MT
223 tal-2004 - Merchant Shipping (Shipping Organisations - Private Companies) Regulations, 2004(English Version only)
Table of Provisions (180)
Statutory Text (180 Articles)
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Suppliment tal-Gazzetta tal-Gvern ta’ Malta, Nru. 17,574, 30 ta’ April, 2004
Taqsima B
L.N. 223 of 2004
MERCHANT SHIPPING ACT
(CAP. 234)
Merchant Shipping (Shipping Organisations - Private Companies)
Regulations, 2004
(1) These regulations shall be called the Merchant Title
commencement.
Shipping (Shipping Organisations - Private Companies) Regulations,
2004. (2) The Merchant Shipping (Shipping Organisations –
Private Companies) Regulations, 2004 shall come into effect on the
1 st May 2004 except as hereunder provided.
(3) The regulations shall apply to shipping companies Shipping
formed and registered under the Commercial Partnerships Ordinance companies
under the
with effect from the 1 st August 2004
Commercial
Partnerships
Ordinance.Cap.
168. Provided that should a shipping company elect to be
governed by the Companies Act, it shall file a notice in accordance Cap. 386.
with the provisions of paragraph (4) of this regulation and these
regulations shall not apply to such shipping companies.
(4) (a) Any shipping company which is registered and
existing as of the 30 th April, 2004 which elects to be governed
by the Companies Act shall file a notice to that effect in terms
of the Ninth Schedule to these regulations by not later than the
1 st August, 2004.
(b) In such event, the company shall be bound to comply
with the Companies Act within ninety days from the filing of
the notice with the Registrar of Companies.
(c) In the event of the company failing to comply with
the requirements of the Companies Act within the said time
limit, the company shall be regulated by the Regulations with
effect from the 1 st August, 2004 and the filing of the notice
shall have no effect.
PART I
PRELIMINARY PROVISIONS
(Regulation 16)
PART I - MODEL REGULATIONS FOR THE MANAGEMENT OF A
SHIPPING 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 regulation 31 of the Merchant Shipping
(Shipping Organisations – Private Companies) Regulations, (hereinafter referred
to as “the 2004 regulations”), 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 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 model 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 regulation
29 of the 2004 regulations. 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. If a share certificate
be defaced, lost or destroyed, it may be renewed on application of the member on
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such terms (if any) as to evidence and indemnity and the payment of out-of-pocket
expenses of the company of investigating evidence as the directors think fit.
Calls on shares
6. The board of directors may from time to time make calls upon the members
in respect of any moneys unpaid on their shares. A call may be revoked, modified
or postponed as the directors may determine. Any member shall be entitled to at
least 7 days notice.
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 the payment thereof, the person from whom the sum is due shall pay
interest thereon from the day appointed for payment thereof to the time of actual
payment at such rate not exceeding two per cent 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 model 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 model 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 made and duly 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 interest at such rate not
exceeding eight per cent, as may be agreed upon between the directors and the
member 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.
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13. Subject to such of the restrictions of these model 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 recognize 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 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.
19. 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. 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
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Provided always that the directors may at any time give notice requiring any
such person 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.
21. In respect of a share held jointly by several persons 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 registered holder of the share so held.
Pledging of Securities
22. (a) The members may enter into any agreement relating to the pledging
of their shares or the creation of any rights in connection with the said shares
for any reason they may deem fit and with such third parties as they deem
appropriate.
(b) The holders of other securities issued by the company may enter
into any agreement relating to the pledging of their securities or the creation
of any rights in connection with the said shares for any reason they may deem
fit and with such third parties as they deem appropriate.
(c) Upon the company being notified of such a pledge agreement, the
company shall record that fact in its register of members or debenture holders
and the company shall recognize all rights thereby granted to any third parties
and shall act according to and consistently with the terms of such agreement
in all matters.
(d) In so far as and to the extent that such pledge vests third parties
with rights pertaining to the shares or debentures normally exercisable by the
members or debenture holders as the case may be, such rights shall be
exercisable by third parties as though they were the members or debenture
holders of the company to the exclusion of the registered member or members
or registered holders of securities.
Failure to pay upon call
23. Where a member fails to pay up such part of any share after a call has
been made to this effect such member shall be liable to the company and the
company may sue the member for the collection of a civil debt.
General meetings
24. Subject to the provisions of the 2004 regulations the annual general
meetings shall be held at such time and place as the directors may appoint.
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25. The directors may, whenever they think fit, convene an extraordinary
general meeting, and extraordinary general meetings shall be so convened on such
requisition, or, in default, may be convened by such requisitionists, as provided by
regulation 44 of the 2004 regulations.
Notice of General Meetings
26. 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 2004 regulations 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 called if it is so agreed by all the members entitled to attend and vote
thereat.
27. 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
28. 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.
29. 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 members
present shall be a quorum.
30. 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
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of the meeting or is unwilling to act, the directors present shall elect one of their
number to be chairman of the meeting.
31. 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 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.
32. 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.
33. At any general meeting a resolution put to the vote of the meeting
shall be approved by more than 50% of the voting rights in the company unless a
higher majority is required by the memorandum and articles.
The demand for a poll may be withdrawn
34. In the case of an equality of votes, the chairman of the meeting shall
be entitled to a second or casting vote.
Votes of members
35. Subject to any rights or restrictions for the time being attached to any
class or classes of shares, every member shall have one vote for each share of
which he is the holder.
36. 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.
37. No objection shall be raised to the qualification of any voter except at
the meeting or adjourned meeting at which the vote objected 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.
38. 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 of authority shall, as far as possible, be deposited at the registered office of
the company or at such other place as is specified for the purpose in the notice
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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, in order to allow time for the
verification of the authenticity of the instrument by the chairman and in default,
saving verifiable proof of the authenticity of the instrument satisfactory to the
chairman, the chairman shall be entitled in his sole discretion, to refuse the proxy.
39. An instrument appointing a proxy shall be in the following form or a
form as near thereto as circumstances permit
………………………………….(name of company)
“ I / We … … … … … … … … … … … … o f … … … … … … … … … … … … . … …
residing at…………………………………………………………………… being a
member/members of the above-mentioned company, hereby appoint
………………………………….of……………………………………………….or
failing him…………………of…………………………………………………as
my/our proxy to vote for me/us on my/our behalf at the (annual or extraordinary,
as the case may be) general meeting of the company, to be held on the
…………………………day of …………….. 2……, and at any adjournment
thereof.
Signed this ………….. day of …………………. 2…….
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
40. 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.
41. 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.
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Powers and duties of directors
42. The directors shall exercise their powers subject to any of these model
regulations, to the provisions of the 2004 regulations 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.
43. The directors shall have the 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 model 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 to
delegate all or any of the powers, authorities and discretions vested in him.
44. 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.
45. 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.
Proceedings of directors
46. 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 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.
47. 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
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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.
48. 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.
49. A director may appoint any other person to act as his alternate by
means of a written instrument. Such person so appointed shall enjoy all powers of
the director. “Written instruments” include for this purpose an appointment by fax,
e-mail or letter.
50. 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.
Secretary
51. The directors may appoint a secretary for such term, at such
remuneration and upon such conditions as they may think fit; and any secretary so
appointed may be removed by them
Provided that no person shall be appointed or hold office as secretary who
is the sole director of the company.
Dividends and reserve
52. The company in general meeting may declare dividends, but no
dividend shall exceed the amount recommended by the directors.
53. 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.
54. 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.
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55. 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 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.
56. 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.
57. No dividend shall bear interest against the company.
Accounts
58. Subject to the provisions of regulation 76 of the 2004 regulations, the
directors shall from 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
59. 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
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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.
Indemnity
60. Every managing director, director holding any other executive office
or other director, and every agent, auditor or secretary and in general any officer
for the time being of the company shall be indemnified out of 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 – MODEL REGULATIONS FOR THE MANAGEMENT OF A
SINGLE MEMBER COMPANY
1. The regulations contained in Part I of these Model Regulations shall
apply subject to the following modifications.
2. The company is a single member company and accordingly -
(a) any decision required to be taken by the single member in general
meeting shall be taken in the form of a written resolution passed by the single
member.
(b) the single member minutes shall be recorded in the minute book in
terms of regulation 63 of the 2004 regulations.
3. Regulations 24 to 39 of these Model Regulations both inclusive shall not
apply.
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These regulations shall apply to any organisation formed Purpose.
as a private limited liability company and qualifying as a shipping
organisation in terms of article 84Z of the Merchant Shipping Act Cap. 234
unless it ceases to so qualify.
(Regulation 66)
FORM AND CONTENT OF INDIVIDUAL ACCOUNTS
PART I - GENERAL RULES AND FORMATS
General rules
1. (1)
Subject to the following provisions of this Schedule -
(a) every balance sheet of a company shall show the items listed in
either of the balance sheet formats set out immediately following paragraph
13 of this Schedule; and
(b) every profit and loss account of a company shall show the items
listed in any one of the profit and loss account formats set out immediately
following the balance sheet formats;
in either case in the order and under the headings and sub-headings given in the
format adopted. For this purpose the words in brackets against the headings, the
sub-headings and the items are explanatory and do not have to be reproduced in
the individual accounts.
(2) Sub-paragraph (1) of this paragraph is not to be read as requiring
any item, or the heading or sub-heading for any item, to be distinguished by any
letter or number assigned thereto in the format adopted.
2. (1) Where in accordance with paragraph 1 of this Schedule a company’s
balance sheet or profit and loss account for any accounting period has been prepared
by reference to one of the formats set out herein, the directors of the company
shall adopt the same format in preparing the individual accounts for subsequent
accounting periods of the company unless in their opinion there are special reasons
for a change.
(2) Particulars of any change in the format adopted in preparing a
company’s balance sheet or profit and loss account in accordance with paragraph
1 of this Schedule shall be disclosed, and the reasons for the change shall be
explained, in the notes to the accounts drawn up when the new format is first
adopted.
3. (1) Any item required in accordance with paragraph 1 of this Schedule
to be shown in a company’s balance sheet or profit and loss account may be shown
in greater detail than required by the format adopted.
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(2) A company’s balance sheet or profit and loss account may include
an item representing or covering the amount of any asset or liability, income or
expenditure not otherwise covered by any of the items listed in the format adopted,
but the following shall not be treated as assets in a company’s balance sheet –
(a) expenses of and commission on any issue of shares or debentures;
and
(b) costs of research.
Any additional items as aforesaid shall be included under either an existing
heading or sub-heading or under a new heading or sub-heading as appropriate.
(3) The layout, nomenclature and terminology of items in the balance
sheet and profit and loss account that are preceded by Arabic numerals shall be
adapted where the special nature of an undertaking so requires.
(4) Items to which Arabic numbers are assigned in any of the formats
set out herein may be combined in a company’s individual accounts for any
accounting period if either -
(a) their individual amounts are not material to assessing the state of
affairs or profit or loss of the company for that accounting period; or
(b)
the combination facilitates that assessment;
but where paragraph (b) of this sub-paragraph applies, the individual amounts of
any items so combined shall be disclosed in the notes to the accounts.
(5) Save where there is a corresponding item for the preceding
accounting period, a balance sheet or profit and loss account item for which there
is no amount shall not be shown. In such case, the heading or subheading in respect
of that item shall also not be shown if that item is the only one under such heading
of subheading.
4. (1) In respect of every item shown in a company’s balance sheet or
profit and loss account or in the notes to the accounts, there shall also be shown the
corresponding amount for the accounting period immediately preceding that to
which the individual accounts relate.
(2) Where that corresponding amount is not comparable with the amount
to be shown for the item in question in respect of the accounting period to which
the individual accounts relate, the former amount shall be adjusted and particulars
of the adjustment and the reasons for it shall be disclosed in the notes to the accounts.
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5. Save as otherwise provided in this Schedule, any set-off between asset
and liability items, or between income and expenditure items, shall be prohibited.
6. (1) In determining whether particular assets are to be shown as fixed
assets or current assets reference shall be made to the purpose for which they are
intended.
(2) Fixed assets shall comprise those assets which are intended to be
held on a continuing basis in connection with the undertaking’s activities.
(3) 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.
(4) Own shares and shares in group undertakings may be shown only
under the items prescribed for that purpose.
7. (1) “Provisions for liabilities or charges” are intended to cover losses
or debts the nature of which is clearly defined and which at the date of the balance
sheet are either likely to be incurred, or certain to be incurred but uncertain as to
amount or as to the date on which they will arise.
(2) “Provisions for liabilities or charges” may not be used to adjust the
values of assets.
8. (1) “Associated undertaking” shall have the meaning assigned to it by
paragraph 21 of the Third Schedule to these Regulations.
(2) “Turnover” shall comprise the amounts derived from the sale of
products and the provision of services falling within the company’s ordinary
activities, after deduction of sales rebates and taxes directly linked to the turnover.
9. (1) Income and charges that arise otherwise than in the course of the
company’s ordinary activities shall be shown under “Extraordinary Income” and
“Extraordinary Charges”.
(2) Unless the income and charges referred to in sub-paragraph (1)
hereof are immaterial for the assessment of the results, explanations of their amount
and nature shall be given in the notes to the accounts. The same shall apply to
income and charges relating to another accounting period.
10. (1) Every profit and loss account of a company shall show the amount
of the company’s profit or loss on ordinary activities before taxation.
B
(2) Taxes on the profit or loss on ordinary activities and taxes on the
extraordinary profit or loss may be shown in total as one item in the profit and loss
account before “Other Taxes not shown under the above items”. In such a case
“Profit or Loss on Ordinary Activities after Taxation” shall be omitted from the
profit and loss account layouts prescribed in this Schedule.
(3) Where this derogation is applied there shall be disclosed in the notes
to the accounts the extent to which the taxes on the profit or loss affect the profit or
loss on ordinary activities and the extraordinary profit or loss.
11. Every profit and loss account of a company shall show separately as
additional items
(a) any amount set aside or proposed to be set aside to, or withdrawn or
proposed to be withdrawn from, reserves; and
(b)
the aggregate amounts of -
(i) any dividends paid; and
(ii) any dividends proposed.
