thereto. — COMPANIES ACT Open official source

(1) The company to be divided may apply to the court for

it to supervise the division.

(2)

The court shall as a result have the power -

(a) to call a general meeting of the shareholders of the

company to be divided in order to decide upon the

division by extraordinary resolution;

(b) to ensure that the shareholders of each of the

companies involved in the division have received or

can obtain at least the documents referred to in article

365 in time to examine them before the date of the

general meeting of their company called to decide

upon the division

Provided that if, by virtue of article 362(6), the

general meeting of any of the recipient companies is

not to be held, the court shall ensure that the

shareholders of the recipient companies shall have at

least one month within which to exercise the rights

conferred on them by that article

Provided further that the provisions of this

paragraph shall, with regard to division by the

formation of new companies, apply only to the

company being divided;

(c) to call any meeting of creditors of each of the

companies involved in the division in order to decide

upon the division;

(d) to ensure that the creditors of each of the companies

involved in the division have received or can obtain at

least the draft terms of division in time to examine

them before the date referred to in paragraph (b); and

(e) to approve the draft terms of division.

(3) Where the court establishes that the conditions referred to

in sub-article (2)(b) and (d) have been fulfilled and that no

prejudice would be caused to shareholders or creditors, it may -

(a) relieve the Registrar from the obligation relating to the

publication of the statement referred to in article

401(1)(e) required pursuant to the registration of the

draft terms of division in accordance with article

361(5);

(b) relieve the companies involved in the division from

applying the conditions referred to in article 362(6)(a)

and (b); and

(c) relieve the companies involved in the division from

applying the provisions of article 365, in so far as they

relate to the period and the manner prescribed for the

inspection of the documents referred to therein.

(4) The provisions of article 368(3) shall not apply to a

division under this Chapter where a majority in number

representing three-fourths in value of the creditors of the company

to be divided have agreed to forego such joint and several liability

as is referred to in article 368(3).

PART X - ASSOCIATION EN PARTICIPATION

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 376 Definition. — COMPANIES ACT Open official source

An association en participation is a contract whereby a

person assigns to another person, for a valuable consideration

contributed by the latter, a portion of the profits and losses of a

business or of one or more commercial transactions.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 377 Consent of associates required for admission of other associates. — COMPANIES ACT Open official source

Saving any agreement to the contrary, the associating

party may not have other associates in the same business or

transactions without the consent of his associates.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 378 Relations of parties vis-à-vis third parties and among themselves. — COMPANIES ACT Open official source

(1) In regard to third parties the ownership of, or other

rights over, a thing contributed by an associate shall vest in the

associating party.

(2) In the relations of the parties among themselves, saving any

agreement that a thing contributed is to be restored in kind, the

associate shall, on the termination of the association, be entitled to

the reimbursement of the value of his contribution.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 379 Only associating party acquires rights and assumes obligations. — COMPANIES ACT Open official source

A third party shall acquire rights and assume obligations

against and in favour only of the associating party.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 380 Rights of associating party and of associates. — COMPANIES ACT Open official source

The management of the business or of the transactions in

respect of which the association was formed shall vest only in the

associating party

Provided that the associate may, where it is so agreed and to

the extent agreed, supervise such business or transactions

Provided further that the associate shall, in all cases, be

entitled to an account of any transaction that is completed and,

where the association lasts for more than one year, to an annual

account of the management of the business or transactions in

respect of which the association was formed.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 381 Liability of associate. — COMPANIES ACT Open official source

Unless otherwise agreed, the associate shall bear the

losses in the same proportion in which he partakes in the profits,

and his liability shall be limited to his contribution.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 382 Agreements allowed between parties. — COMPANIES ACT Open official source

Saving the provisions of the preceding articles of this Part,

an association en participation may be formed in such manner, in

such proportions of interests and upon such conditions as may be

agreed upon by the parties.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 383 Formalities required for association en participation. — COMPANIES ACT Open official source

An association en participation shall be constituted by an

instrument in writing although any such association so constituted

shall not be subject to any other formalities prescribed in regard to

partnerships and it shall not have a legal personality distinct from

that of its members.

PART XI - BODIES CORPORATE CONSTITUTED OUTSIDE

MALTA

Chapter I - Provisions as to establishment of branch

or place of business in Malta

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 384 Application of articles 385 to 389. — COMPANIES ACT Open official source

Articles 385 to 389 shall apply to all companies, commercial

partnerships, as well as other legal organisations enjoying legal

personality which have characteristics similar to companies and

commercial partnerships constituted or incorporated outside Malta

(hereinafter in this Chapter and in Chapter III of this Part referred to as

"oversea companies") which establish a branch or place of business

within Malta.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 385 Documents, etc., to be delivered by oversea companies carrying on business in Malta. — COMPANIES ACT Open official source

(1) Oversea companies which, on or after the appointed

day, establish a branch or place of business within Malta shall,

within one month of the establishment of the place of business,

deliver to the Registrar for registration -

(a) an authentic copy of the charter, statutes or

memorandum and articles of the oversea company or

other instrument constituting or defining the

constitution of the oversea company, and, if the

instrument is not written in the English or Maltese

language, a translation thereof into either of such

languages, certified to be a correct translation in such

manner as may be prescribed;

(b) a list of the directors and company secretary, if any, or

of the persons vested with the administration of the

oversea company, where that company does not have

directors or a company secretary, and, in all cases, a

list of the persons vested with the representation of the

oversea company. Such lists shall include the

following particulars

(i)

in the case of an individual, his name, his usual

residential address, his nationality and his

business occupation; and

(ii) in the case of a body corporate, its registered or

corporate name and registered or principal

office;

(c) a return containing the following particulars

(i)

the name under which the branch or place of

business is carrying on its activities where

different from the name of the oversea company;

(ii) the address of the branch or place of business

established in Malta by the oversea company,

and where more than one branch or place of

business has been established, there shall be

indicated the address of the principal branch or

place of business;

(iii) the activities to be carried out by the branch or

place of business established in Malta;

(iv) the names and addresses of one or more

individuals resident in Malta authorised to

represent the oversea company for the activities

of the branch or place of business established in

Malta; and

(v) the extent of the authority of any individual

falling within sub-paragraph (iv), including

whether that individual is authorised to act alone

or jointly with others, and in the latter case, the

name of any person with whom he is authorised

to act;

(d) unless disclosed by the document specified in

paragraph (a), a return containing the following

particulars about the oversea company

(i) the legal form of the oversea company; and

(ii) the identity of the register in which the oversea

company is registered and the number with

which it is so registered.

(2) Oversea companies constituted or incorporated outside

Malta which, before the appointed day, have been duly registered

with the Registrar in accordance with the provisions of Part VIII of

the Ordinance, shall be deemed to be registered in accordance with

the provisions of this Part

Provided that oversea companies which have, before the

appointed day, established a branch or place of business within

Malta and continue to have an established branch or place of

business within Malta on the appointed day, shall comply with the

provisions of this Part and in particular shall deliver to the

Registrar for registration the documents and particulars specified

under sub-article (1)(a), (b) and (c) within six months of the

appointed day, unless they have already registered such documents

and particulars under the Ordinance.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 386 Return to be delivered by oversea company where documents, etc., altered. — COMPANIES ACT Open official source

If any alteration is made in -

(a) the charter, statutes or memorandum and articles of an

oversea company or any such instrument as aforesaid;

or

(b) the directors or company secretary or the persons

vested with the administration or the representation of

an oversea company, or in the particulars specified

under article 385(1)(b); or

(c) the names or addresses of the individuals authorised to

represent an oversea company for the activities of the

branch or place of business established in Malta,

the company shall, within one month of any such alteration, deliver

to the Registrar for registration a return containing the particulars

of the alteration, signed by a director, the company secretary or

other authorised officer of the company.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 387 Accounts of oversea company. — COMPANIES ACT Open official source

(1) Every oversea company shall, within within twelve

months from the end of every accounting period, make out and

deliver to the Registrar for registration a balance sheet, a profit and

loss account and the notes to the accounts in such form, and

containing such particulars and including such documents as, under

the provisions of this Act, the directors would, if the company had

been a company formed and registered under this Act, be required

to make out and lay before the company in general meeting

Provided that the Registrar may accept for registration a

balance sheet, profit and loss account and the notes to the accounts

prepared in the form required under the law of the place of the

company’s constitution or incorporation if, in his opinion, or if as

prescribed, such accounts give substantially the same information

as, or greater information than, that required to be given in the

accounts referred to in article 167.

(2) Notwithstanding that the balance sheet, profit and loss

account and the notes to the accounts prepared in the form required

under the law of the place of the company’s constitution or

incorporation do not give substantially as much information as that

required in the accounts referred to in article 167, the Registrar

may, in his absolute discretion, nevertheless agree to accept such

accounts for registration in compliance with sub-article (1); but in

that event, subject as provided by sub-article (4), the company shall

also deliver to the Registrar for registration -

(a) a profit and loss account made out as nearly as may be

in the form and containing the particulars required by

the provisions of Chapter X of Title I of Part V and

generally accepted accounting principles and practice

governing the profit and loss account of companies

formed and registered in Malta and giving a true and

fair view of the profit and loss, during the period to

which it relates, on the company’s operations in Malta

as if such operations had been conducted by a separate

company formed and registered in Malta under this

Act;

(b) a statement, as at the end of the period to which the

profit and loss account referred to in paragraph (a)

relates, showing the company’s assets locally situated

in Malta classified, distinguished and valued in

accordance with the provisions governing the accounts

of companies formed and registered in Malta

contained in Chapter X of Title I of Part V and

generally accepted accounting principles and practice,

and the nature and amount of the specific charges on

such assets; and

(c) the notes to the accounts giving additional information

to that given in the profit and loss account and in the

balance sheet referred to in paragraphs (a) and (b)

relating to the company’s operations in Malta and the

assets locally situated in Malta, drawn up in

accordance with the provisions of Chapter X of Title I

of Part V and generally accepted accounting principles

and practice governing the notes to the accounts of

companies formed and registered in Malta; and

(d) a report on the account and statement referred to in the

foregoing paragraphs of this sub-article by an auditor

qualified in accordance with article 153 stating that in

his opinion and to the best of his information the

accounts and statements are in accordance with the

accounting records of the company and give the

information required by this Act in the manner therein

required and give a true and fair view of the matters

therein stated

Provided that the provisions of this sub-article shall not

apply to any company which has at any time made in Malta any

invitation to the public to acquire any of its shares or debentures or

to deposit money with it.

