Grouping) Regulations, 2003

L.N. 271 of 2003

COMPANIES ACT

(CAP. 386)

Companies Act (European Economic Interest

Grouping) Regulations, 2003

IN exercise of the powers conferred by subarticle (3) of article

425 of the Companies Act, the Minister of Finance and Economic

Affairs, has made the following regulations>-

The title of these regulations is the Companies Act (European

Economic Interest Grouping) Regulations, 2003, and they shall come

into force on the 1 May, 2004.

In these regulations, unless the context otherwise requires>-

(Regulation 24)

PENALTIES

Default

Penalty

Daily Penalty

Failure to indicate particulars

200 liri

None

concerning grouping on business

letters, etc.

Officer of grouping failing to comply

200 liri

10 liri

with provisions as to registration or

returns of EEIG

Failure of officer of EEIG to notify

200 liri

10 liri

the Registrar of changes in managers

of grouping

Officer of grouping failing to notify

200 liri

10 liri

EEIG situated in Malta but having

its official address outside Malta

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

“Act” means the Companies Act<

“body corporate” means any entity have a legal personality

distinct from that of its members<

“contract” means the contract for the formation of an EEIG<

“Court” means the Civil Court, First Hall<

“EC Regulation” means the Council Regulation of the

European Community on the European Economic Interest

Grouping published by EC Regulation 2137#85<

“EEIG” or “grouping” means a grouping referred to as a

European Economic Interest Grouping formed pursuant to the

provisions of these regulations<

“Member State” means a member state of the European

Community<

“officer”, in relation to an EEIG, includes a manager, or any

other person designated as an officer in the contract of the EEIG.

(1) An EEIG may be formed by groups or associations

consisting of not less than two and not more than twenty persons for the

purpose of facilitating or developing the economic activities of its

members, or to improve or increase the profits or benefits of such

activities.

(2) The activities of the EEIG shall be related solely to the

economic activities of its members and to ancillary activities thereto.

(3) A grouping shall not>

(a) exercise, whether directly or indirectly, a power of

management or supervision over its members’ own activities or

over the activities of another undertaking<

(b) directly or indirectly, in any manner whatsoever, hold

shares in a member undertaking>

Provided that the holding of shares shall be possible when

necessary for the achievement of the objects of the grouping and if

done on its membersí behalf<

(c)

employ more than 500 persons<

(d) be a member of another EEIG.

(4) An EEIG has a legal personality distinct from that of its

members and shall on its registration be the subject of rights and

obligations, be capable of making contracts or other legal acts and of

suing and being sued.

(1) Only the following may be members of a grouping>

Constitution of an

EEIG.

(a) companies and other bodies corporate which have been

constituted or incorporated in accordance with the law of a Member

State and which have their registered or statutory office and central

administration in a Member State<

(b) natural persons who carry on any industrial, commercial,

craft or agricultural activity or who provide professional or other

services in the European Union.

(2) A grouping shall consist of at least>

(a) two companies or other bodies corporate within the

meaning of paragraph (a) of sub-regulation (1) of this regulation

which have their central administrations in different Member States<

(b) two natural persons within the meaning of paragraph

(b) of sub-regulation (1) of this regulation who carry on their

principal activities in different Member States< or

(c) a company or other body corporate and a natural person,

both within the meaning of sub-regulation (1) of this regulation,

of which the first has its central administration in one Member

State and the second carries on his principal activity in another

Member State.

(1) In all its business letters and order forms an EEIG shall

mention in legible characters its name, the country in which the grouping

is registered, together with its registration number, its official address,

whether the managers of the grouping are required to act jointly, and,

where applicable, the fact that the grouping is in liquidation.

(2) In all its business letters and order forms, an EEIG

registered in accordance with the provisions of regulation 23 of these

regulations shall, in addition to the requirements of paragraph (1) of

this regulation, also state in legible characters particulars relating to its

own registration.

(3) If default is made in complying with the provisions of

sub-regulations (1) and (2) hereof, every officer of the grouping who is

in default shall be liable to the penalty established in the Schedule to

these regulations.