12. (1) The provisions of this Schedule shall be interpreted to give a true
and fair view within the meaning of paragraph (3) of Regulation 66 of the
Regulations.
(2) Amounts which in the particular context of any provision of this
Schedule are not material may be disregarded for the purposes of that provision.
Required formats for accounts
13. References in this Schedule to the items listed in any of the formats set
out below are to those items read together with any of the notes in the formats
which apply to any of those items, and the requirement imposed by paragraph 1 to
show the items listed in any such format in the order adopted in the format is
subject to any provision in those notes for alternative positions for any particular
items.
BALANCE SHEET FORMATS - FORMAT 1
A. Called Up issued share capital not paid (may be shown in either of the
two positions herein)
B. Formation Expenses (may be shown as the first item under “Intangible
Assets”)
C. Fixed Assets
B
I. Intangible Assets
1. Development costs
2. Concessions, patents, licences, trade marks and similar rights and assets
(if these were acquired for valuable consideration and are not to be shown under
goodwill or these were created by the company itself)
3. Goodwill (only to the extent that this was acquired for valuable
consideration)
4. Payments on account
II. Tangible Assets
1. Land and buildings (including all rights on immovable)
2. Plant and machinery
3. Other fixtures, fittings, tools and equipment
4. Payments on account and tangible assets in the course of construction
III. Financial Assets
1. Shares in group undertakings
2. Loans to group undertakings
3. Shares in associated undertakings
4. Loans to associated undertakings
5. Other investments other than loans
6. Other loans
7. Own shares (the nominal value of the shares held shall be shown separately
in the notes to the accounts)
D. Current Assets
I. Stocks
l. Raw materials and consumables
2. Work in progress
3. Finished goods and goods for resale
4. Payments on account
II. Debtors (The amount falling due after more than one year shall be shown
separately for each item included under debtors)
l. Trade debtors
2. Amounts owed by group undertakings
3. Amounts owed by associated undertakings
4. Other debtors
5. Called up issued share capital not paid (may be shown in either of the
two positions herein)
6. Prepayments and accrued income (may be shown in either of the two
positions herein)
III. Investments
l. Shares in group undertakings
2. Own shares (the nominal value of the shares held shall be shown separately
in the notes to the accounts)
3. Other investments
IV. Cash at Bank and in Hand
E. Prepayments and Accrued Income (may be shown in either of the two
positions herein)
F. Creditors: Amounts falling due within One Year
1. Debenture loans (the amount of any convertible loans shall be shown
separately in the notes to the accounts)
2. Bank loans and overdrafts
3. Payments received on account (payments received on account of orders
shall be shown here in so far as they are not shown as deductions from
stocks)
4. Trade creditors
5. Bills of exchange payable
6. Amounts owed to group undertakings
7. Amounts owed to associated undertakings
8. Other creditors including taxation and social security (the amounts for
creditors in respect of taxation and social security shall be shown
separately from the amount for other creditors)
9. Accruals and deferred income
G. Net Current Assets/Liabilities (in determining the amount to be shown for
this item any amounts shown under “prepayments and accrued income” shall be
taken into account wherever shown)
H. Total Assets less Current Liabilities
I. Creditors: Amounts Falling due after more than One Year
1. Debenture loans (the amount of any convertible loans shall be shown
separately in the notes to the accounts)
2. Bank loans and overdrafts
3. Payments received on account (payments received on account of
orders shall be shown here in so far as they are not shown as
deductions from stocks)
4. Trade creditors
5. Bills of exchange payable
6. Amounts owed to group undertakings
7. Amounts owed to associated undertakings
8. Other creditors including taxation and social security (the amounts
for creditors in respect of taxation and social security shall be shown
separately from the amount for other creditors)
9. Accruals and deferred income
J.
Provisions for Liabilities and Charges
1. Pensions and similar obligations
B
2. Taxation, including deferred taxation
3. Other provisions
K. Capital and Reserves
I. Called Up Issued Share Capital (in addition, the amount of the issued
share capital and the amount of the called up issued share capital which
has been paid up shall be shown separately in the notes to the accounts)
II. Share Premium Account
III. Revaluation Reserve
IV. Other Reserves
1. Capital redemption reserve
2. Reserve for own shares
3. Reserves provided for by the articles of association
4. Other reserves
V. Profit and Loss Account
BALANCE SHEET FORMATS - FORMAT 2
ASSETS
A. Called Up Issued Share Capital not Paid (may be shown in either of the
two positions herein)
B. Formation Expenses (may be shown as the first item under “Intangible
Assets”)
C. Fixed Assets
I.
Intangible Assets
1. Development costs
2. Concessions, patents, licences, trade marks and similar rights and assets
(if these were acquired for valuable consideration and are not to be
shown under goodwill or if these were created by the company itself)
3. Goodwill (only to the extent that this was acquired for valuable
consideration)
4. Payments on account
II.
Tangible Assets
1. Land and buildings (including all rights on immovables)
2. Plant and machinery
3. Other fixtures, fittings, tools and equipment
4. Payments on account and tangible assets in the course of construction
III. Financial Assets
1. Shares in group undertakings
2. Loans to group undertakings
3. Shares in associated undertakings
4. Loans to associated undertakings
5. Other investments other than loans
6. Other loans
7. Own shares (the nominal value of shares held shall be shown separately)
D. Current Assets
I. Stocks
1. Raw materials and consumables
2. Work in progress
3. Finished goods and goods for resale
4. Payments on account
II. Debtors (the amount falling due after more than one year shall be shown
separately for each item included under debtors)
l. Trade debtors
2. Amounts owed by group undertakings
3. Amounts owed by associated undertakings
4. Other debtors
5. Called up issued share capital not paid (may be shown in either of the
two positions herein)
6. Prepayments and accrued income (may be shown in either of the two
positions herein)
III. Investments
1. Shares in group undertakings
2. Own shares (the nominal value of the shares held shall be shown
separately)
3. Other investments
IV.
Cash at Bank and in Hand
E. Prepayments and Accrued Income (may be shown in either of the two
positions herein)
LIABILITIES
A. Capital and Reserves
I. Called Up Issued Share Capital (in addition, the amount of the issued
share capital and the amount of the called up issued share capital which
has been paid up shall be shown separately)
II.
Share Premium Account
III.
Revaluation Reserve
IV. Other Reserves
l. Capital redemption reserve
2. Reserve for own shares
3. Reserves provided for by the articles of association
B
4. Other reserves
Profit and Loss Account
Provisions for Liabilities and Charges
1. Pensions and similar obligations
2. Taxation, including deferred taxation
3. Other provisions
C. Creditors (amounts falling due within one year and after one year shall
be shown separately for each of these items and their aggregate shall be shown
separately for all of these items in the notes to the accounts)
1. Debenture loans (the amounts of any convertible loans shall be shown
separately in the notes to the accounts)
2. Bank loans and overdrafts
3. Payments received on account (payments received on account of orders
shall be shown here in so far as they are not shown as deductions from
stocks)
4. Trade creditors
5. Bills of exchange payable
6. Amounts owed to group undertakings
7. Amounts owed to associated undertakings
8. Other creditors including taxation and social security (the amount for
creditors in respect of taxation and social security shall be shown
separately from the amount for other creditors)
9. Accruals and deferred income (may be shown in either of the two
positions herein)
D. Accruals and Deferred Income (may be shown in either of the two
positions herein)
PROFIT AND LOSS ACCOUNT FORMATS - FORMAT 1
1. Turnover
2. Cost of sales (after taking into account any necessary provisions for
depreciation or diminution in the value of assets)
3. Gross profit or loss
4. Distribution costs (after taking into account any necessary provisions
for depreciation or diminution in the value of assets)
5. Administrative expenses (after taking into account any necessary
provisions for depreciation or diminution in the value of assets)
6. Other operating income
7. Income from shares in group undertakings
8. Income from shares in associated undertakings
9. Income from other financial fixed assets (income, including interest,
derived from group undertakings shall be shown separately from income
derived from other sources)
10. Other interest receivable and similar income (interest and similar income
derived from group undertakings shall be shown separately from that
derived from other sources)
11. Amounts written off in respect of financial fixed assets and investments
held as current assets
12. Interest payable and similar charges (the amount payable to group
undertakings shall be shown separately)
13. Tax on profit or loss on ordinary activities
14. Profit or loss on ordinary activities after taxation
15. Extraordinary income
16. Extraordinary charges
17. Extraordinary profit or loss
18. Tax on extraordinary profit or loss
19. Other taxes not shown under the above items
20. Profit or loss for the accounting period
The amount of any provisions for depreciation and diminution in the value of
tangible and intangible fixed assets, including formation expenses, falling to be
shown under items 7(a) and A. 4(a) respectively in Formats 2 and 4 shall be
disclosed in the notes to the accounts in any case where the profit and loss account
is prepared by reference to this Format.
PROFIT AND LOSS ACCOUNT FORMATS - FORMAT 2
1. Turnover
2. Change in stocks of finished goods and in work in progress
3. Own work capitalised
4. Other operating income
5. (a) Raw materials and consumables
(b) Other external charges
6. Staff costs
(a) wages and salaries
(b) social security costs
(c) other pension costs
7. (a) Depreciation and other amounts written off tangible and intangible
fixed assets, including formation expenses
(b) Exceptional amounts written off current assets
8. Other operating charges
9. Income from shares in group undertakings
10. Income from shares in associated undertakings
B
11. Income from other financial fixed assets (income, including interest,
derived from group undertakings shall be shown separately from income
derived from other sources)
12. Other interest receivable and similar income (interest and similar income
derived from group undertakings shall be shown separately from that
derived from other sources)
13. Amounts written off in respect of financial fixed assets and investments
held as current assets
14. Interest payable and similar charges (the amount payable to group
undertakings shall be shown separately)
15. Tax on profit or loss on ordinary activities
16. Profit or loss on ordinary activities after taxation
17. Extraordinary income
18. Extraordinary charges
19. Extraordinary profit or loss
20. Tax on extraordinary profit or loss
21. Other taxes not shown under the above items
22. Profit or loss for the accounting period
PROFIT AND LOSS ACCOUNT FORMATS - FORMAT 3
Charges
1. Cost of sales (after taking into account any necessary provisions for
depreciation or diminution in the value of assets)
2. Distribution costs (after taking into account any necessary provisions
for depreciation or diminution in the value of assets)
3. Administrative expenses (after taking into account any necessary
provisions for depreciation or diminution in the value of assets)
4. Amounts written off in respect of financial fixed assets and investments
held as current assets
5. Interest payable and similar charges (the amount payable to group
undertakings shall be shown separately)
6. Tax on profit or loss on ordinary activities
7. Profit or loss on ordinary activities after taxation
8. Extraordinary charges
9. Tax on extraordinary profit or loss
10. Other taxes not shown under the above items
11. Profit or loss for the accounting period
B. Income
l. Turnover
2. Other operating income
3. Income from shares in group undertakings
4. Income from shares in associated undertakings
B
5. Income from other financial fixed assets (income, including interest,
derived from group undertakings shall be shown separately from income
derived from other sources)
6. Other interest receivable and similar income (interest and similar income
derived from group undertakings shall be shown separately from that
derived from other sources)
7. Profit or loss on ordinary activities after taxation
8. Extraordinary income
9. Profit or loss for the accounting period
The amount of any provisions for depreciation and diminution in the value of
tangible and intangible fixed assets, including formation expenses, falling to be
shown under items 7 (a) and A. 4(a) respectively in Formats 2 and 4 shall be
disclosed in the notes to the accounts in any case where the profit and loss account
is prepared by reference to this Format.
PROFIT AND LOSS ACCOUNT FORMATS - FORMAT 4
A.
Charges
l.
Reduction in stocks of finished goods and in work in progress
2. (a) Raw materials and consumables
(b) Other external charges
3. Staff costs
(a) wages and salaries
(b) social security costs
(c) other pension costs
4. (a) Depreciation and other amounts written off tangible and intangible
fixed assets, including formation expenses
(b) Exceptional amounts written off current assets
5. Other operating charges
6. Amounts written off in respect of financial fixed assets and investments
held as current assets
7. Interest payable and similar charges (the amount payable to group
undertakings shall be shown separately)
8. Tax on profit or loss on ordinary activities
9. Profit or loss on ordinary activities after taxation
10. Extraordinary charges
11. Tax on extraordinary profit or loss
12. Other taxes not shown under the above items
13. Profit or loss for the accounting period
B. Income
1. Turnover
2. Increase in stocks of finished goods and in work in progress
3. Own work capitalised
4. Other operating income
5. Income from shares in group undertakings
B
6. Income from shares in associated undertakings
7. Income from other financial fixed assets (income, including interest,
derived from group undertakings shall be shown separately from income
derived from other sources)
8. Other interest receivable and similar income (interest and similar income
derived from group undertakings shall be shown separately from that
derived from other sources)
9. Profit or loss on ordinary activities after taxation
10. Extraordinary income
11. Profit or loss for the accounting period
PART II - ACCOUNTING PRINCIPLES AND RULES
Accounting principles
14. Items shown in the individual accounts shall be valued in accordance with
the following general principles -
(a) the company must be presumed to be carrying on its business as a
going concern;
(b) the methods of valuation must be applied consistently from one
accounting period to another;
(c) valuation must be made on a prudent basis, and in particular
(i) only profits realised at the balance sheet date may be included
in the profit and loss account,
(ii) account shall be taken of all foreseeable liabilities and potential
losses arising in the course of the accounting period concerned
or of a previous one, even if such liabilities or losses become
apparent only between the date of the balance sheet and the
date on which it is drawn up,
(iii) account must be taken of all depreciation whether the result
of the accounting period is a loss or a profit;
(d) account must be taken of income and charges relating to the
accounting period, irrespective of the date of receipt or payment
of such income or charges;
(e) the components of asset and liability items must be valued
separately;
(f) the opening balance sheet for each accounting period must
correspond to the closing balance sheet for the preceding
accounting period.
Historical cost accounting rules
15. (1) Formation expenses shown as assets in the balance sheet shall be
written off within a maximum period of five years.
(2) The amounts entered under “Formation Expenses” shall be
explained in the notes to the accounts.