(3) In the profit and loss account referred to in sub-article

(2)(a), the company may make such apportionments and add such

explanations as shall, in its opinion, be necessary or desirable in

order to give a true and fair view of the profit or loss of its

operations in Malta and for this purpose may debit a reasonable rate

of interest on capital employed in Malta.

(4) Notwithstanding that the Registrar agrees to accept a

balance sheet, profit and loss account and the notes to the accounts

under sub-article (2) he may waive compliance with paragraphs (a),

(b), (c) and (d) of that sub-article or any of such paragraphs if

satisfied that compliance therewith is impracticable having regard

to the nature of the company’s operations in Malta.

(5) If any such document as is mentioned in sub-articles (1) to

(4) is not written in the Maltese or English language there shall be

annexed to it a translation thereof into either of such languages,

certified to be a correct translation in such manner as may be

prescribed.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 388 Other obligations of oversea company. — COMPANIES ACT Open official source

(Deleted by Act V. 2020.25)

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 389 Penalties. — COMPANIES ACT Open official source

If an oversea company fails to comply with any of the

foregoing provisions of this Part, any officer or agent of the

company who is in default shall be liable to a penalty, and, in the

case of a continuing default, to a further penalty for every day

during which the default continues.

Chapter II - Issues by companies constituted or incorporated or

to be constituted or incorporated outside Malta

in a non-Member State or non-EEA State

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 390 Application of articles 391 to 399. — COMPANIES ACT Open official source

(Deleted by Act V. 2020.35)

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 391 Prospectus of oversea company. — COMPANIES ACT Open official source

(Deleted by Act V. 2020.35)

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 392 Attempted evasion of article 391 to be void. — COMPANIES ACT Open official source

(Deleted by Act V. 2020.35)

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 393 Prospectus containing statement by expert. — COMPANIES ACT Open official source

(Deleted by Act V. 2020.35)

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 394 Restrictions on allotment to be secured in prospectus. — COMPANIES ACT Open official source

(Deleted by Act V. 2020.35)

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 395 Certificate exempting from compliance with Part B of the Second Schedule. — COMPANIES ACT Open official source

(1) (Deleted by Act V. 2020.35)

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 396 Registration of oversea prospectus before issue. — COMPANIES ACT Open official source

(Deleted by Act V. 2020.35)

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 397 Consequences of non-compliance with articles 391 to — COMPANIES ACT Open official source

(Deleted by Act V. 2020.35)

396.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 398 Supplementary. — COMPANIES ACT Open official source

(Deleted by Act V. 2020.35)

Chapter III - Provisions as to the winding up of the affairs in

Malta of an oversea company

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 399 Affairs in Malta of an oversea company may be wound up by the court. — COMPANIES ACT Open official source

(1) The court may wind up the affairs in Malta of an

oversea company constituted or incorporated outside Malta in any

of the cases mentioned in article 214 in which it may dissolve and

wind up a company formed and registered in Malta.

(2) The court may exercise its power under sub-article (1)

irrespective of whether the oversea company is being or has been

wound up or has otherwise been dissolved or ceased to exist as a

company under the law of its constitution or incorporation.

(3) For the purposes of this article, every person, who is liable

to pay or contribute to the payment of any debt or liability of the

oversea company, or to pay or contribute to the payment of any sum

for the adjustment of the rights of members among themselves, or

to pay or contribute to the payment of the expenses of the winding

up of the company, shall be deemed to be a contributory.

(4) Every contributory shall be liable to contribute to the

oversea company’s assets all sums due from him in respect of such

liability as is mentioned in sub-article (3).

(5) Subject to the provisions of sub-articles (1) to (4), the

winding up of the oversea company’s affairs in Malta shall be

carried out by applying the provisions of Title II of Part V of this

Act, with such modifications as are necessary to accommodate the

fact that the oversea company, the affairs of which are being wound

up, is a company constituted or incorporated outside Malta.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 399A Closure by oversea company of its branch or place of business in Malta. — COMPANIES ACT Open official source

(1) (a) An oversea company shall within one month of

the closure of its branch or place of business in Malta

deliver a notice to the Registrar for registration

notifying him of such closure.

(b) Where an oversea company, constituted or

incorporated outside Malta, which has established a

branch or place of business within Malta, has been

dissolved or for any other reason is being wound up, it

shall, within one month from the date of the

dissolution or the date on which the winding-up

begins, deliver to the Registrar for registration a return

in the prescribed form containing the following

particulars

(i)

a brief description of the winding-up or other

proceedings to which the oversea company has

become subject to, specifying whether such

proceedings amount to insolvency proceedings,

or an arrangement or composition, or any

analogous proceedings;

(ii) whether the oversea company has been dissolved

or is being wound up by an order of a court;

(iii) if the company is not being so dissolved or

wound up, as a result of what action the

dissolution or winding-up has commenced;

(iv) whether the dissolution or winding up has been

instigated by

(a) the oversea company’s members;

(b) the oversea company’s creditors; or

(c) some other person or persons; and

(v) the date on which the dissolution or winding-up

became or will become effective.

(c) If an oversea company fails to comply with the

provisions of this sub-article, the liquidator or any

officer or agent of the company, as the case may be,

who is in default shall be liable to a penalty and, in the

case of a continuing default, to a further penalty for

every day during which the default continues.

(2)

(a) A person appointed to be the liquidator of the oversea

company shall, within one month from the date of his

appointment, deliver to the Registrar for registration a

return in the prescribed form containing the following

particulars

(i)

his name, his residential address and his

business or professional occupation;

(ii) the date of his appointment; and

(iii) a description of his powers together with an

explanation of the extent to which these powers

are derived otherwise than from the general law

or the company’s constitution.

(b) The liquidator of the oversea company shall, within

one month from the termination of the winding up of

the oversea company, deliver to the Registrar for

registration, a return in the prescribed form notifying

him of such termination.

(c) If the liquidator fails to comply with any of the

requirements of paragraphs (a) and (b) he shall be

liable to a penalty and, for every day during which the

default continues, to a further penalty.

PART XII - GENERAL

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 400 Power of Minister to appoint Registrar. — COMPANIES ACT Open official source

(1) The Minister shall appoint a senior official of the

Agency to be Registrar of Companies and other Commercial

Partnerships, who shall be designated "Registrar of Companies",

and may appoint persons to assist such Registrar, conferring on any

such persons all or any of the powers of the Registrar under this

Act or any other law.

(2) Without prejudice to the provisions of sub-article (1), the

Registrar may authorise in writing any person serving with the

office of the Registrar to perform any of the functions assigned to

the Registrar under this Act or any other law.

(3) Notwithstanding anything to the contrary contained in this Act

or any other law, the Registrar and any other person authorised in

accordance with sub-article (2), shall be exempt from any personal

liability whatsoever, including any liability in damages for anything

done or omitted to be done in the discharge or purported discharge of

any of his functions under this Act or under any other law, or otherwise

in the exercise of his official duties, unless the act or omission is

proved to have been done or omitted to be done, as the case may be, in

bad faith.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 401 Additional duties of Registrar. — COMPANIES ACT Open official source

(1) In addition to the other duties prescribed by this Act,

it shall be the duty of the Registrar -

(a) to ensure compliance with any provision of this Act

requiring an act to be done or to be omitted to be done

whether under a penalty or not; and to consult the

official receiver where such action relates to matters

falling within Title II of Part V of this Act;

(b) to recover penalties due under this Act in accordance

with the provisions of sub-articles (3) to (17);

(c) to exercise any powers of investigation conferred upon

him by this Act and any other subsidiary legislation,

including but not limited to on-site investigations to

verify that the registered office address of the commercial

partnership is truly existent and valid;

(d) (i) to retain and register any document which is

required to be delivered or given to or served on

him for registration under any of the provisions

of this Act and any such delivery, submission or

service to the Registrar and the retention and

registration of any document by the Registrar,

may be carried out in such manner and by such

means and in such format, including electronic

communication within the meaning of the

Electronic Commerce Act, as the Registrar may

deem appropriate

Provided that any such document shall be drawn

up in any one of the official languages of Malta;

(ii) to retain, in addition to any document which is

required to be delivered or given to or served on

him as indicated in sub-paragraph (i), a

translation of any such document which may

voluntarily be delivered or given to or served on

him, and provided it is a certified translation into

one of the official languages of the Community.

In case of conflict between any document

delivered in accordance with the provisions of

sub-paragraph (i) and any translation delivered

voluntarily in accordance with this sub-

paragraph, the translation may not be relied

upon against third parties. Third parties may

nevertheless rely on the translation voluntarily

delivered, unless the company proves that the

third parties had knowledge of the version which

was required to be delivered or submitted or

served to the Registrar;

(e) where under any of the provisions of this Act -

(i)

any document is required to be delivered or

given to or served on him for registration; or

(ii)

any certificate is issued by him on the

registration or change of name or conversion or

amalgamation or division of a commercial

partnership, or the name of a commercial

partnership is struck off the register,

to cause without delay, normally within twenty one

days from receipt of the complete documentation

including any legality checks as may be required for

entry in the register, a statement to be published in the

Gazette or on a website maintained by the Registrar

showing the date at which the registration, delivery or

service was made, or at which the certificate was

issued or at which the name of the commercial

partnership was struck off the register, and the general

nature of the document or certificate, and giving such

particulars as are necessary to distinguish the

commercial partnership to which the statement related

Provided that the twenty one day period referred to in

this sub-paragraph shall not apply to annual accounts

delivered to the Registrar for registration in

accordance with this Act

Provided further that the Registrar shall additionally

be required to publish without delay in a daily

newspaper circulating wholly or mainly in Malta a

notice showing substantially the same information

contained in the statement published in the Gazette or

on a website maintained by the Registrar, consequent

to the registration referred to in the following articles

of this Act

Sub-article (2) of article 19;

Sub-article (1) of article 36;

Sub-article (3) of article 88;

Sub-article (6) of article 88;

Sub-article (8) of article 88;

Sub-article (1) of article 224;

Sub-article (1) of article 265;

Sub-article (5) of article 320;

Sub-article (1) of article 331;

Sub-article (1) of article 338;

Article 350;

Paragraph (a) of sub-article (3) of article 358;

Paragraph (a) of sub-article (1) of article 359;

Article 367; and

Sub-article (4) of article 428.