A grouping which has, as its official address, an address in

Malta shall not be validly constituted under these regulations unless a

contract has been entered into by the parties intending to form a grouping

and such contract is delivered to the Registrar for registration.

Contents of contract

(1) A contract for the formation of an EEIG shall include

the following>

(a) the name of the grouping preceded or followed by the

words “European Economic Interest Grouping” or by the letters

“EEIG”, except where those words already form part of the name<

(b) the official address of the grouping<

(c)

the objects for which the grouping is formed<

(d) the name, legal form, permanent address or registered

office, and the registration number and place of registration, if

any, of each member of the grouping<

(e)

the period, if any, fixed for the duration of the grouping.

(2) The contract for the formation of an EEIG shall be

delivered for registration to the Registrar who, being satisfied that it

complies with the requirements of these regulations in respect of

registration and of matters precedent and incidental to it, shall register

(1) In addition to the contract for the formation of a grouping, Additional

the following documents and particulars must also be delivered to the documents.

Registrar for registration within fourteen days from the happening

thereof >

(a) any amendment to the contract , including any change

in the composition of a grouping<

(b) notice of the setting up or closure of any establishment

of the grouping<

(c) notice of a memberís assignment of his participation in

a grouping or a proportion thereof, in accordance with regulation

13 of these regulations<

(d) any decision relating to the dissolution and winding up

of a grouping<

(e) notice of the appointment of a liquidator of a grouping

which shall include his name, residential address, nationality and

official means of identification<

(f)

notice of termination of the appointment of a liquidator<

(g) notice of the termination of the winding up of the

grouping<

(h) any proposal to transfer the official address, in

accordance with regulation 10 of these regulations<

(i) any clause exempting a new member from liability for

the obligations of the grouping originating prior to his admission

as member, in accordance with regulation 15 of these regulations.

(2) If default is made in complying with the provisions of

regulation 7 and sub-regulation (1) of this regulation, every officer of

the grouping who is in default shall be liable to a penalty and, for every

day during which the default continues, to a further penalty as established

in the Schedule to these regulations.

(1) On the registration of an EEIG and the payment of the

prescribed fees, the Registrar shall certify under his hand that the EEIG

has been registered indicating the date of registration.

(2) A certificate of registration given in respect of an EEIG

under this regulation is conclusive evidence that the requirements of

these regulations in respect of registration and of matters precedent and

incidental to it have been complied with, and that the EEIG is an

organisation authorised to be registered, and is duly registered, under

these regulations.

(3) All persons carrying on activities or entering into

agreements in the name for or on behalf of the grouping in respect of

which a certificate of registration has not been issued shall, unless the

grouping does not, after its registration, assume the obligations arising

out of such activities, be personally and jointly and severally liable for

their dealings with third parties entered into by them in the

aforementioned capacity.

(1) When the transfer of the official address of an EEIG

registered in Malta results in a change in the law applicable under article

2 of the EC Regulation, a transfer proposal must be drawn up, delivered

to the Registrar for registration and published accordingly.

(2) The decision to transfer must be taken after the lapse of

two months of the publication of the proposal. Such decision requires

the unanimous consent of the members of the grouping. The transfer

shall become effective on the date on which the new official address of

the grouping is registered.

(3) Upon presentation to the Registrar of proof that the

grouping has been registered at the registry for its new official address,

the termination of the grouping’s registration with the Registrar shall

take effect.

An EEIG has its obligations guaranteed by the unlimited and

joint and several liability of its members>

Provided that no action shall lie against the members unless the

property of the grouping has first been discussed.

(1) Each member of an EEIG shall be entitled to one vote Votes of members.

unless the contract for the formation of the grouping provides that certain

members are entitled to more than one vote>

Provided that no one member shall hold a majority of votes.