16. (1) In the case of any fixed asset which has a limited useful economic
life, the amount of -
(a)
its purchase price or production cost; or
(b)
where it is estimated that any such asset will have a residual value
at the end of the period of its useful economic life, its purchase
shall be reduced by provisions for depreciation calculated to write off that amount
systematically over the period of the asset’s useful economic life. Such provisions
shall be charged in the profit and loss account.
(2) The purchase price of an asset shall be determined by adding to the actual
(3) The production cost of an asset shall be determined by adding to the
purchase price of the raw materials and consumables used the amount of the costs
incurred by the company which are directly attributable to the production of that
(4) In addition to the costs specified in subparagraph (3) of this paragraph
there may be included in the production cost of an asset -
(a) a reasonable proportion of the costs incurred by the company which
are only indirectly attributable to the production of that asset, but
only to the extent that they relate to the period of production; and
(b) interest on capital borrowed to finance the production of that asset, to
the extent that it relates to the period of production. The inclusion of
such interest and the amount thereof shall be disclosed in the notes to
the accounts.
(5) Fixed asset investments shall be accounted for in accordance with the
following rules
(a)
such investments shall be included in the company’s individual
accounts by using the cost method
Provided that in the case of participating interests the equity method
may be used as embodied in paragraphs 20 and 21 to the Third Schedule
of these Regulations;
(b)
the cost method referred to in sub-paragraph 5 (a) of this paragraph
is a method of accounting whereby the investment is recorded at
cost. The profit and loss account reflects income from the investment
only to the extent that distributions are received or are receivable
by the investor from accumulated net profits of the investment arising
subsequent to the date of acquisition;
(c)
when the equity method of accounting is used in the case of
participating interests the provisions of sub-paragraph 6 hereof shall
apply mutatis mutandis and references to consolidated accounts,
B
consolidated balance sheet, consolidated profit and loss account and
notes to the consolidated accounts shall be construed accordingly;
(d)
where the proportion of the profit attributable to participating
interests exceeds the amount of dividends which are already received
or the payment of which can be claimed, the amount of the difference
shall be placed in a reserve which shall not be distributed to the
shareholders.
17. (1) Where a financial fixed asset has diminished in value, provision
for diminution in value may be made in respect of it and the amount to be included
in respect of it may be reduced accordingly. Any such provisions shall be charged
in the profit and loss account and if not shown separately in the profit and loss
account, shall be disclosed (either separately or in aggregate) in the notes to the
accounts.
(2) Provision for diminution in value shall be made in respect of any
fixed asset which has diminished in value if the reduction in its value is expected
to be permanent (whether its economic life is limited or not), and the amount to be
included in respect of it shall be reduced accordingly. Any such provision shall be
charged in the profit and loss account and if not shown separately in the profit and
loss account, shall be disclosed (either separately or in aggregate) in the notes to
the accounts.
(3) Where the reasons for which any provision was made in accordance
with sub-paragraph (1) or (2) of this paragraph have ceased to apply to any extent,
that provision shall be written back to the extent that it is no longer necessary. Any
amounts written back in accordance with this sub-paragraph which are not shown
separately in the profit and loss account shall be disclosed (either separately or in
aggregate) in the notes to the accounts.
18. (1) Notwithstanding that an item in respect of “development costs” is
included under “fixed assets” in the balance sheet formats contained in this
Schedule, an amount may only be included in a company’s balance sheet in respect
of development costs in special circumstances.
(2) If any amount is included in the company’s balance sheet in respect
of development costs the following information shall be given in the notes to the
accounts
(a)
the period over which the amount of those costs originally capitalised
is being or is to be written off; and
(b) the reasons for capitalising the development costs in question.
19. (1) Where goodwill is treated as an asset the following provisions of
this paragraph shall apply.
B
(2) Subject to sub-paragraphs (3) and (4) of this paragraph, the amount
of the consideration for any goodwill acquired by a company shall be reduced by
provisions for amortisation calculated to write off that amount systematically over
a period chosen by the directors of the company.
(3) The period chosen shall not exceed the useful economic life of the
goodwill in question.
(4) In any case where any goodwill acquired by a company is shown or
included as an asset in the company’s balance sheet the period chosen for writing
off the consideration for that goodwill and the reasons for choosing that period
shall be disclosed in the notes to the accounts.
20. (1)
Subject to the following paragraph, assets which fall to be
included -
(a)
amongst the fixed assets of a company under the item “tangible
assets”; or
(b)
amongst the current assets of a company under the item “raw
materials and consumables”,
may be included at a fixed quantity and value.
(2) Sub-paragraph (1) of this paragraph applies to assets of a kind which are
constantly being replaced, where -
(a)
their overall value is not material to assessing the company’s state
of affairs; and
(b)
their quantity, value and composition are not subject to material
variation.
21. (1) Subject to sub-paragraphs (2) and (3) of this paragraph, the amount
to be included in respect of any current asset shall, insofar as it is applicable, be its
purchase price or production cost.
(2) If the net realisable value of any current asset is lower than its
purchase price or production cost, the amount to be included in respect of that
asset shall be the net realisable value.
(3) Where the reasons for which any provision for diminution in value
made in accordance with sub-paragraph (2) of this paragraph have ceased to apply
to any extent, that provision shall be written back to the extent that it is no longer
necessary.
B
22. The method of determination of purchase price and the method of
determination of production cost given in paragraph 16 of this Schedule shall apply
for the purposes of paragraph 21 of this Schedule. Furthermore, distribution costs
may not be included in production costs.
23. (1) Subject to the qualification mentioned in sub-paragraph (3) of this
paragraph, the purchase price or production cost of -
(a)
any assets which fall to be included under any item shown in a
company’s balance sheet under the sub-heading “stocks”; and
(b)
any assets which are fungible assets (including investments),
shall be determined by the application of one of the methods mentioned in
subparagraph (2) of this paragraph in relation to any such assets of the same class.
(2)
The methods referred to in sub-paragraph (1) of this paragraph are
-
(a)
the method known as “first in, first out” (FIFO);
(b)
the weighted average price method; and
(c)
any other method similar to any of the methods mentioned above.
(3) The method actually chosen for the purposes of this paragraph shall
be the one which appears to the directors to be appropriate in the circumstances of
the company.
(4)
Where in the case of any company -
(a)
the purchase price or production cost of assets falling to be included
under any item shown in the company’s balance sheet has been
determined by the application of any method permitted by this
paragraph; and
(b)
the amount shown in respect of that item differs materially from
the relevant alternative amount given in sub-paragraph (5) of this
paragraph,
the amount of that difference shall be disclosed in the notes to the accounts.
(5) Subject to sub-paragraph (6) of this paragraph, for the purposes of
subparagraph (4) (b) of this paragraph, the relevant alternative amount, in relation
to any item shown in a company’s balance sheet, is the amount which would have
been shown in respect of that item if assets of any class included under that item at
an amount determined by any method permitted by this paragraph had instead
been included at their replacement cost as at the balance sheet date.
B
(6) The relevant alternative amount may be determined by reference to
the most recent actual purchase price or production cost before the balance sheet
date of assets of any class included under the item in question instead of by reference
to their replacement cost as at that date, but only if the former appears to the directors
of the company to constitute the more appropriate standard of comparison in the
case of assets of that class.
(7) For the purpose of this paragraph, assets of any description shall be
regarded as fungible if assets of that description are substantially indistinguishable
one from another.
24. (1) Where the amount repayable on any debt owed by a company is
greater than the value of the consideration received in the transaction giving rise
to the debt, the amount of the difference may be treated as an asset.
(2) Where any amount as referred to in sub-paragraph (1) of this
paragraph is treated as an asset -
(a) it shall be written off by reasonable amounts each year;
(b) it shall be completely written off before repayment of the debt; and
(c) if the current amount is not shown as a separate item in the company’s
balance sheet it shall be disclosed in the notes to the accounts.
25. (1) Provisions for liabilities and charges may not exceed in amount
the sums which are reasonably necessary.
(2) Particulars shall be given of each provision included in the item
“other provisions” in the company’s balance sheet in any case where the amount
of that provision is material.
Alternative accounting rules
26. (1) Subject to paragraphs 28, 29 and 30 of this Schedule, the amounts
to be included in respect of assets of any description mentioned in paragraph 27 of
this Schedule shall be determined on any basis mentioned in that paragraph.
(2) References in paragraphs 27 to 30 of this Schedule to “the depreciation
rules” are to the rules embodied in paragraphs 16, 17, 18, 20, 21 and 24 of this
Schedule.
27. (1) Tangible fixed assets may be included at a market value determined
as at the date of their last valuation.
(2) Investments of any description falling to be included under either
of the balance sheet formats contained in Part I of this Schedule may be included
either -
B
(a)
at a market value determined as at the date of their last valuation;
or
(b)
at a value determined on any basis which appears to the directors to
be appropriate in the circumstances of the company,
but in the latter case particulars of the method of valuation, etc., adopted and of the
reasons for adopting it shall be disclosed in the notes to the accounts.
28. (1) Where the value of any asset of a company is determined on the
basis mentioned in paragraph 27 of this Schedule that value shall be the starting
point for determining the amount to be included in respect of that asset in the
company’s individual accounts, instead of its purchase price or production cost or
any value previously so determined for that asset; and the depreciation rules shall
apply accordingly in relation to any such asset with the substitution for any reference
to its purchase price or production cost by a reference to the value most recently
determined for that asset on any basis mentioned in paragraph 27 of this Schedule.
(2) The amount of any provision for depreciation required in the case
of any fixed asset as it applies by virtue of sub-paragraph (1) of this paragraph is
referred to in sub-paragraph (3) of this paragraph as the adjusted amount, and the
amount of any provision which would be required in respect of that asset according
to the historical cost accounting rules is referred to as the historical cost amount.
(3) Where sub-paragraph (1) of this paragraph applies in the case of
any fixed asset, the amount of any provision for depreciation in respect of that
asset -
(a)
included in any item shown in the profit and loss account in respect
of amounts written off against the assets of the description in
question; or
(b)
taken into account in stating any item so shown which is required
by the explanatory notes in the profit and loss account formats
contained in Part I of this Schedule to be stated after taking into
account any necessary provisions for depreciation or diminution in
the value of assets included under it,
may be the historical cost amount instead of the adjusted amount, provided that
the amount of any difference between the two is accounted for in the profit and
loss account and disclosed separately therein or in the notes to the accounts.
29. (1) This paragraph applies where the amounts to be included in respect
of assets covered by any items shown in a company’s individual accounts have
been determined on any basis mentioned in paragraph 27 of this Schedule.
B
(2) The items affected and the basis of valuation adopted in determining the
amounts of the assets in question in the case of each of such items shall be disclosed
in the notes to the accounts.
(3)
In the case of each balance sheet item which is affected -
(a)
the comparable amounts determined according to the historical cost
accounting rules; or
(b) the differences between those amounts and the corresponding
amounts actually shown in the balance sheet in respect of that item,
shall be shown separately in the balance sheet or in the notes to the accounts.
(4) In sub-paragraph (3) of this paragraph, references in relation to any
item to the comparable amounts determined as mentioned thereto are references
to-
(a)
the aggregate amount which would be required to be shown in
respect of that item if the amounts to be included in respect of all
the assets covered by that item were determined according to the
historical cost accounting rules; and
(b) the aggregate amount of the cumulative provisions for depreciation
or diminution in value which would be permitted or required in
determining those amounts according to those rules.
30. (1) With respect to any determination of the value of an asset of a
company on any basis mentioned in paragraph 27 of this Schedule the amount of
any profit or loss arising from that determination shall be credited or, as the case
may be, debited to a separate reserve to be called “the revaluation reserve”, after
allowing, where appropriate, for any provisions for depreciation or diminution in
value made otherwise than by reference to the value so determined and for any
adjustments of any such provisions made in the light of that determination.
(2) The amount of the revaluation reserve shall be shown in the
company’s balance sheet under a separate sub-heading in the position given for
the item “revaluation reserve” in Format 1 or 2 of the balance sheet formats
contained in this Schedule, but need not be shown under that name.
(3) The revaluation reserve shall be reduced to the extent that the
amounts standing to the credit of the reserve are in the opinion of the directors of
the company no longer necessary for the purpose of the accounting policies adopted
by the company; but an amount may only be transferred from that reserve to the
profit and loss account if -
(a)
the amount in question was previously charged to that account; or
B
(b)
it represents realised profit.
(4) Any amounts transferred from the revaluation reserve to the profit
and loss account in accordance with the provisions of sub-paragraph (3) of this
paragraph shall be shown separately in the profit and loss account.
(5) Notwithstanding the provisions of sub-paragraph (3) of this
paragraph the balance standing to the credit of the revaluation reserve may be
capitalised in whole or in part at any time.
(6) The treatment for taxation purpose of amounts credited or debited
to the revaluation reserve shall be disclosed in the notes to the accounts.