In the event of any appointment of a person as a

partner or an assignment of a partner’s interest as are

referred to in article 19, or of any reduction or dissolution

as are referred to in article 21, or of any reduction

referred to in article 83, the Registrar shall proceed

with the publication of a statement in the Gazette or on

a website maintained by the Registrar and in a daily

newspaper in accordance with the requirements of this

paragraph.

The publication of the notice referred to in this

proviso shall be subject to the following provisions

(i)

The publication of the notice shall be made by

the Registrar at the expense of the commercial

partnership concerned, with the exception of the

publication of a disqualification order made in

accordance with article 320, in which case the

publication shall be made at the expense of the

person disqualified;

(ii)

A commercial partnership, liable for the expense

of the publication of a notice in accordance with

this proviso, shall effect payment without delay,

and in the event that such commercial

partnership is or has been dissolved, the

Registrar shall, in regard to the said expense,

enjoy the same preferential ranking as expenses

properly incurred by a liquidator in accordance

with this Act;

(iii)

The expense incurred by the Registrar in

publishing a notice pursuant to this proviso shall

be notified in writing to the commercial

partnership or person liable for the expense in

accordance with this proviso. Such notification

shall be deemed equivalent to a notice given in

terms of sub-article (3), and the expense incurred

by the Registrar shall, in so far as applicable, be

considered equivalent to a penalty referred to in

the same sub-article. The provisions of sub-

articles (3) to (17) shall mutatis mutandis apply

to such expense;

(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;

(g) to deliver to the Director of the Public Registry for

registration at the Public Registry Office a notice

containing the particulars of any conversion,

amalgamation or division which has taken effect in

accordance with Parts VII, VIII and IX respectively of

this Act, or of the striking off of the name of a

company, under the provisions of article 325. Such

notice shall show substantially the same particulars as

the statement published in the Gazette or on a website

maintained by the Registrar pursuant to the proviso to

paragraph (e); and it shall be the duty of the Director

of the Public Registry to register the notice or a note

thereof in like manner as notes of reference, in so far

as applicable, as the Director may consider

appropriate;

(h) when processing personal data to do so in accordance

with Directive 95/46/EC of the European Parliament

and of the Council of 24th October 1995 on the

protection of individuals with regard to the processing

of personal data and on the free movement of such

data;

(i)

to exercise the functions of Registrar for other legal

persons as listed and specified in the Second Schedule of

the Civil Code and the subsidiary legislation made as

authorised by the said Second Schedule;

(j)

before registering a new company or return, to take such

steps and require such information or documentation as it

may be deemed necessary to ascertain the individuals’

identification and correctness of the information

submitted to him;

(k) to provide competent authorities and subject persons,

as defined in the Prevention of Money Laundering and

Funding of Terrorism Regulations, with full access to

the website maintained by the Registrar, including, but

not limited to, access by an application programming

interface;

(l)

to deal with any aspect of online formation of

companies, online registration of branches and online

filing of documents and information;

(m) to issue, if he so deems fit, procedures and guidance,

after consultation with the Minister, to companies and,

or their officers as may be required for the carrying

into effect of the provisions of this Act and any

subsidiary legislation made thereunder, and which shall

be binding on companies and their officers;

(n) to carry out on-site inspections on commercial

partnerships to verify that the shareholders and, or

beneficial owners are those disclosed to the Registrar;

(o) to establish, administer and maintain a central data

repository;

(p) to establish, administer and maintain a register of

foreign body corporates and undertakings having a

significant business activity in Malta; and

(q) to establish, administer and maintain any other register,

and matters ancillary or incidental thereto, which may be

required from time to time, after consultation with the

Minister.

(2) Any document, certificate, or other particular required to be

delivered, given to or served on the Registrar for registration may

be relied on by the commercial partnership as against third parties

only after it has been duly published in accordance with sub-article

(1)(e), unless the commercial partnership proves that third parties

had knowledge thereof in which case the commercial partnership

may rely on any such document, certificate or other particular

no twithstandin g that i t has not yet been so published. Any

transactions taking place before the sixteenth day following the

publication of any such document, certificate or other particular

shall not be relied on as against third parties who prove that it was

not possible for them to have had knowledge thereof

Provided that at any time third parties may always rely on

any such document, certificate or other particular, even if the

publication formalities in relation thereto have not at that time been

complied with

Provided further that where this Act requires that any

provision shall not take effect until the lapse of a particular period,

the provisions of this sub-article shall only come into effect on the

lapse of the later period.

The Registrar shall make available on a website maintained

by him up to date information explaining the provisions of this

article according to which third parties can rely on documents and

particulars which are registered in terms of any of the provisions of

this Act, or any other Act requiring such registration. Such

information shall also be made available by the Registrar on the

European e-Justice portal in accordance with the portal’s rules and

technical requirements as stipulated in Article 3a(2) of Directive

2009/101/EC.

(3) Where the Registrar gives notice in writing to any person

that such person has become liable to a penalty under this Act

specifying the nature of the infringement, and indicating an amount

as due by way of penalty in respect of such infringement, the

person to whom the notice is given shall, without prejudice to the

provisions of sub-articles (4) to (17), be deemed to have incurred a

penalty under this Act, and the amount indicated as aforesaid as

due by way of penalty including any penalty due for each day

during which the default continues shall be deemed to be the

penalty due under this Act in respect of the infringement specified

in the notice.

(4) A notice as is referred to in sub-article (3) shall, upon the

service of a copy thereof by means of a judicif329al act on the

person indicated in the notice, 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 unless such person shall

within thirty days from the date of such service institute

proceedings before the court objecting to the penalty so fixed.

(5) Where any person desires to institute proceedings objecting

to a penalty referred to in sub-article (3), such proceedings shall be

instituted by application against the Registrar.

(6) The application shall, under pain of nullity, state clearly

and concisely the nature of the complaint, the facts out of which the

complaint arises, the reasons why such complaint should be upheld,

and the claim that the penalty is not due at law or is due at law only

in a smaller amount.

(7) The court shall not annul or reduce a penalty as aforesaid

unless such penalty cannot at law be imposed in the circumstances

of the case, or cannot at law be fixed in the amount fixed by the

Registrar.

(8) The applicant shall attach to the application all such

documents in support of his claim as it may be in his power to

produce, and shall indicate in his application the names of all

witnesses he intends to produce stating, in respect of each, the

proof which he intends to make.

(9) The court shall, without delay, set down the application for

hearing at an early date, which date shall in no case be later than

thirty days from the date of the filing of the application.

(10) The application, and the notice of the date fixed for

hearing, shall be served on the Registrar without delay, and the said

Registrar shall file his reply thereto within fourteen days after the

date of the service of the application.

(11) The Registrar shall, in his reply, state clearly and concisely

whether he agrees to the facts set out in the application, and the

reasons why he objects to the claim; he shall moreover state in his

reply the names of the witnesses in support of his reasons and shall

attach thereto all the documents in support thereof.

(12) On the day fixed for the hearing of the application, the

court shall consider only the issues of fact and of law as are

ascertainable from the application, reply or documents filed, by

either of the parties, or from the evidence indicated by either of the

parties in the application or reply, as the case may be, or from the

oral pleading of either of the parties.

(13) The court shall hear the application to a conclusion within

five working days from the date fixed for the original hearing of the

application, and no adjournment shall be granted except either with

the consent of both parties, or for an exceptional reason to be

recorded by the court, and such adjourned date shall not be later

than that justified by any such reason.

(14) Saving the preceding provisions of this article, the

provisions of the Code of Organization and Civil Procedure

relating to proceedings before the First Hall of the Civil Court shall

apply in relation to any such application.

(15) Notwithstanding the provisions of article 256(2) of the Code

of Organization and Civil Procedure, the executive title referred to

in sub-article (4) shall not be enforceable before the lapse of thirty

days from the service of the judicial act therein referred to.

(16) The decision of the court upon an application referred to in

sub-article (5), confirming the imposition of a penalty fixed by the

Registrar or reducing any such penalty, shall upon becoming res

judicata be deemed to be a judgment of the court ordering the

payment by the applicant of the penalty as confirmed or reduced.

(17) An appeal from a decision of the court upon an application

referred to in sub-article (5), shall be made by means of an

application to the Court of Appeal to be filed within six working

days of the date of the decision; the person against whom the

appeal is entered shall within six working days from the service

upon him of the application file a reply to the appeal.

(18) Where the Registrar, in his capacity of a data controller,

processes personal data for the purposes of this Act, he shall comply

with the principles relating to the processing of personal data pursuant

to Article 5 of Regulation (EU) 2016/679 of the European Parliament

and of the Council of 27 April 2016 on the protection of natural

persons with regard to the processing of personal data and on the free

movement of such data, and repealing Directive 95/46/EC (General

Data Protection Regulation), and apply appropriate technical and

organisational measures to ensure a level of security appropriate to the

risk posed, and to integrate the necessary safeguards into the

processing, in order to protect the rights and freedoms of data subjects.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 402 Protection of shareholders against unfair prejudice. — COMPANIES ACT Open official source

(1) Any member of a company who complains that the

affairs of the company have been or are being or are likely to be

conducted in a manner that is, or that any act or omission of the

company have been or are or are likely to be, oppressive, unfairly

discriminatory against, or unfairly prejudicial, to a member or

members or in a manner that is contrary to the interests of the

members as a whole, may make an application to the court for an

order under this article.

(2) Where the Registrar has received a report on a company

under article 410 and it appears to him that the company’s affairs

are being or have been conducted in a manner falling within the

meaning of sub-article (1), he may make an application to the court

for the issue of an order under this article.