(2) A unanimous decision by the members of a grouping

shall be required to>-

(a)

alter the objects of a grouping<

(b) alter the number of votes allotted to each member<

(c)

alter the manner in which decisions are taken<

(d) extend the duration of a grouping beyond the period fixed

in the contract<

(e) alter the contribution by any member to the financing

of the grouping<

(f) alter any other obligation of a member, unless otherwise

provided by the contract<

(g) make any alteration to the contract of the grouping not

covered by this sub-regulation, unless otherwise provided by that

contract.

Subject to the unanimous consent of the other members being Assignment of

participation.

obtained, any member of a grouping may assign his participation, or a

proportion thereof, either to another member or to a third party.

Unless otherwise provided for in the contract, a member of Participation as

security.

the grouping may use his participation as security only after the

unanimous consent of the other members has been obtained>

Provided that the holder of the security shall not at any time become

member of the grouping by virtue of that security.

(1) A decision to admit new members to a grouping requires New members.

the unanimous consent of the members of the grouping.

(2) Where a person becomes a member of an already

existing grouping, he shall thereby become liable for all the obligations

of the grouping even if incurred before the date at which he becomes a

member.

(3) Notwithstanding the provisions of sub-regulation (2) of

this regulation, a new member may be exempted from liability, by the

contract or in the instrument of admission, for the obligations of the

grouping which originated before his admission.

(1) A member of a grouping may withdraw in accordance

with the conditions laid down in the contract or, in the absence of such

conditions, with the unanimous consent of the other members.

(2) Any member of a grouping may, in addition to the above,

withdraw on just and proper grounds.

(1) Any member may be expelled from the grouping -

(a)

if he commits a serious breach of duty as a member<

(b) if he causes or threatens to cause serious disruption in

the operation of the grouping<

(c) in such other cases for which provision is made in the

contract for the formation of the grouping.

(2) Unless otherwise provided by the contract, such

expulsion may occur only by a decision of the court to which joint

application has been made by a majority of the other members.

(1) In addition to the provisions of regulations 16 and 17

of these regulations, a person shall also cease to be a member of a

grouping upon the occurrence of any of the following events -

(a) failure to comply with the provisions of sub-regulation

(1) of regulation 4 of these regulations<

(b) in the case of a natural person, his bankruptcy, death or

legal incapacity<

(c) in the case of a company or other body corporate, the

dissolution thereof.

(1) An EEIG shall be managed by one or more persons

and, where the person managing the EEIG is a body corporate, such

body corporate must designate one or more natural persons to represent

it.

(2) Any natural person designated under sub-regulation (1)

of this regulation above to represent the body corporate acting as

manager of an EEIG shall be subject to the same liabilities as if he

himself were a manager.

(3) The contract or, where not specifically provided for, a

unanimous decision of the members of the grouping shall determine

the conditions for the appointment and removal of the manager together

with his powers.

(4) In so far as the contract does not provide that the

grouping shall be validly bound only by two or more managers acting

jointly, the representation of a grouping shall vest in each of the managers

severally.

(5) Any act done by a manager of the grouping shall bind

the grouping as regards third parties, notwithstanding that such act falls

outside the objects of the grouping.

(6) Notwithstanding the provisions of sub-regulation (5) of

this regulation, the grouping shall not be bound by an act which falls

outside its objects if it proves that the third party knew that it was outside

the grouping’s objects or the third party could not in view of the

circumstances have been unaware thereof>

Provided that the publication of the contract 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 grouping’s objects.

(7) Any limitation on the powers of any manager of the

grouping shall not be relied on as against third parties independently of

whether that limitation, published or not, arises from the contract or

from a decision by the members of the grouping.

(1) There shall be delivered to the Registrar for registration Return as to

changes among

a return of any change among the managers of a grouping, specifying managers of an

the date of the change, together with the name and residence and, in the EEIG.

case of a body corporate, its principal or registered office, within fourteen

days from the happening thereof. In the case of the appointment of a

manager, the return shall also indicate whether the person is authorised

to act alone or jointly with any other manager.