PART III - THE NOTES TO THE ACCOUNTS
31. Any information required in the case of any company by the provisions
of this paragraph shall, if not given in the balance sheet or the profit and loss
account, be given by way of the notes to the accounts. The information in respect
of the following matters shall be provided as a minimum -
(a)
The valuation methods applied to the various items in the individual
accounts, and the methods employed in calculating the provisions
for depreciation and diminution in value. For items included in the
individual accounts which are or were originally expressed in
foreign currency, the bases of translation used to express them in
local currency shall be disclosed;
(b)
The number and the nominal value of the shares subscribed during
the accounting period within the limits of the authorised capital;
(c)
Where there is more than one class of shares, the number and the
nominal value for each class, in respect of both the authorised and
the issued shares;
(d)
The existence of any participation certificates, convertible
debentures or similar securities or rights, with an indication of their
number and the rights they confer;
(e)
Information concerning the acquisition by a company of its own
shares, either itself or through a person acting in his own name but
on the company’s behalf, relating to -
(i)
the reasons for acquisitions made during the accounting period;
(ii)
the number and nominal value of the shares acquired and
disposed of during the accounting period and the proportion
of the issued share capital which they represent;
(iii)
in the case of acquisition or disposal for a value, the
consideration for the shares;
(iv)
the number and nominal value of all the shares acquired and
held by the company and the proportion of the issued share
capital which they represent;
(f)
The name, registered office and the type of each of the partnerships
of which the company is a member with unlimited liability; provided
that this information may be omitted if it is not material;
(g) Information in respect of each item which is or would but for
subparagraph (4) (b) of paragraph 3 of this Schedule be shown under
the general item “fixed assets” in the company’s balance sheet,
relating to -
(i)
the amount of the purchase price or production cost, leaving
out therefrom the depreciation or diminution in value in respect
of that item, as at the date of the beginning of the accounting
period and as at the balance sheet date respectively;
(ii)
the effect on any amount shown in the balance sheet in respect
of that item of -
-
any revision of the amount in respect of any assets included
under that item made during that period,
-
acquisitions during that period of any assets,
-
disposals during that period of any assets, and
-
any transfers of assets of the company to and from that
item during that period;
(h)
In respect of each item within indent (g) of this paragraph -
(i)
the cumulative amount of provisions for depreciation or
diminution in the value of assets included under that item as
at each date mentioned in indent (g) (i) of this paragraph;
(ii)
the amount of any such provisions made in respect of the
accounting period;
(iii)
the amount of any adjustments made in respect of any such
provisions during the period in consequence of the disposal
of any assets; and
B
(iv)
the amount of any other adjustments made in respect of any
such provisions during the period;
(i)
The information required to be disclosed by virtue of indents (g)
and (h) of this paragraph shall also be provided in the case of
“Formation Expenses” where this item is shown separately from
“Fixed Assets” in the balance sheet;
(j)
Amounts owed by the company and becoming due and payable after
more than five years as well as the company’s entire debts covered
by valuable security furnished by the company with an indication
of the nature and form of the security. This information shall be
disclosed separately for each creditor’s item, as provided for in the
formats described in Part I of this Schedule;
(k)
The total amount of any financial commitments that are not included
in the balance sheet, in so far as this information is of assistance in
assessing the financial position. Any commitments concerning
pensions and group undertakings shall be disclosed separately;
(l)
The turnover within the meaning of paragraph 8 of this Schedule,
broken down by categories of activity and into geographical market
in so far as, taking account of the manner in which the sale of
products and the provision of services falling within the company’s
ordinary activities are organised, these categories and markets differ
substantially from one another.
(m) The average number of persons employed during the accounting
period, 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 as otherwise required by Formats
2 and 4 of the profit and loss account;
(n) The difference between the tax charged for the accounting period
and for earlier accounting periods and the amount of tax payable in
respect of those periods, provided that this difference is material for
purposes of future taxation. This amount may also be disclosed in
the balance sheet as a cumulative amount under a separate item with
an appropriate heading;
(o)
(i)
The aggregate amount of the emoluments granted in respect
of the accounting period to the directors of a company for
their services as directors of that company or for their services
as directors of any of its subsidiary undertakings, while acting
as directors of that company; and
(ii)
The aggregate amount of any other emoluments granted in
respect of the accounting period to the directors of a company
for their services in connection with the management of the
affairs of the company or any of its subsidiary undertakings,
while acting as directors of that company; and shown
separately from the aggregate amount of emoluments referred
to in item (i) above; and
(iii)
The fact that the company has during the accounting period
purchased or maintained any such insurance as is referred to
in paragraph (2) of regulation 62 and the aggregate amount
of premiums paid in respect thereof.
In this indent emoluments shall include the remuneration
for the services of the directors referred to herein and all fees,
percentages, gifts, compensation for loss of office and other
similar payments; as well as any commitments arising or
entered into in respect of retirement pensions, superannuation
allowances, gratuities or other similar commitments in favour
of former directors of the company referred to herein.
The commitments arising or entered into in respect of
retirement pensions, superannuation allowances, gratuities
or other similar commitments in favour of former directors
of the company shall be shown separately from the other
emoluments.
(p)
The amount of advances and credits granted to directors of a
company with indications of the interest rates, main conditions and
any amounts repaid; as well as commitments entered into on their
behalf by way of guarantees of any kind. The said commitments
shall be shown separately;
(q)
The name and registered office of the undertaking which draws up
the consolidated accounts of the largest body of undertakings of
which the company forms part as a subsidiary undertaking;
(r)
The name and the registered office of the undertaking which draws
up the consolidated accounts of the smallest body of undertakings
of which the company forms part as a subsidiary undertaking; and
(s)
Where the parent companies referred to in indents (q) and (r) of
this paragraph are not registered in Malta the place where copies
of the consolidated accounts referred to in these indents may be
obtained, provided that they are available to the public.
B
32. (1) If at the end of its accounting period, the company has one or
more subsidiary undertakings or participating interests in other undertakings the
following information shall, where applicable, be given with respect to each such
(a)
the kind, name and registered or principal office of each undertaking;
(b)
in relation to the shares of each class of each undertaking held by
the company, the identity of each class and the proportion of the
nominal value of the issued shares of that class represented by the
shares held as at the end of the undertaking’s relevant accounting
period; and
(c)
the aggregate amount of the capital and reserves of each undertaking
as at the end of its relevant accounting period, and its profit or loss
for that period.
(2) For the purposes of sub-paragraph (1) of this paragraph the relevant
accounting period is -
(a)
if the accounting period of the undertaking ends with that of the
company giving the information in its notes to the accounts, that
accounting period; and
(b)
if not, the undertakings accounting period ending last before the
end of the accounting period of the company giving that information.
(3) The provisions of sub-paragraph (1) of this paragraph are subject
to the exceptions and other provisions contained in paragraphs 33 and 34 of this
33. (1) The information otherwise required by sub-paragraph (1) (c) of
paragraph 32 of this Schedule need not be given in respect of a subsidiary
undertaking of a company if either -
(a)
the company is exempt from the requirement to prepare consolidated
accounts; or
(b)
the company prepares consolidated accounts and -
(i)
the accounts of the subsidiary undertaking are included in the
consolidated accounts, or
(ii)
the investment of the company in the shares of the subsidiary
undertaking is included in the consolidated accounts, or in the
B
notes of the consolidated accounts, by way of the equity method
of accounting.
(2) The information otherwise required by sub-paragraph (1) (c) of
paragraph 32 of this Schedule need not be given in respect of another undertaking
in which the company holds shares if the company’s investment in those shares is
included in the individual accounts, or in the notes to the accounts, by way of the
equity method of accounting.
(3) The information otherwise required by sub-paragraph (1) (c) of
paragraph 32 of this Schedule need not be given in respect of any undertaking if -
(a)
the undertaking is not required by any provision of these Regulations
to deliver a copy of its balance sheet for its relevant accounting
period mentioned in paragraph 32 of this Schedule and does not
otherwise publish that balance sheet in Malta or elsewhere; and
(b)
the shares held by the company, either directly or indirectly, in that
undertaking amount to less than one half in nominal value of the
undertaking’s issued share capital.
(4) Information otherwise required by sub-paragraph (1) of paragraph
32 of this Schedule need not be given if it is not material.
(5) References in this paragraph and in paragraph 32 of this Schedule to
shares of undertakings shall include references to beneficial interests in undertakings
where the capital of such undertakings is not divided into shares.
34. (1) The information referred to in paragraphs 32 and 33 of this
Schedule may be disclosed in a separate statement which is to be filed with the
Registrar together with the individual accounts of the company in accordance with
Regulation 77 of these Regulations.
(2) Where the information referred to in sub-paragraph (1) of this
paragraph is disclosed in a separate statement this fact shall be disclosed in the
notes to the accounts.
(3) The information referred to in indent (1) of paragraph 31 and in
paragraphs 32 and 33 of this Schedule may be omitted when it appears to the
directors that their nature is such that they would be seriously prejudicial to any of
the undertakings affected by these provisions and the Registrar agrees that the
information need not be disclosed.
(4) Where any information is omitted from the notes to the accounts
by virtue of the provisions of sub-paragraph (3) of this paragraph that fact shall be
disclosed in the notes to the accounts.
B
35. (1) Particulars shall be given in the notes to the accounts of any charge
on the assets of the company to secure the liabilities of any other person including,
where practicable, the amount secured.
(2) The following information shall be given with respect to any other
contingent liability not provided for other than where the possibility of a loss is
judged by the directors of the company to be remote -
(a) the amount or estimated amount of that liability;
(b) its legal nature; and
(c) whether any valuable security has been provided by the company
in connection with that liability and if so, what valuable security
has been so provided.
(3)
There shall be stated, where practicable -
(a)
the aggregate amount or estimated amount of contracts for capital
expenditure, so far as not provided for; and
(b)
the aggregate amount or estimated amount of capital expenditure
authorised by the directors which has not been contracted for.
(4) Commitments within any of the preceding sub-paragraphs of this
paragraph undertaken on behalf of or for the benefit of a group undertaking shall
be stated separately from the other commitments within that sub-paragraph.
36. (1)
Where any amount is transferred -
(a)
to or from any reserves; or
(b)
to any provision for liabilities or charges; or
(c)
from any provision for liabilities and charges otherwise than for
the purpose for which the provision was established,
and the reserves or provisions are shown as separate items in the company’s balance
sheet or in the notes to the accounts, the information mentioned in sub-paragraph
(2) of this paragraph shall be given in respect of the aggregate of reserves or
provisions included in the same item.
(2) That information to which reference is made in sub-paragraph (1) of
this paragraph is -
(a)
the amount of the reserves or provisions as at the date of the
beginning of the accounting period and as at the balance sheet date
respectively;
(b) any amounts transferred to or from the reserves or provisions during
that period; and
(c) the source and application respectively of any amounts so
transferred.
B
PART IV - TRANSITIONAL ARRANGEMENT
37. (1) If, when individual accounts are drawn up in accordance with the
provisions of this Schedule for the first time, the purchase price or production cost
of a fixed asset cannot be determined without undue expense or delay, the net book
amount at the beginning of the accounting period may be treated as the purchase
(2) Any application of the sub-paragraph (1) of this paragraph shall be
disclosed in the notes to the accounts.
B
(1) In these regulations, unless the context otherwise
requires, the following expressions have the meaning hereby assigned
to them -
“the Act” means the Merchant Shipping Act;
“annual accounts” means the individual accounts required
by regulation 66 of these regulations;
“appointed day” means the date appointed by the Minister
for the coming into force of these regulations;
“auditor” means a person who is an individual who holds
a warrant to act as auditor issued under the Accountancy
Profession Act or is a partnership of auditors duly registered
under the said Act;
“body corporate” means any entity having a legal
personality distinct from that of its members, and includes a
foreign body corporate;
“certificate of registration”, when used in relation to a
company, means a certificate of registration issued under these
regulations and the Companies Act and the words “registration”,
“registered” and their derivatives shall be construed accordingly;
“company” means a company formed and registered under
Part III of these regulations;“court” means the Civil Court;
“debenture” includes debenture stock, bonds and any other
debt securities of a company;
“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 regulation 73 of these regulations;
“euro” refers to the currency unit of the participating states
in the European Monetary Union;
“expert”, except where otherwise specifically defined in
these regulations, means an auditor whether Maltese or foreign
and whether or not assisted by a specialist valuer;
“extraordinary resolution” has the meaning given to it by
regulation 50 of these regulations;
“in writing” includes any electronic representation except
in so far as relates to documents delivered to the Registrar for
registration;
“liri” means Maltese liri;
“member” means a shareholder of a company;
“notice” shall mean a notice in writing of any kind;
“officer” in relation to a company, means a director but
does not include an auditor;
“ordinary resolution” has the meaning given to it by
regulation 50 of these regulations;
“parent company” is a company which –
(a) has a majority of the members’ voting rights in
another undertaking (subsidiary undertaking); or
(b) 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
(c) has the right to exercise a dominant influence over
an undertaking (a subsidiary undertaking) of which it is a
member, pursuant to a contract entered into with that
undertaking or to a provision in that undertaking’s
memorandum or articles of association; or
(d) 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
(e) holds a participating interest in another undertaking
and actually exercises a dominant influence over the
undertaking (a subsidiary undertaking) or manages the
subsidiary undertaking on a unified basis together with it;
and the term “parent undertaking” shall be construed
accordingly;
“participating interest” shall mean 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 those undertakings’ activities. The
holding of twenty per cent of the capital of another undertaking
shall be presumed to constitute a participating interest unless
the contrary is shown. 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;
“private company” means a private company as defined in
regulation 6 of these regulations;
“Registrar” means the person appointed as Registrar of
Companies under the Companies Act;
“security” includes a share, debenture or any other similar
instrument issued by a company;
“share” includes stock except where a distinction between
stock and shares is express or implied;
“shareholder” means a person entered in the register of
members of a company pursuant to regulation 38 of these
regulations;
“true and fair view” in relation to accounts refers to the
requirements of paragraph (3) of regulation 66 of these
regulations.
(2) For the purposes of these regulations, 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.
(3) Where a matter is not specifically dealt with under
these regulations, reference shall be made to the provisions of the
Companies Act on such matter.
PART II
GENERAL PROVISIONS
(Regulation 68)
FORM AND CONTENT OF CONSOLIDATED ACCOUNTS
General rules
1. (1) Consolidated accounts shall comply so far as practicable with the
provisions of the Second Schedule as if the undertakings included in the
consolidation were a single company.
(2) In particular, without prejudice to the provisions of this Schedule
and taking account of the essential adjustments resulting from the particular
characteristics of consolidated accounts as compared with individual accounts, the
provisions of Part I of the Third Schedule shall apply in respect of the layout of
consolidated accounts.
(3) References to shares of undertakings in this Schedule shall include
references to beneficial interests in undertakings where the capital of such
undertakings is not divided into shares; and reference to “relevant shares”, “the
issue of equities shares”, “the issued share capital” and “the nominal value of the
equity shares” shall be construed accordingly.
2. The consolidated balance sheet and profit and loss account shall
incorporate in full the information contained in the individual accounts for the
undertakings included in the consolidation, subject to the adjustments if any, as
may be appropriate in accordance with generally accepted accounting principles
or practice.
3. (1) Consolidated accounts shall be drawn up as at the same date as the
individual accounts of the parent company.