(3) If on an application made in terms of sub-article (1) or (2),

the court is of the opinion that the complaint is well-founded and

that it is just and equitable to do so, the court may make such order

under such terms as it thinks fit -

(a) regulating the conduct of the company’s affairs in the

future; or

(b) restricting or forbidding the carrying out of any

proposed act; or

(c) requiring the company to do an act which the applicant

has complained it has omitted to do; or

(d) providing for the purchase of the shares of any

members of the company by other members of the

company or by the company itself and, in the case of a

purchase by the company, for the reduction

accordingly of the company’s issued share capital; or

(e) directing the company to institute, defend, continue or

discontinue court proceedings, or authorising a

member or members of the company to institute,

defend, continue or discontinue court proceedings in

the name and on behalf of the company; or

(f)

providing for the payment of compensation by such

person as may have been found by the court

responsible for loss or damage suffered as a result of

the act or omission complained of, to the person

suffering the said loss or damage; or

(g) dissolving the company

and

providing

for

its

consequential winding up.

(4) When an order is made for the dissolution of a company in

terms of sub-article (3)(g), the company shall be deemed to have

been dissolved on the date when the order is made and the

provisions of Sub-Titles I and III of Title II of Part V of this Act

regulating the winding up of companies shall apply.

(5) An order made under this article may require a company not

to make any amendment, or to make such amendment as may be

required, in its memorandum or articles.

(6) In this article, the term "member" includes a person entitled

at law to represent the interests of a deceased member, a person to

whom shares in the company have lawfully devolved by way of

testate or intestate succession, and a trustee, as defined in article

127, who holds shares in the company.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 403 Investigation of commercial partnerships and oversea companies. — COMPANIES ACT Open official source

(1) The provisions of articles 404 to 413 and of articles

418 to 423 which regulate the investigation of the affairs of

companies, shall also apply to other commercial partnerships as

though references to "companies" include references to

"commercial partnerships", references to "shares" and to "issued

share capital" include references to " interests in the partnership",

and references to "directors" include references to "partners other

than limited partners."

(2) The provisions of articles 405 to 410, 412, 413 and 423(1)

shall apply to all bodies corporate constituted or incorporated

outside Malta which are carrying on business in or have at any time

carried on business in Malta, as if they were companies under this

Act, but subject to any adaptations and modifications as may be

prescribed.

(3) Where the Registrar appoints one or more inspectors for

any of the purposes specified in the following articles of this Part,

such inspectors shall produce their letter of authority when so

required in the exercise of their powers.

(4) Where any of the powers arising in terms of this article or

in terms of articles 404 to 407, 410, 411, 414 and 416 to 419 are

exercised or are to be exercised in respect of a company which is

licensed or supervised by a competent authority as defined in article

420(3), such powers shall be exercised after consultation with the

relevant competent authority.

(5) An inspector appointed under this Part shall be a person

selected by the Registrar from a list, approved by the Minister from

time to time, of persons deemed competent to act as inspectors

under this Part.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 404 Investigation of a company on its own application or that of its members. — COMPANIES ACT Open official source

(1) The Registrar may by letter of authority appoint one

or more inspectors to investigate the affairs of a company and to

report thereon in such manner as he may direct.

(2) The appointment may be made at the request of at least two

hundred members or of members holding at least one-tenth of the

issued share capital, or at the request of the company.

(3) The request shall be supported by such evidence as the

Registrar may require for the purpose of showing that the person or

persons making the request have good reason for requiring the

investigation.

(4)

The Registrar may, before appointing inspectors, require

the person or persons making the request to give such security as he

may require for payment of the expenses of the investigation.

(5) The Registrar may exercise the powers conferred by this

article with respect to a company notwithstanding that it is in the

course of being wound up voluntarily.

(6) The Registrar shall exercise the powers conferred by this

article where it appears to him that it is expedient and in the public

interest to do so.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 405 Other company investigations. — COMPANIES ACT Open official source

(1) Where the court, in the course of proceedings before

it under this Act, by order declares that the affairs of a company are

to be investigated, the Registrar shall by letter of authority appoint

one or more inspectors to investigate the affairs of that company

and to report thereon in such manner as he directs.

(2) The court shall make an order as specified in sub-article (1)

if it appears to it that there are circumstances suggesting -

(a) that the company’s affairs are being or have been

conducted with intent to defraud its creditors or

otherwise for a fraudulent or unlawful purpose, or in a

manner which is unfairly prejudicial to some part of its

members; or

(b) that any actual or proposed act or omission of the

company is or would be so prejudicial, or that the

company was formed for any fraudulent or unlawful

purpose; or

(c) that persons concerned with the company’s formation

or the management of its affairs have in connection

therewith been guilty of fraud or other misconduct

towards it or towards its members; or

(d) that the company’s members have not been given all

the information with respect to its affairs which they

might reasonably expect.

(3) The provisions of sub-articles (1) and (2) shall apply

without prejudice to the powers of the Registrar under article 404.

(4) The power conferred by sub-article (2) shall be exercisable

with respect to a company notwithstanding that it is in the course of

being wound up voluntarily.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 406 Inspectors’ powers during investigation. — COMPANIES ACT Open official source

(1) If inspectors appointed under article 404 or article

405 to investigate the affairs of a company think it necessary for

the purposes of their investigation to investigate also the affairs of

another body corporate which is or at any relevant time has been

the company’s subsidiary or parent company, or a subsidiary of its

parent company or a parent company of its subsidiary, they shall

have power to do so; and they shall report on the affairs of the other

body corporate so far as they think that the results of their

investigation of its affairs are relevant to the investigation of the

affairs of the first mentioned company.

(2) Inspectors appointed under article 404 or article 405 may at

any time in the course of their investigation, without the necessity

of making an interim report, inform the Registrar of matters coming

to their knowledge as a result of the investigation tending to show

the existence of a default or the commission of an offence.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 407 Production of documents and evidence to inspectors. — COMPANIES ACT Open official source

(1) When inspectors are appointed under article 404 or

article 405, it shall be the duty of all officers and agents of the

company, and of all officers and agents of any other body corporate

whose affairs are investigated under article 406(1) -

(a) to produce to the inspectors all accounts, accounting

records and documents of or relating to the company

or, as the case may be, the other body corporate which

are in their custody or power, when required to do so;

(b) to attend before the inspectors when required to do so;

and

(c) otherwise to give the inspectors all assistance in

connection with the investigation which they are

reasonably able to give.

(2) If the inspectors consider that a person other than an officer

or agent of the company or other body corporate is or may be in

possession of information concerning its affairs, they may require

that person to produce to them any accounts, accounting records or

documents in his custody or power relating to the company or other

body corporate, to attend before them and otherwise to give them

all assistance in connection with the investigation which he is

reasonably able to give, and it shall be the duty of that person to

comply with that requirement.

(3) An inspector may examine on oath the officers and agents

of the company or other body corporate, and any such person as is

mentioned in sub-article (2), in relation to the affairs of the

company or other body corporate, and may administer an oath

accordingly.

(4) In this article a reference to officers or to agents includes

past, as well as present, officers or agents, as the case may be; and

"agents", in relation to a company or other body corporate, includes

its bankers and persons appointed by it as auditors, whether these

persons are or are not officers of the company or other body

corporate.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 408 Power of inspector to call for directors’ bank accounts. — COMPANIES ACT Open official source

If an inspector has reasonable grounds for believing that a

director, or past director, of the company or other body corporate as

referred to in article 406(1) whose affairs he is investigating

maintains or has maintained a bank account of any description,

whether alone or jointly with another person and whether in Malta

or elsewhere, into or out of which there has been paid -

(a) the emoluments or part of the emoluments of his office

as director as aforesaid, whether or not disclosed in the

accounting records of the company; or

(b) any money which has resulted from or been used in the

financing of an undisclosed transaction, arrangement

or agreement; or

(c) any money which has been in any way connected with

an act or omission, or series of acts or omissions which

on the part of that director constituted misconduct,

whether fraudulent or not, towards the company or

body corporate or its members,

the inspector may require the director to produce to him all

documents in the director’s possession, or under his control,

relating to that bank account.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 409 Obstruction of inspectors during investigation of company’s affairs. — COMPANIES ACT Open official source

If any person referred to in article 407 -

(a) refuses to produce any book or document which it is

his duty under article 407 or article 408 to produce to

the inspectors; or

(b) refuses to attend before the inspectors when required

to do so; or

(c) refuses to answer any question put to him by the

inspectors with respect to the affairs of the company or

other body corporate, as referred to in article 406(1),

as the case may be,

he shall be guilty of an offence and liable on conviction to a fine

(multa) of not more than four thousand and six hundred and fifty-eight

euro (€4,658), or to imprisonment for a term not exceeding six months,

or to both such fine (multa) and imprisonment.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 410 Inspectors’ reports. — COMPANIES ACT Open official source

(1) The inspectors shall make interim reports to the

Registrar and on the conclusion of their investigation shall make a

final report to him.

(2) If the inspectors were appointed under article 405 in

pursuance of an order of the court, the Registrar shall furnish a

copy of all their reports to the court.

(3)

The Registrar may, if he thinks fit -

(a) forward a copy of any report made by the inspectors to

the company’s registered office;

(b) furnish a copy on request and on payment of the

prescribed fee to -

(i)

any member of the company or other body

corporate which is the subject of the report;

(ii)

any person whose conduct is referred to in the

report;

(iii)

the auditors of that company or body corporate;

(iv)

the applicants for the investigation;

(v)

any other person whose financial interests

appear to the Registrar to be affected by the

matters dealt with in the report, whether as a

creditor of the company or body corporate, or

otherwise; and

(c) cause any such report to be published.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 411 Power to bring civil proceedings on company’s behalf. — COMPANIES ACT Open official source

(1) If, from any report made under article 410 or from

information or documents obtained under article 418 or article 419,

it appears to the Registrar that any civil proceedings ought in the

public interest to be brought by any body corporate, he may himself

with the consent of the Attorney General bring such proceedings in

the name and on behalf of that body corporate.

(2) The Registrar shall indemnify the body corporate against

any costs or expenses incurred by it in or in connection with

proceedings brought under this article.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 412 Expenses of investigating a company’s affairs. — COMPANIES ACT Open official source

(1) The expenses of and incidental to an investigation by

inspectors appointed by the Registrar shall be defrayed by him;

provided that the persons mentioned in sub-articles (2) to (5) shall

be, to the extent there specified, liable to make repayment to the

Registrar.