(2) If default is made in complying with the provisions of

sub-regulation (1) of this regulation, every officer of the grouping who

is in default shall be liable to a penalty and, for every day during which

the default continues, to a further penalty as established in the Schedule

to these regulations.

Each member of the grouping shall be entitled to obtain

information from the manager concerning the business of the grouping

and to inspect the books and business records of the grouping.

(1) The profits resulting from a grouping’s activities shall

be deemed to be the profits of the members and shall be apportioned

among them in the proportions laid down in the contract or, in the

absence of any such provision, in equal shares.

(2) The members of a grouping shall contribute to the

payment of the amount by which expenditure exceeds income in the

proportions laid down in the contract or, in the absence of such provision,

in equal shares.

(1) Any EEIG establishment situated in Malta but having

its official address in another Member State shall deliver, within one

EEIG whose official

month of the establishment becoming so situated in Malta, to the

Registrar for registration, a certified copy of the contract together with

a certified translation into English of the contract and other documents

and particulars to be filed in accordance with these regulations if the

contract and other documents and particulars, or any part thereof, are

not in English.

(2) The Registrar shall not register an EEIG establishment

under this regulation unless he is satisfied that all the requirements of

these regulations in respect of registration and of matters precedent and

incidental to it have been complied with.

(3) Subject to sub-regulation (3) of this regulation, the

Registrar shall retain the copy of the contract and any certified

translation, delivered to him in accordance with sub-regulation (1) above

and register the EEIG establishment.

(4) If default is made in complying with the provisions of

sub-regulation (1) of this regulation, every officer of the grouping who

is in default shall be liable to a penalty and, for every day during which

the default continues, to a further penalty as established in the Schedule

to these regulations.

(1) Where any provision of these regulations provides for

the imposition of a penalty as established in the Schedule to these

regulations, the amount of such penalty shall be determined by reference

to such Schedule, which specifies the maximum penalty that may be

imposed by the Registrar for non-compliance with the relevant provision.

(2) The first column of the said Schedule indicates the

provision of these regulations which imposes a penalty, the second

column gives a general description of the infringement, which

description shall not be relied on in interpreting any provision of these

regulations, the third column establishes the maximum penalty and the

fourth column establishes 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 these regulations shall be prescribed by the lapse of five years

from the day on which the default occurs.

(4) The provisions of article 401 of the Act shall, mutatis

mutandis, apply to administrative penalties under these regulations.

Save in so far as inconsistent with the provisions of these Applicablity of

certain provisions of

regulations or of the EC Regulation, Title II of Part V of the Act shall the Act.

apply to EEIG’s, and their establishments, registered under these

regulations as if they were companies registered under the Act and as if

any reference to a director included a reference to a manager of the

EEIG and any other person who has or has had control or management

of the EEIG’s business

Any person shall be entitled to -

Inspection of

documents.

(a) inspect any documents or particulars kept by the

Registrar under these regulations or a copy thereof< and

(b) request the Registrar to supply copies, including certified

copies, of any such document or particulars or any part thereof

against payment of the fee prescribed under the Act.

(1) The Registrar shall cause to be published in the Gazette– Publication of

documents.

(a) the particulars which must be included in the contract

for the formation of a grouping, in accordance with the provisions

of regulation 7 of these regulations, and any amendments thereto<

(b) the number, date and place of registration as well as

notice of the termination of the grouping<

(c) in the case of those documents and particulars referred

to in paragraphs (b) to (i) of sub-regulation (1) of regulation 8 of

these regulations a notice, stating the name of the EEIG, the

description of the documents or particulars and the date of receipt.

(2) The Registrar shall also forward to the Office for Official

Publications of the European Community notice of the formation or

dissolution of a grouping, together with its number, date and place of

registration, within one month of the publication of the relevant

documents and particulars in the Gazette.

(1) The purpose of these regulations is to apply the relevant

provisions of EC Regulation 2137/85, and these regulations shall be

interpreted accordingly.

(2) In the event that any of the provisions of these regulations

conflict with the provisions of the EC Regulation, the latter shall prevail.