(2) Notwithstanding the provisions of sub-paragraph (1) of this
paragraph, consolidated accounts may be drawn up on a date other than the date of
the individual accounts of the parent company where it appears to the directors of
the parent company that it is more appropriate to do so when taking account of the
balance sheet dates of the largest number and the most important of the subsidiary
undertakings included in the consolidation
Provided that such other date is within three months of the date of the
individual accounts of the parent company.
(3) Where consolidated accounts are drawn up on a date other than the
date of the individual accounts of the parent company in accordance with the
B
provisions of sub-paragraph (2) of this paragraph that fact shall be disclosed in the
notes to the consolidated accounts together with the reasons therefor.
(4) Account shall be taken of material matters, or disclosure made
of important events concerning the assets and liabilities, the financial position or
the profit or loss of an undertaking included in a consolidation which have occurred
between the undertaking’s balance sheet date and the consolidated balance sheet
date.
(5) Where a subsidiary undertaking’s balance sheet date precedes
the consolidated balance sheet date by more than three months, the undertaking
shall be consolidated on the basis of interim accounts drawn up as at the consolidated
balance sheet date.
4. (1) Assets and liabilities to be included in consolidated accounts shall
be valued according to uniform methods.
(2) Where assets and liabilities to be included in the consolidated
accounts have been valued or otherwise determined by undertakings according to
accounting rules differing from those used for the consolidated accounts, the values
or amounts shall be adjusted so as to accord with the rules used for the consolidated
accounts.
(3) If it appears to the directors of the parent company that there are
special reasons for departing from sub-paragraph (2) of this paragraph they may
do so, but particulars of any such departure, the reasons for it and its effect shall
be given in the notes to the consolidated accounts.
(4) The adjustments referred to in sub-paragraph (2) of this paragraph
need not be made if they are not material for the purpose of giving a true and fair
view.
(5) Any differences of accounting rules as between a parent company’s
individual accounts for an accounting period and its consolidated accounts shall
be disclosed in the notes to the consolidated accounts and the reasons for any such
differences given.
5. (1) The methods of consolidation shall be applied consistently from
one accounting period to another.
(2) Derogations from the provisions of sub-paragraph (1) of this
paragraph shall be permitted in exceptional cases. Any such derogations shall be
disclosed in the notes to the consolidated accounts and the reasons for such
derogations given together with the effect thereof on the assets, liabilities, financial
position and profit or loss of the undertakings included in the consolidation taken
as a whole.
B
(3) Where the composition of the undertakings included in a
consolidation has changed significantly in the course of an accounting period, the
consolidated accounts shall include information which makes the comparison of
successive sets of consolidated accounts meaningful.
6. (1) The provisions of this Schedule shall be interpreted to give a true
and fair view within the meaning of paragraph (3) of Regulation 68 of these
Regulations.
(2) Amounts which in the particular context of any provision of this
Schedule are not material may be disregarded for the purposes of that provision.
Elimination of group transactions
7. (1) Consolidated accounts shall show the assets, liabilities, financial
positions and profits or losses of the undertakings included in a consolidation as if
the latter were a single undertaking.
(2) Debts and claims between undertakings included in the
consolidation, and income and expenditure relating to transactions between such
undertakings, shall be eliminated in preparing the consolidated accounts.
(3) Where profits and losses resulting from transactions between
undertakings included in the consolidation are included in the book value of assets,
they will be eliminated in preparing the group accounts.
(4) Sub-paragraphs (2) and (3) of this paragraph need not be complied
with if the amounts concerned are not material for the purposes of giving a true
and fair view.
(5) The elimination required by sub-paragraph (3) of this paragraph
may be effected in proportion to the group’s interest in the shares of the
undertakings.
Acquisition and merger accounting
8. The provisions of paragraphs 9 to 17 of this Schedule apply where an
undertaking becomes a subsidiary undertaking of the parent company, which event
is referred to in those provisions as an “acquisition”, and references to the
“undertaking acquired” shall be construed accordingly.
9. An acquisition shall be accounted for by the acquisition method of
accounting unless the conditions for accounting for it as a merger are met and the
merger method of accounting is adopted.
10. (1)
The acquisition method of accounting is as detailed in this
paragraph.
(2) The identifiable assets and liabilities of the undertaking acquired
shall be included in the consolidated balance sheet at their fair values as at the date
of acquisition.
In this paragraph the term “identifiable” assets or liabilities of the
undertaking acquired means the assets or liabilities which are capable of being
disposed of or discharged separately, without disposing of a business of the
undertaking.
(3) The income and expenditure of the undertaking acquired shall be
brought into the consolidated accounts only as from the date of the acquisition.
(4) There shall be set off against the acquisition cost of the interest in
the shares of the undertaking held by the parent company and its subsidiary
undertakings, the interest of the parent company and its subsidiary undertakings in
the adjusted capital and reserves of the undertaking acquired.
For the purpose of this sub-paragraph -
“the acquisition cost” means the amount of any cash consideration and
the fair value of any other consideration, together with such amount, if any, in
respect of fees and other expenses of the acquisition as the company may
determine, and “the adjusted capital and reserves” of the undertaking acquired
means its capital and reserves at the date of the acquisition after adjusting the
identifiable assets and liabilities of the undertaking to fair values as at that
date.
(5) The amount resulting from the set off provided for in sub-paragraph
(4) of this paragraph, if positive, shall be treated as goodwill and, if negative, as a
negative consolidation difference.
(6) Goodwill shall be dealt with in accordance with the rules laid down
in paragraph 19 of the Second Schedule.
11. (1)
The conditions for accounting for an acquisition as a merger are -
(a) that at least ninety per cent of the nominal value of the relevant
shares in the undertaking acquired is held by or on behalf of the parent company
and its subsidiary undertakings;
(b) that the proportion referred to in paragraph (a) was attained pursuant
to an arrangement providing for the issue of equity shares by the parent
company or one or more of its subsidiary undertakings; and
B
(c) that the fair value of any consideration other than the issue of equity
shares given exceed ten per cent of the nominal value of the equity shares
issued.
(2) The reference in sub-paragraph (a) of paragraph (1) to the “relevant
shares” in an undertaking acquired is to those carrying unrestricted rights to
participate both in distributions and in sharing of assets by members in the event
of the undertaking’s winding up.
12. (1)
The merger method of accounting shall be as specified in this
paragraph.
(2) The assets and liabilities of the undertaking acquired shall be brought
into the consolidated accounts at the figures at which they stand in the undertaking’s
accounts, subject to any adjustment permitted or required by this Schedule.
(3) The income and expenditure of the undertaking acquired shall be
included in the consolidated accounts for the entire accounting period, including
the period before the acquisition.
(4) The consolidated accounts shall show corresponding amounts
relating to the previous accounting period as if the undertaking acquired had been
included in the consolidation throughout that year.
(5)
There shall be set off against the aggregate of -
(a)
the appropriate amount in respect of shares issued by the parent
company or its subsidiary undertakings in consideration for the
acquisition of shares in the undertaking acquired; and
(b)
the fair value of any other consideration for the acquisition of shares
in the undertaking acquired, determined as at the date when those
shares were acquired,
the nominal value of the issued share capital of the undertaking acquired held by
the parent company and its subsidiary undertakings.
(6) The resulting amount shall be shown as an adjustment to the
consolidated reserves.
13. (1) Where a group is acquired, paragraphs 10 to 12 of this Schedule
apply with the adaptations set out in this paragraph.
(2) Reference to shares of the undertaking acquired shall be construed
as references to shares of the parent undertaking of the group.
B
(3) Other references to the undertaking acquired shall be construed as
references to the group; and references to the assets and liabilities, income and
expenditure and capital and reserves of the undertaking acquired shall be construed
as references to the assets and liabilities, income and expenditure and capital and
reserves of the group after making the set-offs and other adjustments required by
this Schedule in the case of consolidated accounts.
14. (1) The information detailed in this paragraph with respect to
acquisitions taking place in the accounting period shall be given in the notes to the
consolidated accounts.
(2)
There shall be stated -
(a)
the name of the undertaking acquired or, where a group was acquired,
the name of the parent company of that group and the address of the
registered or principal office of such undertaking, and
(b)
the effective date of the acquisition for accounting purposes, and
(c)
whether the acquisition has been accounted for by the acquisition
or the merger method of accounting,
and in relation to an acquisition which significantly affects the figures shown in
the consolidated accounts, further information shall be given in accordance with
sub-paragraph (3) to (7) of this paragraph.
(3) The composition and fair value of the consideration for the
acquisition given by the parent company and its subsidiary undertakings shall be
stated.
(4) Where the acquisition method of accounting has been adopted, the
book values immediately prior to the acquisition, and the fair values at the date of
acquisition, of each class of assets and liabilities of the undertaking or group
acquired shall be stated in tabular form, including a statement of the amount of
any goodwill or negative consolidation difference arising on the acquisition, together
with an explanation of any significant adjustments made and in the case of goodwill
the treatment thereof and the period of amortisation, where applicable.
(5) Where the merger method of accounting has been adopted, an
explanation shall be given of any significant adjustments made in relation to the
amounts of the assets and liabilities of the undertaking or group acquired, together
with a statement of any resulting adjustment to the consolidated reserves, including
the re-statement of the opening consolidated reserves.
B
(6) Where the merger method of accounting has been adopted there
shall be stated details of the profit or loss of the undertaking or group acquired for
the period from the beginning of the accounting period of the undertaking or, as
the case may be, of the parent company of the group, up to the date of the acquisition
and there shall also be stated the date on which the said accounting period began.
(7) In ascertaining for the purposes of sub-paragraphs (4), (5) and (6)
of this paragraph, the profit or loss of a group, the book values and fair values of
assets and liabilities of a group or the amount of the assets and liabilities of a
group, there shall be made the set-offs and other adjustments required by this
Schedule in the case of consolidated accounts.
15. (1) There shall also be stated in the notes to the consolidated accounts
the cumulative amount of goodwill resulting from acquisitions in that and earlier
accounting periods which has been written off.
(2) The figure required to be stated by sub-paragraph (1) of this
paragraph shall be shown net of any goodwill attributable to subsidiary undertakings
or businesses disposed of prior to the balance sheet date.
16. (1) Where during the accounting period there has been a disposal of
an undertaking or group which significantly affects the figures shown in the
consolidated accounts, there shall be stated in the notes to the consolidated accounts-
(a)
the name of that undertaking or, as the case may be, of the parent
company of that group, and
(b)
the extent to which the profit or loss shown in the consolidated
accounts is attributable to profit or loss of that undertaking or group.
17. The information required by paragraphs 14, 15 or 16 of this Schedule
need not be disclosed with respect to an undertaking which -
(a)
is established under the law of a country outside Malta, or
(b)
carries on business outside Malta,
if in the opinion of the directors of the parent company the disclosure would be
seriously prejudicial to the business of that undertaking or to the business of the
parent company or any of its subsidiary undertakings, and the Registrar agrees
that the information should not be disclosed.
B
Minority interests
18. (1) The amount attributable to shares in subsidiary undertakings
included in the consolidation held by persons other than the undertakings included
in the consolidation shall be shown in the consolidated balance sheet as a separate
item with an appropriate heading.
(2) The amount of any profit or loss on ordinary activities attributable
to shares in subsidiary undertakings included in the consolidation held by persons
other than the undertakings included in the consolidation shall be shown in the
consolidated profit and loss account as a separate item with an appropriate heading.
(3) The amount of any profit or loss on extraordinary activities
attributable to shares in subsidiary undertakings included in the consolidation held
by persons other than the undertaking included in the consolidation shall be shown
in the consolidated profit and loss account as a separate item with an appropriate
heading.
Interest in subsidiary undertakings excluded from consolidation
19. The interest of the group in subsidiary undertakings excluded from
consolidation under paragraph (5) of regulation 67 of these Regulations and the
amount of profit or loss attributable to such an interest, shall be shown in the
consolidated balance sheet and in the consolidated profit and loss account
respectively by the equity method of accounting.
Joint ventures
20. Where an undertaking included in the consolidation manages another
undertaking jointly with one or more undertakings not included in the consolidation,
that other undertaking (“the joint venture”) may, if it is not a subsidiary undertaking
of the parent company and has not been treated as an associated undertaking within
the terms of paragraph 21 of this Schedule be included in the consolidated accounts
in proportion to the rights in its capital held by the undertaking included in the
consolidation (referred to as : proportional consolidation).
Associated undertakings
21. (1) Where an undertaking included in a consolidation exercises a
significant influence over the operating and financial policy of an undertaking not
included in the consolidation (an associated undertaking) in which it holds a
participating interest, that participating interest shall be shown in the consolidated
balance sheet as a separate item with an appropriate heading.
B
(2) An undertaking shall be presumed to exercise a significant influence
over another undertaking where it has twenty per cent or more of the shareholders’
or members’ voting rights in the undertaking.
(3) The provisions of the Sixth Schedule to these Regulations shall be
taken into account in determining for the purposes of this paragraph, whether an
undertaking holds twenty per cent or more of the voting rights in another
undertaking.
(4) The proportion of the profit or loss of the associated undertakings
attributable to such participating interests shall be shown in the consolidated profit
and loss account as a separate item under an appropriate heading.
(5) The elimination referred to in sub-paragraph (2) of paragraph 7 of
this Schedule shall be effected in so far as the facts are known or can be ascertained.
Such elimination need not be effected however, where the amounts concerned are
not material for the purposes of providing a true and fair view.
(6) When the provisions of this paragraph are applied for the first time
to a participating interest covered by sub-paragraph (1) of this paragraph that
participating interest shall be shown in the consolidated balance sheet at its book
value calculated in accordance with the valuation rules laid down in the Second
Schedule to these Regulations. The difference between that value and the amount
corresponding to the proportion of capital and reserves represented by that
participating interest shall be disclosed separately in the consolidated balance sheet
or in the notes to the consolidated accounts. That difference may be calculated as
at the date at which that method is used for the first time or as set out in sub-
paragraph (7) of this paragraph.