(2) A person who is convicted on a prosecution instituted as a

result of the investigation, or is ordered to pay the whole or any

part of the costs of proceedings brought under article 411 may in

the same proceedings be ordered to pay those expenses to such

extent as may be specified in the order.

(3) A body corporate in whose name proceedings are brought

under article 411 shall be liable to the amount or value of any sums

or assets recovered by it as a result of those proceedings; and any

amount for which a body corporate is liable under this sub-article

shall be paid, in priority to all other claims, from the sums or assets

recovered.

(4) A body corporate dealt with by the inspectors’ report shall

be liable for the expenses of and incidental to the investigation

unless that body corporate was the applicant for the investigation,

and unless the Registrar otherwise directs.

(5) The applicant or applicants for the investigation, where the

inspectors were appointed under article 404, shall be liable to such

extent, if any, as the Registrar may direct.

(6) The report of the inspectors may include a recommendation

as to the directions which they think appropriate, in the light of

their investigation, to be given under sub-article (4) or sub-article

(5).

(7) For the purposes of this article, any costs or expenses

incurred by the Registrar in or in connection with proceedings

brought under article 411 are to be treated as expenses of the

investigation giving rise to the proceedings.

(8) Any liability to repay the Registrar arising from sub-

articles (2) and (3) shall, subject to satisfaction of the right of the

Registrar to repayment, be a liability also to indemnify all persons

against liability under sub-articles (4) and (5); and any such

liability imposed by sub-article (2) shall, subject as mentioned

above, be a liability also to indemnify all persons against liability

under sub-article (3).

(9) A person liable under any one of the sub-articles referred to

in sub-article (8) is entitled to contribution from any other person

liable by virtue of the same sub-article, according to the amount of

their respective liabilities by virtue of that sub-article.

(10) Expenses to be defrayed by the Registrar under this article

shall, insofar as not recovered by virtue of its provisions, be paid

out of public funds.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 413 Inspectors’ report to be admissible as evidence. — COMPANIES ACT Open official source

A copy of any report of inspectors appointed under article

404 or article 405 certified by the Registrar to be a true copy, shall

be admissible in any legal proceedings as evidence of the opinion

of the inspectors in relation to any matter contained in that report.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 414 Power to investigate company ownership. — COMPANIES ACT Open official source

(1) Where it appears to the Registrar that there is good

reason to appoint one or more inspectors to investigate and report

on the membership of any company for the purpose of determining

the true persons who are or have been financially interested in the

success or failure of the company or able to control or materially

influence its policy, he may by letter of authority appoint one or

more inspectors for such purpose.

(2) The appointment of inspectors made by virtue of this article

may establish the scope of their investigation, whether as respects

the matter or the period to which it is to extend or otherwise, and in

particular may limit the investigation to matters connected with

particular shares or debentures.

(3) If a request for an investigation under this article with

respect to particular shares or debentures of a company is made to

the Registrar by members of the company, and the number of

persons making the request or the amount of the shares held by

them is not less than that required for a request for the appointment

of inspectors made by virtue of article 404(2) -

(a) the Registrar shall appoint inspectors to conduct the

investigation, unless he is satisfied that the request is

vexatious; and

(b) the Registrar may exclude from the scope of the

investigation any matter in respect of which he is

satisfied that it would be unreasonable to investigate.

(4) Subject to the terms of their appointment, the inspectors’

powers shall extend to the investigation of any circumstances

suggesting the existence of an arrangement or understanding

which, though not legally binding, is or was adhered to or likely to

be adhered to in practice and which is relevant to the purposes of

the investigation.

(5) The Registrar may, before appointing inspectors, require

the person or persons making the request to give such security as he

may require for payment of expenses of the investigation.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 415 Provisions applicable on investigation under article 414. — COMPANIES ACT Open official source

(1) For the purposes of an investigation made by virtue of

article 414, the provisions of articles 406(1), 407, 408 and 409 shall

apply with the necessary modifications of references to the affairs

of the company or to those of any other body corporate, subject

however to the provisions of sub-articles (2) to (4).

(2)

The provisions of the articles referred to in sub-article (1)

shall apply to -

(a) all persons who are or have been, or whom the

inspector has reasonable cause to believe to be or have

been, financially interested in the success or failure of

the company or any other body corporate whose

membership is investigated with that of the company,

or able to control or materially influence its policy,

including persons concerned in the affairs of the

company only on behalf of others; and

(b) any other person whom the inspector has reasonable

cause to believe possesses information relevant to the

investigation,

as they apply in relation to officers and agents of the company or

any other body corporate whose membership is investigated, as the

case may be. "officers" and "agents" shall have the meaning

assigned to them by article 407(4).

(3) If the Registrar is of the opinion that there is good reason

for not divulging any part of a report made by virtue of article 414

and of this article, he may forward or furnish a copy of the report in

accordance with the provisions of article 410(3) with the omission

of that part.

(4) The applicant or applicants for the investigation shall be

liable to such extent, if any, as the Registrar may direct; and subject

as aforesaid, the expenses of an investigation made by virtue of

article 414 shall be paid out of public funds.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 416 Power to obtain information as to those interested in shares, etc. — COMPANIES ACT Open official source

(1) If it appears to the Registrar that there is good reason

to investigate the ownership of any shares in or debentures of a

company and that it is unnecessary to appoint inspectors for the

purpose, he may require any person, whom he has reasonable cause

to believe to have or to be able to obtain any information as to the

present and past interests in those shares or debentures and the

names and addresses of the persons interested and of any persons

who act or have acted on their behalf in relation to those shares or

debentures, to give any such information to the Registrar.

(2) For the purpose of this article a person is deemed to have an

interest in shares or debentures if he has any right to acquire or

dispose of them or of any interest in them, or to vote in respect of

them, or if his consent is necessary for the exercise of any of the

rights of other persons interested in them, or if other persons

interested in them can be required, or are accustomed, to exercise

their rights in accordance with his instructions.

(3) A person who fails to give information required of him by

virtue of this article, or who in giving such information makes any

statement which he knows to be false in a material particular, or

recklessly makes any statement which is false in a material

particular, shall be guilty of an offence and shall be liable on

conviction to a fine (multa) of not more than forty-six thousand and

five hundred and eighty-seven euro (€46,587), or to imprisonment for

a term not exceeding three years, or to both such fine (multa) and

imprisonment.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 417 Power to impose restrictions on shares or debentures. — COMPANIES ACT Open official source

(1) Where in connection with an investigation made by

virtue of article 414 or article 416, it appears to the Registrar that

there is difficulty in finding out the relevant facts about any shares,

whether issued or to be issued, and that the difficulty is due wholly

or mainly to the unwillingness of any of the persons referred to in

the said two articles to assist the investigation as required by this

Act, the Registrar may by order direct that the shares shall until

further notice be subject to the restrictions imposed by sub-articles

(2) to (7).

(2) An order made by virtue of sub-article (1) shall have the

following effects

(a) any transfer of those shares, or in the case of unissued

shares any transfer of the right to be issued with them

and any issue of them, shall be void;

(b) no voting rights shall be exercisable in respect of those

shares;

(c) no further shares shall be issued in lieu of those shares

or in pursuance of any offer made to their holder;

(d) except in a winding up, no payment shall be made of

any sums due from the company on those shares,

whether in respect of capital or otherwise.

(3) Where the Registrar makes an order directing that shares

shall be subject to the restrictions mentioned in sub-article (2), any

person aggrieved thereby may apply to the court and the court may,

if it deems fit, direct that the shares shall cease to be subject to the

said restrictions.

(4) Any notice of the Registrar or order of the court may direct

that shares shall cease to be subject to the restrictions mentioned in

sub-article (2)(a) and (b), with a view to permitting a transfer of

those shares, and may retain the restrictions mentioned in the said

sub-article (2)(c) and (d), either in whole or in part, insofar as they

relate to any right acquired or offer made before the transfer.

(5)

Any person who -

(a) exercises or purports to exercise any right to dispose

of any shares which, to his knowledge, are for the time

being subject to the restrictions mentioned in sub-

article (2), or of any right to be issued with any such

shares; or

(b) votes in respect of any such shares, whether as holder

or as proxy, or appoints a proxy to vote in respect

thereof,

shall be guilty of an offence and shall be liable on conviction to a fine

(multa) of not more than four thousand and six hundred and fifty-eight

euro (€4,658), or imprisonment for a term not exceeding six months,

or to both such fine (multa) and imprisonment.

(6) Where shares in any company are issued in contravention of

the restrictions mentioned in sub-article (2), every officer of the

company who is in default shall be guilty of an offence and shall be

liable on conviction to a fine (multa) of not more than eleven thousand

and six hundred and forty-six euro (€11,646).

(7) This article shall apply in relation to debentures as it

applies in relation to shares.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 418 Registrar’s powers to require production of documents. — COMPANIES ACT Open official source

(1) The powers arising under this article shall be

exercisable in relation to the following persons with regard to the

respective entity as follows

(a)

(i)

the officers of a company;

(ii)

the partners having the administration or

representation of any other commercial

partnership; and

(b) the persons having the administration or control in

Malta of, or any individuals authorised to represent in

Malta a body corporate constituted or incorporated

outside Malta which is carrying on business in Malta

or has at any time carried on business in Malta.

(2) The Registrar may at any time, if he thinks there is good

reason to do so, in the exercise of the duties and powers vested in

him under this Part, give directions to any person referred to in sub-

article (1) requiring him, at such time and place as may be specified

in the directions, to produce such accounts, accounting records or

documents as may be so specified.

(3) Where by virtue of sub-article (2) the Registrar has power

to require the production of accounts, accounting records or

documents from any person referred to in sub-article (1), he shall

have the like power to require production of those accounts,

accounting records or documents from any person who appears to

him to be in possession of them; provided that where any such

person claims a privilege or other charge on accounts, accounting

records or documents produced by him, the production shall be

without prejudice to that privilege or charge.

(4) The power under this article to require a person referred to

in sub-article (1) or other person to produce accounts, accounting

records or documents shall include the power -

(a) if the accounts, accounting records or documents are

produced -

(i)

to take copies of or extracts from them; and

(ii)

to require that person, or any other person who is

a present or past officer of, or is or was at any

time employed by the entity in question, to

provide an explanation of any of them;

(b) if the accounts, accounting records or documents are

not produced, to require the person who was required

to produce them to state, to the best of his knowledge

and belief, where they are.

(5) If the requirement to produce accounts, accounting records

or documents or to provide an explanation or to make a statement is

not complied with, the person on whom the requirement was so

imposed shall be guilty of an offenceand liable on conviction to a

fine (multa) of not more than eleven thousand and six hundred and

forty-six euro (€11,646).

(6) Where a person is charged with an offence under sub-article

(5) in respect of a requirement to produce any accounts, accounting

records or documents, it shall be a defence to prove that they were

not in his possession or under his control and that it was not

reasonably practicable for him to comply with the requirement.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 419 Entry and search of premises. — COMPANIES ACT Open official source

(1) If the Registrar is satisfied that reasonable grounds

exist for suspecting that there are on any premises any accounts,

accounting records or documents of which production has been

required under article 418 and which have not been produced in

compliance with that requirement, he shall have the right to enter

and search any such premises in accordance with the provisions of

sub-articles (2) and (3).

(2) The Registrar, in exercising his right to enter and search the

premises as specified in sub-article (1), shall have the right to take

possession of any accounts, accounting records or documents

appearing to be such accounts, accounting records or documents as

referred to in the said sub-article, or to take in relation to any

accounts, accounting records or documents so appearing, any other

steps which he shall consider to be necessary for preserving them

and preventing interference with them.

(3) The right conferred upon the Registrar by virtue of sub-

article (1) shall only be exercisable during working days, between

seven in the morning and seven in the evening, and in all cases the

Registrar shall be accompanied by an officer of the Police of a rank

not below that of inspector and the Registrar shall, if required,

produce evidence of his authority.

(4) Any accounts, accounting records or documents of which

possession is taken under this article may be retained -

(a) for a period of ninety days; or

(b) if within that period any such criminal proceedings as

are mentioned in article 420(1)(a) or (b), being

proceedings to which the accounts, accounting records

or documents are relevant, shall commence,

until the conclusion of those proceedings.

(5) A person who obstructs the exercise of a right of entry or

search conferred by virtue of this article, or who obstructs the

exercise of a right so conferred to take possession of any accounts,

accounting records or documents, shall be guilty of an offence and

liable on conviction to a fine (multa) of not more than four thousand

and six hundred and fifty-eight euro (€4,658), or to imprisonment for a

term not exceeding six months, or to both such fine (multa) and

imprisonment.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 420 Provision for security of information obtained. — COMPANIES ACT Open official source

(1) No information or document relating to an entity as is

referred to in article 418(1) which has been obtained under the said

article 418 or article 419 shall, without the previous consent in

writing of that entity, be published or disclosed, unless the

publication or disclosure is required -

(a) with a view to the institution of, or otherwise for the

purposes of, any criminal proceedings pursuant to, or

arising out of, this Act or any other law;

(b) for the purposes of the examination of any person by

inspectors appointed under this Part in the course of

their investigation;

(c) for the purpose of enabling the responsible Minister,

the Registrar or the competent authority to exercise, in

relation to the entity or any other entity, any of their

functions under this Act, the Insurance Business Act,

the Malta Financial Services Authority Act, the

Financial Markets Act, the Prevention of Financial

Markets Abuse Act, the Investment Services Act, the

Banking Act and the Financial Institutions Act;

(d) for the purposes of proceedings under article 419.

(2) A person who publishes or discloses any information or

document in contravention of this article shall be guilty of an

offence and liable on conviction to a fine (multa) of not more than

forty-six thousand and five hundred and eighty-seven euro (€46,587),

or to imprisonment for a term not exceeding three years, or to both

such fine (multa) and imprisonment.

(3) For the purposes of this article "competent authority" shall

mean -

(a) the Central Bank of Malta;

(b) the competent authority under the Investment Services

Act;

(c) an inspector appointed under the Insurance Business

Act;

(d) an inspector appointed under the Banking Act;

(e) the Malta Financial Services Authority carrying out its

functions under the Malta Financial Services Authority

Act;

(f) the regulated market carrying out its functions under

the Financial Markets Act; and

(g) the competent authority under the Financial

Institutions Act.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 421 Punishment for destroying, mutilating, etc., company documents. — COMPANIES ACT Open official source

(1) A person, being an officer of any such entity as is

referred to in article 418(1), who -

(a) destroys, mutilates or falsifies, or permits, assists or

participates in the destruction, mutilation or

falsification of a document affecting or relating to the

entity’s assets or affairs; or

(b) makes, or permits, assists or participates in the making

of, a false entry in such a document,

shall be guilty of an offence.

(2) Any person as referred to in sub-article (1) who

fraudulently either disposes of, alters or makes an omission in any

such document as is referred to in that sub-article or permits,

assists or participates in a fraudulent disposal, fraudulent altering

or fraudulent making of an omission in, any such document, shall

be guilty of an offence.

(3) A person guilty of an offence under this article shall be

liable on conviction to a fine (multa) of not more than forty-six

thousand and five hundred and eighty-seven euro (€46,587), or to

imprisonment for a term not exceeding three years, or to both such fine

(multa) and imprisonment.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 422 Punishment for furnishing false information. — COMPANIES ACT Open official source

A person who, in responding to a requirement imposed

under article 418 to provide an explanation or make a statement,

knowingly or recklessly provides or makes an explanation or

statement which is false in a material particular shall be guilty of an

offence and liable on conviction to a fine (multa) of not more than

forty-six thousand and five hundred and eighty-seven euro (€46,587),

or to imprisonment for a term not exceeding three years, or to both

such fine and imprisonment.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 423 Privileged information. — COMPANIES ACT Open official source

(1) Nothing contained in articles 404 to 417 shall require

the disclosure to the Registrar or to an inspector appointed by him -

(a) of communications which are privileged by virtue of

the provisions of article 588 of the Code of

Organization and Civil Procedure;

(b) by a company’s bankers of information on the affairs

of any of their customers other than the company

itself.

(2) Nothing contained in articles 418 to 422 shall be deemed to

compel the production by any person as is referred to in article 588

of the Code of Organization and Civil Procedure of any document

containing a communication which is privileged in accordance with

that article, or shall authorise the taking of possession of any such

document which is in that person’s possession.

(3) Notwithstanding the provisions of article 418, the Registrar

shall not require the production by a person carrying on the

business of banking of a document relating to the affairs of a

customer, unless it appears to the Registrar that it is necessary to do

so for the purpose of investigating the affairs of that person

carrying on the business of banking or of the customer, being an

entity in terms of article 418.

(4) Subject to the provisions of sub-article (3), nothing

contained in the Professional Secrecy Act shall be construed as

precluding or otherwise restricting -

(a) the powers and functions assigned to the Registrar or

to an inspector appointed by him under the provisions

of this Part; and

(b) the disclosure by any person of information,

documentation or other communication to the

Registrar or to an inspector appointed by him, or the

doing of anything required to be done, by virtue of any

of the provisions of this Part.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 424 Right to inspect and obtain copies of documents, etc., kept by Registrar. — COMPANIES ACT Open official source

Any person may -

(a) inspect the documents kept by the Registrar other than

documents obtained by him or coming to his

knowledge in the course of the exercise of his powers

arising under articles 403 to 423;

(b) obtain a copy of the certificate of the registration of

any commercial partnership or a copy or extract of any

other document, and require it to be certified by the

Registrar as a true copy.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 425 Power to make regulations. — COMPANIES ACT Open official source

(1) The Minister may make regulations for the purpose of

carrying into effect the provisions of this Act, and may, without

prejudice to the generality of the foregoing, by such regulations -

(a) prescribe the fees to be levied in relation to the

registration, publication, inspection or issue of

documents, certificates, copies or extracts, required or

allowed under this Act, and different fees may be

levied for different kinds or categories of commercial

partnerships, and may further prescribe different fees

for companies on the basis of their status;

(b) prescribe forms to be used under this Act;

(c) amend, revoke or substitute the minimum share capital

requirement established by article 72, the criteria set

out in article 185 and the formulae for determining the

average number of employees set out in sub-article

(12) of the last mentioned article;

(d) amend any Schedule to this Act other than the Ninth,

Eleventh and Twelfth Schedule and for this purpose

may distinguish between different categories of

companies;

(e) prescribe the qualifications necessary to act as

company

secretary,

including

any

residence

qualification, as he may deem fit;

(f)

prescribe regulations, not inconsistent with the

provisions of this Act, for the conduct of winding up

proceedings under Title II of Part V of this Act, and

prescribe criteria for establishing who may be

considered as a fit and proper person to act as

liquidator for the purposes of article 305(1);

(g) prescribe requirements in relation to the allotment and

the transfer of shares or debentures, their numbering,

their registration with the company and with the

Registrar, the keeping of the register of members and

of debentures, and the issue of the relevant share and

debenture certificates in respect of any allotment or

transfer of shares or debentures, in relation to

companies listed on any regulated market or any

equivalent market in a non-Member State or non-EEA

State and to investment companies with variable share

capital, and such requirements that are prescribed may

also be in substitution of those of the relevant

provisions contained in Chapters IV and VI of Title I

of Part V of this Act;

(h) Deleted by Act XI. 2017.16.

(i)

provide for the exemption of companies, or any kind

or category thereof, from any of the provisions of

articles 105 to 111, or for the application to any such

companies of the said provision subject to such

variations and conditions as may be prescribed;

(j)

Deleted by Act XVIII.2025.56.