(7) The difference referred to in sub-paragraph (6) of this paragraph
may be calculated as at the date of acquisition of the shares or, where they were
acquired in two or more stages, as at the date on which the undertaking became an
associated undertaking.
(8) Where an associated undertaking’s assets or liabilities have been
valued by methods other than those used for the consolidation, they shall for the
purpose of calculating the difference referred to in sub-paragraph (6) of this
paragraph, be revalued by the methods used for consolidation
Provided that the directors of a company to which regulation 67 of these
Regulations applies may decide not to carry out such revaluation in which case
that fact shall be disclosed in the notes to the consolidated accounts.
(9) The book value referred to in sub-paragraph (6) of this paragraph
above shall be increased or reduced by the amount of any variation which has
B
taken place during the accounting period in the proportion of the associated
undertaking’s capital and reserves represented by that participating interest;
moreover it shall be reduced by the amount of the dividends relating to that
participating interest.
(10) In so far as the positive difference referred to in sub-paragraph (6)
of this paragraph cannot be related to any category of assets or liabilities it shall be
dealt with in accordance with the rules laid down for the item “goodwill” within
the Second Schedule to these Regulations. Such a positive difference may, however,
if the directors of the companies to which regulation 67 of these Regulations applies
so determine, be immediately and clearly deducted from reserves.
(11) Where an associated undertaking draws up consolidated accounts,
the provisions of this paragraph shall apply to the capital and reserves shown in
such consolidated accounts.
(12) The provisions of this paragraph need not be applied where the
participating interest in the capital of the associated undertaking is not material for
the purposes of giving a true and fair view.
Information by way of notes to the consolidated accounts
22. In addition to the information required under any other provisions of
this Schedule, the notes to the consolidated accounts shall, at least, set out
information in respect of the following matters -
(1) The valuation methods applied to the various items in the
consolidated accounts, and the methods employed in calculating the value
adjustments. For items included in the consolidated accounts which are or were
originally expressed in foreign currency the basis of conversion used to express
them in the currency in which the consolidated accounts are drawn up shall be
disclosed.
(2)
(a) The names and addresses of the registered or principal offices
of the undertakings included in the consolidation; the proportion of
the capital held in undertakings included in the consolidation, other
than the parent undertaking, by the undertakings included in the
consolidation; which of the conditions referred to in the definition
of parent company, in paragraph (2) of regulation 3 of these
Regulations, has formed the basis on which the consolidation has
been carried out.
The latter disclosure may, however, be omitted where
consolidation has been carried out in the case of a subsidiary
undertaking in which the parent company has a majority of the
B
shareholders’ or members’ voting rights and where the proportion
of the capital and the proportion of the voting rights held are the
same.
(b)
The information set out in paragraph (a) of this sub-paragraph in so
far as it is applicable shall be given in respect of undertakings
excluded from a consolidation pursuant to the provisions of
paragraphs (3) to (7) of regulation 67 and an explanation must be
given for the exclusion of the undertakings referred to in paragraph
(5) of that regulation.
(3)
(a) The names and registered or principal offices of undertakings
associated with an undertaking included in the consolidation as
described in paragraph 21 of this Schedule 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.
(b)
The information set out in paragraph (a) of this sub-paragraph shall
be given in respect of the associated undertakings referred to in
sub-paragraph (12) of paragraph 21, of this Schedule together with
the reasons for applying that provision.
(4) The names and registered or principal offices of undertakings
proportionally consolidated pursuant to paragraph 20, the factors on which joint
management is based, and the proportion of their capital held by the undertakings
of this Schedule included in the consolidation or by persons acting in their own
names but on behalf of those undertakings.
(5) The names and registered or principal office of each of the
undertakings, other than those referred to in sub-paragraphs (2), (3) and (4) of
paragraph, in which undertakings included in the consolidation and those excluded
pursuant to paragraph (5) of regulation 67, either themselves or through persons
acting in their own names but on behalf of those undertakings, hold at least twenty
per cent of the capital showing the proportion of the capital held, the amount of the
capital and reserves, and the profit or loss for the latest accounting period of the
undertaking concerned for which accounts have been adopted. Where this
information is considered by the directors of a company to which regulation 67 of
these Regulations applies not to be material for the purposes of giving a true and
fair view it may be omitted. 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 and where less than fifty per cent of its capital is held,
directly or indirectly, by the above mentioned undertakings.
(6) The average number of persons employed during the accounting
period by undertakings to which paragraph 20 of this Schedule has been applied
shall be disclosed separately.
B
(7) The amount of the emoluments paid in respect of the accounting
period to the members of the board of directors of the parent company by reason of
their responsibilities in the parent company and its subsidiary undertakings, and
any commitments arising or entered into under the same conditions in respect of
retirement pensions for former members of those bodies, with an indication of the
total for each category.
(8) The amount of advances and credits granted to the board of directors
of the parent company by that undertaking or by one of its subsidiary undertakings,
with indications of the interest rates, main conditions and any amounts repaid, as
well as commitments entered into on their behalf by way of guarantee of any kind
with an indication of the total for each category.
(9) Sub-paragraphs (7) and (8) of this paragraph shall apply to the
exclusion of the corresponding provisions of the Second Schedule to these
Regulations.
23. (1) The information contained in sub-paragraphs (2), (3) and (4) of
paragraph 22 of this Schedule may be disclosed in a separate statement which is to
be filed with the Registrar together with the annual accounts of the parent company
in accordance with Regulation 79 of these Regulations.
(2) Where this information is set out in a separate statement as provided
in sub-paragraph (1) of this paragraph this fact shall be disclosed in the notes to
the consolidated accounts.
24. (1) The information contained in sub-paragraphs (2), (3) and (4) of
paragraph 22 of this Schedule may be omitted when it appears to the directors of a
company to which Regulation 67 of these Regulations applies that the nature of
the information is such that it would be seriously prejudicial to any of the
undertakings affected by these provisions, and the Registrar agrees that the
information should not be disclosed.
(2) Where any information is omitted from the notes to the consolidated
accounts by virtue of the provisions of previous sub-paragraph (1) of this paragraph
this fact shall be disclosed in the said notes to the consolidated accounts.
B
A company to which these regulations apply has a legal Legal personality.
personality distinct from that of its member or members, and such
legal personality shall continue until the name of the company is
struck off the register, whereupon the company ceases to exist.
(Regulation 73)
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;
and
(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.
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
(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;
(c)
the number and nominal value of the shares so acquired by the
company or acquired by another person in such circumstances and
so charged respectively during the accounting period;
(d)
the maximum number and nominal value of shares which, having
been so acquired by the company, acquired by another person in
such circumstances or so charged, whether or not during that period,
are held at any time by the company or that other person during that
period;
(e)
the number and nominal value of the shares so acquired by the
company, acquired by another person in such circumstances or so
charged, whether or not during that period, which are disposed of
by the company or cancelled by the company during that period;
(f)
where the number and nominal value of the shares of any particular
description are stated in pursuance of any of the preceding
subparagraphs, the percentage of the called-up share capital which
shares of that description represent;
(g)
where any of the shares have been so charged the amount of the
charge in each case; and
(h)
where any of the shares have been disposed of by the company for
the person who acquired them in such circumstances for money or
money’s worth, the amount or value of the consideration in each
case.
4. The director’s report shall also state the number and nominal value of all
the parent company’s shares held by that company itself or by subsidiary
undertakings of that company
Provided that the particulars referred to in this paragraph need not be
shown in the directors’ report if they are included in the notes to the accounts.
B
(1) In all its business letters and order forms a company Indication of
particulars in
shall mention in legible characters its name, the fact that it is a limited business letters,
etc.
liability company, its registered office and registration number.
(2) Where a company is being wound up, every letter,
invoice or other document by or on behalf of the company, being a
document on or in which the name of the company appears, shall in
addition to the requirements of the preceding paragraph of this
regulation, contain a statement that the company is being wound up
and shall contain the names of the liquidators.
(3)
If default is made in complying with the provisions
of paragraphs (1) and (2) of this regulation every officer or liquidator,
as the case may be, of the company who is in default shall be liable
to a penalty.
PART III
FORMATION OF COMPANIES
Chapter I - Private Companies
(Regulation 80)
Company No. …………………….
CONTENTS AND FORM OF ANNUAL RETURN
ANNUAL RETURN of ……………………………………………………………………
………………………………………………………………………
…………………………………………………(name of 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 TYPED FORM
B
2. Summary of Share Capital and Debentures
All Maltese liri amounts are to be preceded by the symbol Lm. Symbols used for other currencies
are to be indicated (where applicable).
Currency
Symbol
………………………………….
………………………………….
………………………………….
………………………………….
………………………………….
………………………………….
………………………………….
………………………………….
(a)
Nominal Share Capital
Nominal Share Capital Lm……………………………………divided into
(Insert number and class)
……………
………………………..
shares of …………………………….. each
……………. ……………………….
shares of …………………………… each
……………. ……………………….
shares of …………………………… each
……………. ……………………….
shares of …………………………… each
(b)
Issued Share Capital and Debentures
Number
Class
Number of shares of each class taken up to
……………… ………………shares
the date of this return (which number must
……………… ………………shares
agree with the total shown on the list as held
……………… ………………shares
by existing members).
……………… ………………shares
Number of shares of each class issued as
Issued as paid up to the extent of ……….
partly paid up and extent to which each such
per share ………………. ……
shares
share is so paid up.
Issued as paid up to the extent of ……….
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
Number of shares of each class issued as
……………… ………………shares
fully paid up for a consideration other than
……………… ………………shares
cash.
……………… ………………shares
Number of shares of each class issued as
issued as paid up to the extent of ………per
partly paid up for a consideration other than
share …………………………...shares
cash and extent to which each such share is
issued as paid up to the extent of ………per
so paid up.
share …………………………...shares
issued as paid up to the extent of ………per
share …………………………...shares
issued as paid up to the extent of ………per
share …………………………...shares
B
Total number of shares of each class
Number
Class
forfeited.
..…………… ………………shares
……………… ………………shares
Total amount paid, if any, on shares forfeited. ……….. ……………… …………………………
B
Remarks
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
of the company by (a) persons who
Particulars of shares transferred or
transmitted causa mortis since the
date of the last return, or, in the case
are still members and (b) persons
of the first return, of the registration
who have ceased to be members * *
registration
of transfer
Date of
(b)
Account of Shares
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.
Number
(a)
#
Number of
shares held
date of return
by existing
members at
3. List of Past and Present Members
*#
Addresses (in the case of a body corporate, its registered office)
Names
register ledger
containing
particulars
Folio in
B
*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
# 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
** 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
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
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
shown separately. Where any shares have been converted into stock the amount of stock held by each member shall be shown.
3. List of Past and Present Members (cont. sheet)
Capital and Debentures to have been taken up.
transmission causa mortis).
B
(in the case of a body corporate, its registered office)
Usual residential address
Particulars of the persons who are directors of the company at the date of this return.
4. Particulars of Directors
Nationality
(in the case of an individual, name or names and surname.
In the case of a body corporate, the corporate name)
Name
B
(1) A private company is a company which, besides Definition.
fulfilling the requirements of these regulations 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 for sale to
the public; or
(c)
have the power to issue share warrants to bearer.
(3) Where a private company contravenes the provisions
of paragraph (2) of this regulation, every officer thereof who is in
default shall be liable to a penalty.
(Regulation 3)
EXPLANATION OF EXPRESSIONS USED IN PARAGRAPH (1) OF
REGULATION 3 OF THESE REGULATIONS AND PROVISIONS
SUPPLEMENTARY THERETO
Voting rights in an undertaking
1. (a) References to voting rights in an undertaking are to the rights
conferred on shareholders in respect of their shares or, in the case of an 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
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 attached to shares held by way of security
12. Rights attached to shares held by way of security shall be treated as held
by the person providing the security-
(a)
where, apart from the right to exercise them for the purpose of
preserving the value of the security, or of realising it, the rights are
exercisable only in accordance with the instructions of the person
providing the security; and
B
(b)
where the shares are held in connection with the granting of loans
as part of normal business activities and apart from the right to
exercise them for the purpose of preserving the value of the security,
or of realising it, the rights are exercisable only in the interests of
the person providing the security.
Rights attributed to parent undertaking
13. Rights shall be treated as held by a parent undertaking if they are held
by any of its subsidiary undertakings.
Disregard of certain rights
14. The voting rights in an undertaking shall be reduced by any rights held
by the undertaking itself.
Subject to the provisions of these regulations, 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.
FORMS
Form A
No. of Company ………………..
MERCHANT SHIPPING (Shipping Organisations – Private Companies)
REGULATIONS, 2004
Notice that a company has become a Single-Member Company
Pursuant to Regulation 8(2)
Name of Company ……………………………………………………………………………...
Delivered by …………………………………………………………………………………...
To the Registrar of Companies
(a)
………………………………………………………………………………………………...
hereby gives notice in accordance with Regulation 8 (2) of the Merchant Shipping (Shipping
Organisations – Private Companies) Regulations, 2004 that with effect
from……………………………………………………………………………………………..
it has become a single member company through the acquisition of all its shares by
(b)
……………………………………………………………………. as a result of transfer
inter vivos/transmission causa mortis*, and that the provisions of Regulation 8 have been
complied with.
Signature ……………………
Director/Secretary/Representative*
Dated this …………………… day of ………………………… of the year ………………………
This form must be completed in typed form.
(a)
State company name.
(b)
State name, residence and identification document number.
*
Delete as necessary.
B
Form B
No. of Company ………………………………
MERCHANT SHIPPING (Shipping Organisations – Private Companies)
REGULATIONS, 2004
Notice that a company has ceased to be a Single-Member Company
Pursuant to Regulation 8(6)
Name of Company ………………………………………………………………………………..
Delivered by ………………………………………………………………………………………
To the Registrar of Companies
(a)
……………………………………………………………………………………………………
hereby gives notice that it has ceased to be a single-member company with effect from the
………………………………………………..
Signature …………………………….
Director/Secretary/Representative*
Dated this ………………………… day of ……………………….. of the year ………………..
This form must be completed in typed form.
(a)
State company name.
*
Delete as necessary.