(k) provide for the exemption of oversea companies,

which establish a branch or place of business within

Malta under Part XI of this Act, from any of the

provisions of Part XI of this Act, or for the application

to any such oversea companies of the said provisions

with such qualifications and subject to such variations

and conditions as may be prescribed, including the

prescription of additional or different rules and

requirements regulating such oversea companies;

(l)

(Deleted by Act V. 2020.237)

(m) prescribe requirements in relation to the system of

interconnection of registers and the interoperability of

registers within the system of interconnection of

registers through the European e-Justice portal, and

such requirements may stipulate any further conditions

necessary to implement Directive 2012/17/EU of the

European Parliament and of the Council of 13 June

2012 amending Council Directive 89/666/EEC and

Directives 2005/56/EC and 2009/101/EC of the

European Parliament and of the Council as regards the

interconnection of central, commercial and companies

registers;

(n) require undertakings other than small undertakings to

disclose information in their annual financial

statements which is additional to that required

pursuant to this Act;

(o) transpose and implement Community Company Law

Directives; such regulations may provide for such

exemptions, modifications, adaptations and variations

of any of the provisions of this Act and may introduce

conditions or qualifications thereto as may be

specified and as may be necessary for the transposition

and implementation of such Directives;

(oa) provide for the exemption of certain small undertakings

from the provisions of Chapter IX of Title I of Part V of

this Act and from the requirements imposed by article

179, subject to such conditions and requirements as may

be prescribed;

(p) prescribe anything that may be prescribed and

generally do any other matter incidental or

supplementary to any of the foregoing matters; and

(q) prescribe and provide the necessary regulations,

requirements and guidelines in relation to the

establishment, administration and upkeep of the central

data repository and any other register which the Registrar

may be required to keep in fulfilment of his duties,

including any access qualification, and may further

prescribe fees for such access, as the Registrar may deem

fit;

(r)

prescribe regulations for the better carrying out of any of

the provisions relating to the registered office in Malta

and the electronic mail address of the company;

(s)

prescribe regulations and requirements for the formation,

registration and governance of limited liability

companies consistent with this Act that are intended to

operate in specific economic sectors, in consultation with

other Ministers, as may be necessary.

(2) The Minister may by regulations provide for the obligation

and for the form and manner of disclosure and notification of

interests, including ownership, in shares in public companies, and

may in particular

(a) prescribe by and to whom, when, under what

circumstances and conditions and how such disclosure

or notification shall be made; and different obligations

and duties may be prescribed for different types of

companies;

(b) establish the particulars to be contained in any

notification of interests in shares and the

circumstances when investigations may be carried out

by a company in respect of the holding of any shares,

or other interest therein, and further establish when, to

whom and in what manner the company shall be

obliged to report on the findings of any such

investigation;

(c) provide for the keeping of registers of interests in

shares, for the notification and registration of share

acquisitions and disposals, and for the manner in

which such notification and registration shall be

recorded, and provide for the investigation of share

acquisitions and disposals;

(d) establish -

(i)

offences, providing for a fine (multa) of not more

than two hundred and thirty thousand euro

(€230,000) or a term of imprisonment not

exceeding five years, or for both such fine and

imprisonment;

(ii)

administrative penalties not exceeding two

thousand and three hundred euro (€2,300), or daily

default penalties not exceeding fifty euro (€50) for

every day during which the default continues, or

both such penalties and daily default penalties;

for failure to effect a prescribed disclosure or to make

a notification or for any other contravention of the

provisions of any regulation made in terms of this sub-

article;

(e) provide for any matter incidental to or connected with

any of the above.

(3)

(a) The Minister may by regulations provide for the

formation, constitution and regulation of economic

interest groupings to be endowed with such legal

personality and capacity as may be established. In this

sub-article, "economic interest groupings" refers to

groups or associations consisting of two or more

persons and whose objects are to facilitate or develop

the economic activities of their members, or to

improve or increase the profits or benefits of such

activities.

(b) Regulations made by the Minister in virtue of

paragraph (a), shall, in particular and without

prejudice to the authority vested in the Minister by the

said paragraph, prescribe

(i)

the contents and particulars that are to be stated

in the deed or instrument of constitution of an

economic interest grouping, including its name,

objects and purposes, capital structure, duration,

membership, the location of its principal or

registered office, and the requirements relating

to the form, registration and publication of such

deed or instrument, and the particulars to be

stated in the business letters of an economic

interest grouping;

(ii)

requirements relating to the keeping of records

with respect to the transactions and financial

position of the grouping, and other accounting,

auditing, reporting and disclosure obligations;

(iii)

rules in respect of the administration and

management of the grouping and of the

administrative and management organs of the

grouping,

including

the

powers

and

responsibilities of the directors, and holding of

meetings of the members, the keeping of

registers of members and such other records as

may be prescribed;

(iv)

rules governing the rights and obligations of the

members, the admission, cessation or expulsion

of members, the rights of members to share in

the profits of the grouping and in its residual

assets on liquidation and their liability to

contribute to losses;

(v)

rules governing the conversion, dissolution and

winding up of an economic interest grouping,

including the appointment of a liquidator, and

his powers and responsibilities;

(vi)

rules providing for the possibility of cross-

border and transnational economic interest

groupings, including European Economic

Interest Groupings, enjoying the same capacity

in two or more states by virtue of their

registration in one state; for the regulation of the

formation, constitution and recognition of such

groupings; and providing for the application of

any regulations made by virtue of this sub-

article to such groupings with such exemptions,

variations or modifications as may be

established;

(vii)

the fees that may be levied in relation to the

registration of groupings referred to in this sub-

article, or categories of such groupings;

(viii) the articles of this Act which shall apply to

economic interest groupings, or to particular

categories thereof, subject to such conditions

and with such exemptions, modifications and

variations as may be deemed appropriate.

(4)

The Minister may make detailed regulations -

(a) for the purpose of allowing a body corporate, formed and

incorporated or registered in a country other than Malta,

to be continued as or be converted into a body corporate

in accordance with this Act and under the applicable laws

of Malta,

(b) for the purpose of allowing the continuance or

conversion of a body corporate registered under this Act

as a body corporate incorporated or registered under

the laws of a country other than Malta, and

(c) for the purpose of allowing one or more bodies corporate,

formed and incorporated or registered in a country other

than Malta, to carry out a cross-border merger or cross-

border division with or otherwise involving a body

corporate established or to be established in accordance

with this Act and under the applicable laws of Malta.

Such regulations may establish requirements in relation to

the procedures to be followed and the documentation, undertakings

and information to be supplied to the Registrar for the purpose of

carrying out any such continuance, cross-border conversion, cross-

border merger or cross-border division and the rules may further

authorise the Registrar to issue guidelines stipulating such further

conditions and requirements as the Minister may deem appropriate,

and different regulations and guidelines may be issued for different

categories or classes of cases.

(5) The Minister may by regulations provide for the formation,

constitution and regulation of European Companies (SE). In this

sub-article, a European Company (Societas Europea or SE) refers

to a company set up within the territory of the European Union on

the conditions and in the manner laid down in Council Regulation

2157/2001 of 8 October 2001 on the Statute for a European

Company (SE).

(6) The Minister may make regulations to transpose, implement

and give effect to the provisions and requirements of Directives,

Regulations and any other legislative measures of the European Union

requiring transposition and, or implementation, as they may be

amended from time to time, including any implementing measures that

have been or may be issued thereunder.

(7) Regulations made under any of the provisions of this Act

may be made in the English language only.

(8) Where in respect of any of the services or other acts to be

performed by the Registrar a fee is prescribed under sub-article (1),

the regulations may prescribe that the Registrar may decline to

perform such service or other act until the appropriate fee is paid;

and that any instrument, notice, return or other document delivered,

given or forwarded to the Registrar under this Act shall, if a fee is

prescribed as aforesaid in respect of the registration or publication

thereof, be deemed not to have been delivered, given or forwarded

as required by this Act until the appropriate fee is paid.

(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.

(14) The Minister may make regulations in relation to large

undertakings which fall under his responsibility, to establish procedures

to ensure compliance with this Act regarding corporate sustainability

reporting.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 426 Breach of regulations. — COMPANIES ACT Open official source

(1) The power to make regulations under article 425

includes the power to prescribe that any person in breach of any

provision of any such regulation shall be guilty of an offence and

sshall on conviction be liable to a fine (multa) of not more than two

hundred and thirty thousand euro (€230,000) or imprisonment for a

term not exceeding six months or to both such fine and

imprisonment, as may be prescribed.

(2) The power to make regulations under article 425 includes

the power to prescribe that any person who acts in breach of any

such regulation shall be liable to a penalty of not more than two

thousand and three hundred euro (€2,300) and, where applicable, to a

further penalty of fifty euro (€50) for every day during which the

default continues, to be imposed by the Registrar in terms of article

401.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 427 Administrative penalties under this Act. — COMPANIES ACT Open official source

(1) Where any provision of this Act provides for the

imposition of a penalty, the amount of such penalty shall be

determined by reference to the Eleventh Schedule, which specifies

the maximum penalty that may be imposed by the Registrar under

any of the provisions of this Act.

(2) In the Eleventh Schedule, the first column indicates the

article and sub-article of this Act which prescribes that a penalty

shall be imposed, the second column gives a general description of

the infringement, which description shall not be relied on in

interpreting any provision of this Act, the third column prescribes

the maximum penalty and the fourth column prescribes the

maximum daily default penalty, if any. The penalty shall become

due on the day on which the default occurs and the daily default

penalty shall be due for every day during which the default

continues and shall accrue from the day following that on which the

default occurs.

(3) Action by the Registrar for the recovery of a penalty under

this Act shall be prescribed by the lapse of five years from the day

on which the default occurs.

(4) A company shall be jointly and severally liable with its

officers for the payment of any administrative penalties imposed

under this Act.

PART XIII - TRANSITIONAL AND FINAL PROVISIONS

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 428 Transitional provisions. — COMPANIES ACT Open official source

(1) As from the appointed day a commercial partnership

shall not be formed and registered unless it complies with the

provisions of this Act, and a commercial partnership formed and

registered as aforesaid shall be regulated by this Act.

(2) Subject to the provisions of this Part, as from the appointed

day all commercial partnerships formed and registered under the

Ordinance shall be deemed to be formed and registered under this

Act, and shall retain the same legal personality and maintain all

existing rights and obligations.

(3) Investment companies with variable share capital formed

and registered before the appointed day shall comply with the

provisions of this Act within one month from the appointed day and

the provisions of sub-articles (4) to (13), other than sub-article (8),

shall not apply to them.

(4) Unless otherwise provided in this article, and

notwithstanding anything contained in the Memorandum or

Articles or in the deed of partnership, as the case may be, as from

the 1st March, 1998, the provisions of this Act shall apply to

commercial partnerships formed and registered under the

Ordinance. Such commercial partnerships shall, before the 1st

March, 1998, comply with the provisions of this Act and shall, until

such time, continue to be regulated by the Ordinance

Provided that a commercial partnership may, by complying

with the provisions of this Act before such date, elect to be

regulated by the provisions of this Act and for this purpose the

company shall additionally deliver a notice in writing to the

Registrar for registration; and such election shall not take effect

unless and until such notice is registered.

(5) The provisions of Chapters IX and X of Part V of this Act

shall, in regard to companies formed and registered under the

Ordinance, apply to accounting periods commencing after 30th

June 1996.

(6) A private company formed and registered under the

Ordinance shall, by complying with the provisions of this Act

relating to private companies within the period specified in sub-

article (4), continue as a private company under this Act unless it

changes its status to one of a public company in accordance with

the provisions of article 213.

(7) A public company formed and registered under the

Ordinance shall, by complying with the provisions of this Act

relating to public companies within the period specified in sub-

article (4), continue as a public company under this Act unless it

changes its status to one of a private company in accordance with

the provisions of article 213.

(8) If an investment company as is referred to in sub-article (3),

fails to comply with the provisions of the said sub-article within the

period therein specifi ed, t hat comp an y shall be considered

dissolved and the Registrar may, at any time, apply to the court in

accordance with the provisions of Title II of Part V of this Act

Provided that the court may, if it thinks fit, grant a further

period not exceeding one year from the date of its decision in which

the commercial partnership may remedy the failure.

(9) A commercial partnership as is referred to in sub-article (4)

shall make the changes necessary in order to comply with the

provisions of this Act by the 28th February, 1998.

(10) Any changes necessitated by virtue of sub-article (9) shall

be made

(a) in the case of a partnership en nom collectif, with the

consent of a partner or partners having contributed at

least fifty per cent of the contributions made to the

partnership;

(b) in the case of a partnership en commandite, with the

consent of a general partner or partners having

contributed at least fifty per cent of the contributions

made by the general partners to the partnership, or

holding at least fifty per cent of the nominal value of

the shares of the partnership held by the general

partners as the case may be, together with the consent

of a limited partner or partners having contributed at

least fifty per cent of the contributions made by the

limited partners to the partnership or holding at least

fifty per cent of the nominal value of the shares held

by the limited partners as the case may be;

(c) in the case of a company, notwithstanding anything

contained in the Memorandum or Articles, by means

of a resolution, passed by a general meeting of the

company called for the purpose, by -

(i)

fifty per cent of the members represented at the

meeting and voting; or

(ii) a number of members having between them not

less than fifty per cent of the nominal value of

the shares represented at that meeting, and

voting thereat;

and any provision relating to the quorum of members

at that meeting shall not apply.

The provisions of this sub-article shall not apply to any

changes to the deed of partnership or to the Memorandum or

Articles, as the case may be, which are not strictly necessary in

order to comply with the provisions of this Act.

(11) An association en participation constituted before the

appointed day shall comply with the provisions of this Act within a

period of two years from the appointed day.

(12) Notwithstanding the other provisions of this article, article

127 shall come into effect on the appointed day.

(13) The provisions of Parts VII, VIII and IX of this Act shall, in

regard to companies formed and registered under the Ordinance,

come into effect as from the appointed day; and a commercial

partnership resulting from a conversion within the meaning of Part

VII, a new commercial partnership or an acquiring commercial

partnership within the meaning of Title I of Part VIII, a new

company or an acquiring company within the meaning of Title II of

Part VIII and recipient companies or new companies resulting from

a division within the meaning of Part IX, shall comply with and

shall be regulated by this Act as from the date when the conversion,

amalgamation or the division becomes effective in terms of this

Act, according to the case.

(14) A commercial partnership as is referred to in sub-article (4)

which fails to effect the changes necessary in order to comply with

the provisions of this Act before the 1st March 1998 shall become

liable to a penalty of one hundred and sixteen euro and forty-seven

cents (116.47), and for every day thereafter during which the

default continues, to a further penalty of four euro and sixty-six

cents (4.66). The provisions of article 427(1) and (2) shall not

apply to the penalties imposed under this sub-article.

(15) Notwithstanding the provisions of article 401(1)(d), until

such time as the instrument or resolution, or a copy thereof, giving

effect to the changes necessitated by virtue of sub-article (4) is

delivered to the Registrar for registration, and until such time as

any penalties that may be incurred by virtue of sub-article (14) are

paid, the Registrar shall not retain and register

- in the case of a company, any resolution, notice or return

required to be registered under this Act, other than any resolution,

notice, return or other document required to be delivered to the

Registrar in terms of the provisions of Title II of Part V and of

articles 122, 146, 183 and 184 of this Act; and

- in the case of any other commercial partnership any

instrument giving effect to any alteration or addition to the deed of

partnership.

(16) The Minister may by order in the Gazette, establish a date,

being a date after the 31st December 1998, on which any company

which fails to comply with the provisions of sub-article (4) shall be

deemed to be a company which is not carrying on business or is not

in operation for the purposes of article 325.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 429 Transitional provisions as to winding up of commercial partnerships. — COMPANIES ACT Open official source

(1) The dissolution of a commercial partnership

occurring before, on or within six months from the appointed day

shall, after the appointed day, continue to be in accordance with the

provisions of the Ordinance and the consequential winding up of

such a commercial partnership shall be regulated accordingly

Provided that, where, after the lapse of the two year period

r e f e r r e d t o i n article 4 2 8 (4 ), t h e n a m e o f a n y c o m m e r c i a l

partnership to which this sub-article applies has not already been

struck off the register, the Registrar may, at any time thereafter,

apply to the court for it to order that the winding up of the affairs of

that commercial partnership shall, from then onwards, be in

accordance with the provisions of this Act relating to winding up

by the court, and to appoint, where necessary, a liquidator or

liquidators or substitute any existing liquidator or liquidators to

carry out that winding up.

(2) Any dissolution of a commercial partnership occurring after

the expiry of six months from the appointed day, shall be in

accordance with the provisions of this Act and the consequential

winding up of such a commercial partnership shall be regulated

accordingly.

(3) The provisions of article 304 shall, in relation to companies

formed and registered under the Ordinance, commence to apply on

the expiry of six months from the appointed day.

(4) The provisions of article 326 shall come into force on the

expiry of six months from the appointed day.

(5) In relation to a company, bankruptcy proceedings

commenced before, on or within six months from the appointed day

shall, after the appointed day, continue to be governed by the

provisions of Part III of the Commercial Code relating to

bankruptcy.

(6) The provisions of this article shall apply notwithstanding

anything contained in article 428.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 430 Periods for the exercise of rights. — COMPANIES ACT Open official source

Where for the exercise of a right this Act establishes a

period shorter than that established by any other law, the period

established by this Act shall apply even to such rights as may have

arisen before the appointed day but shall commence to run as from

such day

Provided that where, on the appointed day, the period which

is still to run under such other law is shorter than that established

by this Act, reckoned as aforesaid, the period established by such

other law shall continue to apply.

Laws of Malta — Chapter 386 — COMPANIES ACT

Art. 431 Savings. — COMPANIES ACT Open official source

(1) Notwithstanding anything to the contrary contained in

articles 428 and 429 -

(a) Deleted by Act XVIII.2025.57.

(b) private companies whose objects and activities are

limited to the sole purposes of owning, managing,

administering or operating ships and to transactions

ancillary thereto, whether formed and registered

before, on or after the appointed day, shall be

regulated by the Ordinance and shall continue to be so

regulated until such date, as the Minister may by order

in the Gazette establish, from when the provisions of

this Act or of any other law shall commence to apply

to them. In this paragraph "ships" shall have the

meaning assigned to it by the Merchant Shipping Act

Provided that the Minister may establish

different dates on which the different provisions of this

Act shall commence to apply with respect to such

companies

Provided further that, in his order, the Minister

may exempt such companies from any one or more of

the provisions of this Act, with such qualifications and

under such conditions as may be specified in the order;

(c) the deed of partnership of a partnership en nom

collectif, or of a partnership en commandite, formed

and registered under the Ordinance, shall not be

required to be amended so as to specify the value of

the respective contribution of every partner in terms of

article 14(1)(e)

Provided that where all the partners in a

partnership en nom collectif and where all the partners,

both general and limited, in a partnership en

commandite, so agree, they may specify in the deed of

partnership the value of their respective contribution

to the partnership; and

(d) a commercial partnership which on the 1st March,

1998, is a controlled asset as defined in the Controlled

Companies (Procedure for Liquidation) Act, shall

continue to be regulated by the Ordinance until six

months after such commercial partnership shall have

ceased to be a controlled asset in accordance with that

Act; and the provisions of article 428 shall apply to

such controlled company as if reference therein to the

28th February 1998 were a reference to the last day of

the period of six moths after the commercial

partnership shall have ceased to be a controlled asset,

and a reference to the 1st March 1998 were a reference

to the first day immediately following such period, and

the provisions of sub-article (16) of the said article 428

shall only be applicable after the 31st December of the

year in which the said period of six months would have

lapsed.

(2) Save as otherwise provided in sub-article (1), in article 428

and 429 or in any other provision of this Act, the Ordinance and the

Commercial Partnerships (Special Provisions) Act, 1994, are

hereby repealed

Provided that notwithstanding their repeal -

(a) anything that has lawfully been done by virtue of the

Ordinance and the Commercial Partnerships (Special

Provisions) Act, 1994, shall remain in force, except

insofar as it is inconsistent with any of the provisions

of this Act;

(b) all regulations made under the Ordinance and under

the Commercial Partnerships (Special Provisions) Act,

1994, shall remain in force and continue to have effect

as if made under this Act, except insofar as any such

regulation is inconsistent with any of the provisions of

this Act, until such time as they are repealed; and

(c) any liability to any penalty under any of the provisions

of the Ordinance shall continue to subsist

notwithstanding the repeal of the Ordinance. The

provisions of article 401 shall apply also to penalties

fixed by the Registrar under the Ordinance unless

proceedings for the recovery of such penalties have

already been instituted in accordance with the

provisions of the Ordinance before the appointed day.

C OM PA N I E S