B
Form C
No. of Company……………………………………………
MERCHANT SHIPPING (Shipping Organisations – Private Companies) REGULATIONS,
Return of allotments of shares (a)
Pursuant to Regulation 25 (7)
Name of Company ........................................................................................................……………
Delivered by ..................................................................................................................……………
To the Registrar of Companies
Date/s on which the shares were allotted (complete (a) or (b) as applicable
a) on .............................................................................................................................. or
b) from ..................................................................... to ..................................................
A. This section must be completed for allotments made for cash
Description of shares (ordinary/preference/others)
Number of shares allotted
Nominal value of each share and
Premium (if any) on each share
Total amount paid on each share on account of
nominal value/premium
Amount due and payable (if any) on account of
nominal value/premium
B. This section must be completed for allotments made other than for cash
Description of shares (ordinary/preference/others)
Number of shares allotted
Nominal value of each share and
Premium (if any) on each share
Extent to which each share is to be treated as paid
up on account of nominal value/premium
Consideration for which the shares have been allotted
B
C. This section must be completed in all cases
Names and Addresses of the allottees
Number of share allotted
Ordinary
Preference
Others
TOTAL
Signature ...................................................
Director/Secretary/Representative*
Dated this ............................. day of ............................. of the year ..............................
This form must be completed in typed form.
(a)
To be delivered within one month.
*
Delete as necessary.
B
Form D
No. of Company …………………………….
MERCHANT SHIPPING (Shipping Organisations – Private Companies) REGULATIONS,
Notice of disclosure of financial assistance
Pursuant to Regulation 26(1)(b)
Name of Company …………………………………………………………………………………
Delivered by ……………………………………………………………………………………….
To the Registrar of Companies
I hereby give notice in accordance with Regulation 26(1)(b) of the Merchant Shipping (Shipping
Organisations – Private Companies) Regulations, 2004 that with effect
from……………………………………..the undermentioned financial assistance for the purpose
of an acquisition/subscription * of shares was made as follows
Signature ………………………………..
Dated this …………. day of …………….. of the year …………….
This form must be completed in typed form
* Delete as necessary.
B
Form E
Name of Company .....................................
MERCHANT SHIPPING (Shipping Organisations – Private Companies) REGULATIONS,
Notice of redemption of preference shares
Pursuant to Regulation 31 (5)
No. of Company .........................................................................................................
Delivered by ...............................................................................................................
To the Registrar of Companies
(a)
......................................................................................................................hereby gives notice in
accordance with Regulation 31 (5) of the Merchant Shipping (Shipping Organisations – Private
Companies) Regulations, 2004 that (b) .................. fully paid preference shares have been
redeemed and the price of redemption has been paid in full.
Names and address of holders of redeemed preference shares
Name
Address
No of shares redeemed
Class
TOTAL
Signature .............................................
Director/Secretary/Representative*
Dated this ................................ day of ................................ of the year ..................
This form must be completed in typed form.
(a)
State company name.
(b)
State number of shares.
*
Delete as necessary
B
Form F
No. of Company ..........................................
MERCHANT SHIPPING (Shipping Organisations – Private Companies) REGULATIONS,
Notice of transfer or transmission of shares
Pursuant to Regulation 36 (3)
Name of Company ....................................................................................................
Delivered by ..............................................................................................................
To the Registrar of Companies
(a)
.....................................................................................................................hereby gives notice in
accordance with Regulation 36 (3) of the Merchant Shipping (Shipping Organisations – Private
Companies) Regulations, 2004 that (b) .................
shares having a nominal value of
......................................... per share have been transferred/transmitted causa mortis* as indicated
hereunder.
Name and Address of
Name and Address of transferee/
No. of shares
Type and
transferor / deceased*
person entitled to shares
transferred /
Class of
transmitted
transmitted
shares
The above transfer/transmission causa mortis* of shares has been registered with the company/in
the name of the person entitled to be the registered holder *on the
Signature ................................................
Director/Secretary/Representative*
Dated this ............................ day of ................................ of the year ......................
This form must be completed in typed form.
(a)
State company name.
(b)
State number of shares.
*
Delete as necessary.
Form G
No. of Company ..........................................
MERCHANT SHIPPING (Shipping Organisations – Private Companies) REGULATIONS,
Notice of a pledge of securities
Pursuant to Regulation 37 (2)
Name of Company ....................................................................................................
Delivered by ...............................................................................................................
To the Registrar of Companies
I hereby give notice in accordance with Regulation 37(2) of the Merchant Shipping (Shipping
Organisations - Private Companies) Regulations, 2004 that with effect from
....................................................... the undermentioned securities have been pledged as follows
Pledgor
Pledgee
Securities
(Name and Address)
(Name and Address)
Number
Type
Signature ..............................................
Pledgor/Pledgee*
Dated this .............................. day of ............................ of the year ........................
This form must be completed in typed form.
*
Delete as necessary.
B
Form H
No of Company ................................
MERCHANT SHIPPING (Shipping Organisations – Private Companies) REGULATIONS,
Notice of termination of a pledge of securities
Pursuant to Regulation 37(13)
Name of Company ...............................................................................................................
Delivered by .........................................................................................................................
To the Registrar of Companies
I hereby give notice in accordance with Regulation 37 (13) of the Merchant Shipping (Shipping
Organisations – Private Companies) Regulations, 2004 that with effect from
.....................................................................................................the
pledge
of
the
undermentioned securities has been terminated.
Pledgor
(Name
& Pledgee (Name &
Securities
Address)
Address)
Number
Type
Nominal Value
Signature ..............................................
Pledgee
Dated this ......................day of .............................................................of the year...............
This form must be completed in typed form.
B
Form I
No. of Company ........................
MERCHANT SHIPPING (Shipping Organisations – Private Companies) REGULATIONS,
Notification of changes among directors or in the representation of a company
Pursuant to Regulation 60
Name of Company ................................................................................................................
Delivered by ..........................................................................................................................
To the Registrar of Companies
(a) .........................................................................................................................................
hereby gives notice in accordance with Regulation 60 of the Merchant Shipping (Shipping
Organisations – Private Companies) Regulations, 2004 that:-
……………………………………………………………………………………………..
………………………………………………………………………………………………
………………………………………………………………………………………………
Effective Date of Change ...............................................................
Signature ...................................
Director/Secretary/Representative*
Dated this ................... day of ..................................................................of the year............
This form must be completed in typed form.
(a) State company name.
* Delete as necessary.
B
Form J
No. of Company ……………………….
MERCHANT SHIPPING (Shipping Organisations – Private Companies) REGULATIONS,
Notice of accounting periods
Pursuant to Regulation 65(2)
Name of Company ………………………………………………………………………………….
Delivered by ………………………………………………………………………………………
To the Registrar of Companies
(a)
…………………………………………………………………………………………………….
hereby gives notice in accordance with paragraph (2) of Regulation 65 of the Merchant Shipping
(Shipping Organisations – Private Companies ) Regulations, 2004 that the accounting periods of
the company shall be from ………………….to ……………………..
Date of resolution of directors ……………………………….
Signature …………………………..
Director/Secretary/Representative*
Dated this ………………………day of…………………..of the year………………..
This form must be completed in typed form.
(a)
State company name.
*
Delete as necessary.
B
Form K
No. of Company ........................
MERCHANT SHIPPING (Shipping Organisations – Private Companies) REGULATIONS,
Notice to the Registrar to exercise his power to appoint an auditor.
Pursuant to Regulation 83 (5)
Name of Company ....................................................................................…………….
Delivered by ...................................................................................................................
To the Registrar of Companies
(a)
...................................................................................................................................……………..
hereby gives notice in accordance with Regulation 83(5) of the Merchant Shipping (Shipping
Organisations – Private Companies) Regulations, 2004 that the power of the Registrar of
Companies to apply to the court for the appointment of an auditor in terms of Regulation 84(5) of
the Merchant Shipping (Shipping Organisations – Private Companies) Regulations, 2004 has now
become exercisable.
Signature..........................................
Director/Secretary/Representative*
Dated this .................................day of .................................... of the year.................
This form must be completed in typed form.
a) State company name.
* Delete as necessary.
B
Form L
No. of Company ........................
MERCHANT SHIPPING (Shipping Organisations – Private Companies) REGULATIONS,
Notice of the removal of an auditor
Pursuant to Regulation 89 (2)
Name of Company ..................................................................................…………….
Delivered by .................................................................................................................
To the Registrar of Companies
(a)
hereby gives notice in accordance with Regulation 90 (2) of the Merchant Shipping (Shipping
Organisations
–
Private
Companies)
Regulations,
that
................................................................. has been removed from auditor of the company with
effect from ...........................................................................
Signature ...................................
Director/Secretary/Representative*
Dated this ..............................day of ....................................of the year...........................
This form must be completed in typed form.
a) State partnership or company name.
* Delete as necessary.
B
Form M
No. of Company ........................
MERCHANT SHIPPING (Shipping Organisations – Private Companies) REGULATIONS,
Notification by company of the resignation of an auditor.
Pursuant to Regulation 91(3)
Name of Company .......................................................................................…………..
Delivered by ...................................................................................................................
To the Registrar of Companies
(a)
....................................................................................................................................…………….
hereby gives notice of the resignation of ......................................................................……………
from the post of auditor of the company and is hereby submitting a certified true copy of the
notice of resignation in accordance with Regulation 91 (3) of the Merchant Shipping (Shipping
Organisations – Private Companies) Regulations, 2004.
Signature ............................................……
Director/Secretary/Represetnative*
Dated this .............................day of ......................................of the year.........................
This form must be completed in typed form.
a) State partnership/company name.
* Delete as necessary.
B
Form N
No. of Company ........................
MERCHANT SHIPPING (Shipping Organisations – Private Companies) REGULATIONS,
Notice of appointment of liquidator by the court
Pursuant to Regulation 107(4)
Name of Company ................................................................................................................
Delivered by ..........................................................................................................................
To the Registrar of Companies
I hereby give notice that I have been appointed by the court as liquidator of
(a) ..........................................................................................................................................
with effect from ....................................................................................................................
Signature ..............................................
Liquidator
Dated this .........................day of ........................................................of the year.................
This form must be completed in typed form.
(a) State company name.
B
Form O
No. of Company ........................
MERCHANT SHIPPING (Shipping Organisations – Private Companies) REGULATIONS,
Notification of bank account by liquidator
Pursuant to Regulation 113(1)
Name of Company …………………………………………………………………………
Delivered by ………………………………………………………………………………..
To the Registrar of Companies
I .......................................................................................................being the Liquidator of
(a) ..................................................................................................................................... hereby
give notice in accordance with Regulation 113 (1) of the Merchant Shipping (Shipping
Organisations – Private Companies) Regulations, 2004 that I shall be using Bank
Account Number (b) .....................................................................................................................
held with
(c) ..............................................................................................for the purposes of receiving and
making payments on behalf of the said company.
Signature ...................................
Liquidator
Dated this .................................day of ..........................................................of the year…...
This form must be completed in typed form.
B
Form P
No. of Company ........................
MERCHANT SHIPPING (Shipping Organisations – Private Companies) REGULATIONS,
Notice of appointment of liquidator
Pursuant to Regulation 126
Name of Company ...............................................................................................................
Delivered by ..........................................................................................................................
To the Registrar of Companies
I/We hereby give notice in accordance with Regulation 126 of the Merchant Shipping (Shipping
Organisations – Private Companies) Regulations, 2004 that I/we have been appointed liquidator/s
of the above-named company.
Name
Address
Date of appointment .................................................................................
Signature ...................................
Liquidator/s (a)
Dated this ...............................day of ...................................................of the year ...............
This form must be completed in typed form.
(a) To be signed by each liquidator, if more than one.
B
Form Q
No. of Company ……………………………
MERCHANT SHIPPING (Shipping Organisations – Private Companies) REGULATIONS,
Notice of completion of liquidation
Pursuant to Regulation 132(3)
Name of Company ………………………………………………
Delivered by ……………………………………………………
To the Registrar of Companies
I …………………………………………………………………………… being the liquidator of
(a)
……………………………………………………………………………………………………….
hereby give notice that the liquidation of the said company has been completed on ………………
of ……………………. of the year ……………………
Signature ……………………………
Liquidator
Dated this …………………….. day of ……………………… of the year ……………….
This form must be completed in typed form.
(a) State company name.
B
Form R
No. of Company ........................
MERCHANT SHIPPING (Shipping Organisations – Private Companies) REGULATIONS,
Declaration of seizure of ship
Pursuant to Regulation 140
Name of Company...................................................................................................
Delivered by ...........................................................................................................
To the Registrar of Companies
I/We................................................................................................................being the director/s
(b)
of (c) ................................................................................................ hereby declare that
(a) the company is the owner of the ship ………………….which is its sole asset;
(b) the ship has been arrested by the company’s creditors in the port of
……………………………………;
(c) the value of the ship appears to us to be less than the total value of claims against the
company.
By this notice we therefore notify that no liquidation proceedings will be pursued in terms of
the Regulations and the creditors shall pursue their claims in the court of
……………………………………………………..
Note
The company rights are hereby preserved and further notice will be filed in the Registry when
the ship is sold and proceeds distributed which will result in the Company being struck off the
Register.
Signature ...........................
Director/s
Dated this .......................................day of ...............................................of the year
This form must be completed in typed form.
a) This declaration is to be delivered together with the notice of dissolution.
b) In the case of a company having more than two directors, this declaration is to be submitted
and signed by the majority of the directors.
c) State company name.
Form S
No. of Company .........................................
MERCHANT SHIPPING (Shipping Organisations – Private Companies) REGULATIONS,
Notice of dissolution and consequential winding up
Pursuant to Regulation 152
Name of Company .....................................................................................................
Delivered by ...............................................................................................................
To the Registrar of Companies
(a)
hereby gives notice in accordance with Regulation 152 of the Merchant Shipping (Shipping
Organisations – Private Companies) Regulations, 2004 of dissolution on the
.................................................. and consequential winding up.
Date of resolution/ Date of court order……………………………………………...
Signature ......................................
Director/Secretary/Representative*
Dated this ............................ day of ................................... of the year ...................
This form must be completed in typed form.
a)
State company name.
*
Delete as necessary
B
Form T
No. of Company ........................
MERCHANT SHIPPING (Shipping Organisations – Private Companies) REGULATIONS,
Notice of resignation of liquidator
Pursuant to Regulation 158
Name of Company ...............................................................................................................
Delivered by .........................................................................................................................
To the Registrar of Companies
I ................................................................................................……..being the liquidator of
(a) .........................................................................................................................................
hereby give notice that I have resigned from the post of liquidator of the said company with
effect
from the ..................... of .........................................................of the year ........................ .
Signature ..........................................
Liquidator
Dated this .......................day of ........................................................of the year...................
This form must be completed in typed form.
(a) State company name.
B
FORM U
No. of Company ……………
MERCHANT SHIPPING (Shipping Organisations – Private Companies) REGULATIONS,
Notice of winding up without procedures
Pursuant to Regulation 161
Name of Company ………………………………………………………………………………….
Delivered by ………………………………………………………………………………………..
To the Registrar of Companies
Notice is hereby given in terms of Regulation 161 of the Merchant Shipping (Shipping
Organisations – Private Companies) Regulations, 2004 that the Company’s ship
……………………… has been sold by judicial auction and all proceeds therefrom deposited in
the court of …………..…………………………
The procedure for ranking of creditors has been concluded and therefore the company is hereby
dissolved and wound up without the need for further procedures in terms of the said Regulation
161 of the Merchant Shipping (Shipping Organisations - Private Companies) Regulations, 2004.
Signed…………………………….
Directors
Dated this …………………..day of…………………of the year ………………….
This form must be completed in typed form.
(a) State company name.
B
(1) Companies regulated by these regulations may be
constituted by and have a single member notwithstanding any other
provision of these regulations.
(2) 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 inter vivos or causa
mortis, in which case it shall file a notice to that effect within fourteen
days in terms of the Seventh Schedule to these regulations.
(3)
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 these regulations regulating general meetings
shall be construed accordingly. The decisions referred to in this
paragraph shall be deemed to be resolutions of the company for the
purposes of the application of the provisions of these regulations
Provided that the provisions of this paragraph shall not
prejudice the rights of the auditors of the company under the
provisions of regulation 87 of these regulations and the directors of
the company under the provisions of regulation 52 of these
regulations, 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.
(4) When a single member of a company is also the sole
director of the company all provisions of these regulations and any
memorandum and articles of association relating to general meetings
shall be deemed to refer to the board of directors, and resolutions of
the board of directors shall qualify as general meeting resolutions
when the latter are required by law or the articles of the company.
(5) The single member shall record in writing all the
agreements between him and the company as represented by him in
a minute book kept by the company specifically for the purpose
Provided that current operations concluded under normal
conditions need not be recorded in such minute book.
(6) 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 regulation shall not apply
to such company from the date it has ceased to be a single member
company.
(7) All decisions taken by the single member as aforesaid
shall be considered as extraordinary resolutions for the purposes of
these regulations.
(8) If default is made in complying with the provisions
of paragraphs (2) and (6) of this regulation every officer of the
company who is in default shall be liable to a penalty.
(Regulation 12 (2) (b))
CONVERSION RULES APPLICABLE ON A CHANGE IN THE
CURRENCY IN WHICH THE SHARE CAPITAL OF A COMPANY IS
EXPRESSED AND THE CORRESPONDING REPORTING CURRENCY
Interpretation
1. In this Schedule, unless the context otherwise requires -
"Reporting Currency" shall mean the currency used in presenting the annual
accounts in accordance with the provisions of Regulation 82 of these Regulations.
On a change in the reporting 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 Regulation 12 of these Regulations, the term "original
reporting currency" shall refer to the reporting currency in operation before the
change; and the term "new reporting currency" shall refer to the reporting currency
applicable following the change, and in the case of the change taking place in the
first accounting period, to the reporting currency which would have been used had
such change not taken place.
"Foreign currency" means a currency other than the reporting currency.
"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
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
reporting currency applies.
"Monetary items" are money held and items to be received or paid in
money. All other assets and liabilities are "non-monetary items".
"Average annual exchange rate" means an average of the exchange rates
that existed during an accounting period. For the purpose of calculating this
average it shall be sufficient to take an average of the spot rates applicable on
the last working day of each week comprised within the said accounting period.
B
General rules
2. On a change in the reporting currency, the new reporting currency shall
become applicable from the first day of the accounting period to which the change
in reporting currency applies, which day is referred to as the "applicable date" in
the rest of this Schedule.
3. (1) The balance sheet items existing at the applicable date shall be
converted from the original reporting currency to the new reporting currency in
accordance with the rules set out in the remaining paragraphs of this Schedule.
(2) Such conversion shall be deemed to take place before any
transactions stand to be accounted for within the accounting period to which the
change in reporting currency applies.
Conversion rules
4. (1) The paid-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.
(3) The nominal value per share in the new reporting currency shall be
calculated by taking the aggregate of the paid-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 reporting currency shall
be carried out separately for the ordinary shares and the preference shares, or for
each class of ordinary shares in so far as the nominal value per share varies between
one class and the other, as the case may be.
B
(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 date.
5. (1) For the purposes of this paragraph, the terms "reserves created out
of profits" and "accumulated losses" shall be calculated for each accounting period
by taking the profits or losses for such period to the exclusion of any provisions
for exchange variations.
(2) Reserves created out of profits, including retained profits, shall be
converted at the average annual exchange rate pertaining to the accounting period
during which the profits from which such reserves originated were earned.
(3) For the purposes of determining the amount of profits pertaining to
an accounting period from which reserves were created the following rules shall
apply -
(a) when dividends are paid out of profits and the accounting period to
which such profits relate has not been nominated, such dividends
shall be deemed to have been paid on a first in first out basis;
(b) losses resulting during an accounting period shall not be netted off
against profits earned in other accounting periods, but shall be
converted at the average annual exchange rate for the accounting
period during which such losses were incurred.
(4) Where at the date of conversion there is an amount representing
accumulated losses such amount shall be converted at the average annual exchange
rate for the accounting period or periods during which such losses were incurred.
(5) For the purposes of sub-paragraph (4) above, any profits earned
during any accounting period shall not be netted off against losses incurred in
other accounting periods, but shall be converted at the average annual exchange
rate for the accounting period or periods during which such profits were earned.
(6) 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.
6. (1)
All monetary items shall be converted at the closing rate.
B
(2) Non-monetary items that are recorded in terms of past events (for
example historical cost) shall be converted at the average annual exchange rates
for the relevant accounting period.
(3) Non-monetary items that are revalued shall be converted at the
exchange rates that existed on the dates of their revaluations.
(4) Provisions for depreciation or for diminution in the value of non-
monetary assets shall be converted at the average annual exchange rate applied to
convert the cost or revalued amount of the relative assets in accordance with the
provisions of sub-paragraph (2) or (3) of this paragraph.
7. (1) Where following conversion to the new reporting currency the total
assets exceed the aggregate of total liabilities and the funds attributable to
shareholders, such excess shall be shown as a separate item within reserves under
the heading "Reporting currency conversion difference".
(2) The reporting currency conversion difference shall not be distributed
by way of dividend.
(3) Where following conversion to the new reporting currency the
aggregate of total liabilities and the funds attributable to shareholders exceeds
total assets, such excess shall be netted off against distributable reserves or added
to accumulated losses, as the case may be.
8. (1) In the annual accounts of the accounting period to which the change
in reporting currency applies, the amounts of the previous accounting period
corresponding to the items included in the balance sheet and, where applicable, in
the notes to the accounts, whether individual or consolidated, shall be stated at the
new reporting currency after applying the conversion rules set out in the previous
provisions of this Schedule.
(2) In the annual accounts of the accounting period to which the change
in reporting currency applies, the amounts of the previous accounting period
corresponding to the items included in the profit and loss account and, where
applicable, in the notes to the accounts, whether individual or consolidated, shall
be converted to the new reporting currency at the average annual exchange rate
pertaining to the previous accounting period.
Disclosure
9. In the first annual accounts following the conversion, the notes to the
accounts, whether individual or consolidated, shall include full details of the method
of conversion and the exchange rates used for each category of assets and liabilities
as categorised in this Schedule.
B
(1) A private company may change its status to a public Change of status
of company.
company in terms of the Companies Act whereupon the company
shall no longer be regulated by these regulations but shall be subject
to the provisions of the Companies Act.
(2) A public company may change its status to a private
company in terms of these regulations whereupon it shall no longer
be regulated by the Companies Act but shall be subject to the
provisions of these regulations.
Chapter II ––Formation of a Company
(Regulation 1(4)(a))
Form relating to Notice by Shipping Company electing to be governed by
the Companies Act
No. of Company ……………….
Name of Company …………………………………………………………………
Delivered by ………………………………………………………………………..
To the Registrar of Companies
( a ) ……………………………………………………………………………………
hereby gives notice that it elects to be regulated by the Companies Act and that the
requirements of the Companies Act will be complied with within ninety days from
the filing of this notice.
Signature ……………………………………
Director/Secretary/Representative*
Dated this ………………… day of ………………………….. of the
year………………..
This form must be completed in typed form.
(a)
State company name.
*
Delete as necessary.
Mitbug[ fl-Istamperija tal-Gvern — Printed at the Government Printing Press
A company is formed by means of a capital divided into Definition.
shares held by two or more members unless it is a single member
company. The liability of each member is limited to the amount, if
any, unpaid on the shares respectively held by each of them.
A company shall not be validly constituted under these How a company is
constituted.
regulations unless a memorandum of association is entered into and
a certificate of registration is issued in respect thereof.
(1)
The memorandum of every company shall state
(a)
that it is a shipping company for the purposes of the
Act ;
(b)
that the company is a private company;
(c) the name and residence of each of the subscribers
thereto;
(d)
the name of the company;
(e)
the registered office in Malta of the company;
(f) the objects of the company which shall be limited to
one or more of the objects specified for shipping organisations
by the Act;
(g) 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;
(h) 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;
(i)
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
Provided that the company may appoint other persons in
addition to the said named representatives to represent the company
in a class or classes of cases by means of a clause in the memorandum
or articles of association, by a resolution of the board of directors or
by means of a power of attorney issued by such named
representatives;
(j) the period, if any, fixed for the duration of the
company.
(2) (a) 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, Cap. 204.
for the purposes of these regulations, the euro, shall be a
convertible currency.
(b) 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 provisions of the
Eighth Schedule to these regulations shall apply in respect of
any company regulated by these regulations.
(c) For the purposes of applying the provisions of these
regulations relating to minimum share capital, share capital
expressed in a currency other than liri shall be calculated on
the basis of the liri equivalent at the date of –
(i) the registration of the memorandum, in the case
of formation of a company; or
(ii) the registration of the extraordinary resolution,
in the case referred to in subparagraph (b) of paragraph
(2) of this regulation; or
(iii) 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.
(3) Without prejudice to the provisions of regulation 24
of these regulations, a copy of the extraordinary resolution referred
to in subparagraph (b) of paragraph (2) of this regulation shall be
delivered to the Registrar for registration and shall not be effective
until it is so registered.
(4) 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 paragraph (2) of this regulation, as the case may be.
(1) A company may be designated by any name, but such Name of company.
name shall end with the words “private limited company” or the
word “limited” or its abbreviation “ltd.”.
(2)
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
this subparagraph without delay to the person requesting the
registration
Provided further that in applying subparagraph (b) of this
paragraph, the Registrar shall have regard to the business or proposed
business of the company, to the protection of the names of individuals
who are not connected in any way with the company, and, in the
case of a private company, to the names of the members.
The principal objects of a company registered in terms of
these regulations shall include one or more of the activities referred
to in sub-article (1) to article 84Z of the Act and may not be simply
stated to be any lawful purpose or trade in general and in the case of
single member companies, there shall be an indication of the main
activities of the company.
(1) The authorised share capital of a company shall be
not less than five hundred liri.
(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) At least twenty per cent of the nominal value of each
share taken up shall be paid up on the formation of the company.
(4) The ordinary shares of a company shall not be
redeemable, and every company shall at all times have ordinary
shares.
(1) There may be registered with the memorandum,
articles of association (hereinafter referred to as “articles”), which
shall be signed by the subscribers to the memorandum 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
model regulations contained in the First Schedule to these
regulations, such model 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.
Chapter III - Registration
The memorandum and articles, if any, shall be delivered Registration of
for registration to the Registrar who, being satisfied that all the memorandum
articles.
requirements of regulations 11 to 16 and of regulation 53 of these
regulations have been complied with, shall register them.
(1) On the registration of the memorandum and articles, Duty of Registrar
and effects of
if any, of a company, the Registrar shall certify under his hand that registration.
the company is registered as stated under these regulations, 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.
(2) A certificate of registration given in respect of a
company 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 company is
duly registered as a private company under these regulations.
(1) All persons carrying on business or entering into Where certificate
agreements in the name of or on behalf of a company in respect of of
not issued.
which a certificate of registration has not been issued under these
regulations and the Companies Act, in terms of these regulations
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 paragraph (1) of this regulation 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 paragraph (1) of
this regulation, the dealings referred to in that paragraph 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 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 paragraph (1) of this regulation 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 paragraph towards the said third party.
(4) When an agreement is entered into in the name of a
company and it is expressly stated that the company is in formation,
any such agreement shall be valid and binding on the parties thereto
upon registration of the company and the preceding paragraphs of
this regulation shall not apply.
(1) A company may by extraordinary resolution alter or
add to its memorandum or articles
Provided that it shall be permissible for the members
without prejudice to the company remaining a shipping organization
to authorise, and subject such authorisation to restrictions as they
deem fit, the board of directors to alter or add to the memorandum
and articles clauses which
(a)
amend the name of the company;
(b)
amend the registered address;
(c) amend the articles of the company relating to internal
administration provided the rights of the members are not
affected; and
(d) amend the objects and powers of the company so as
to facilitate the carrying on of the business of the company as a
shipping organisation.
(2) It shall be the duty of the directors to deliver to the
Registrar for registration a printed 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, the representation
of the company or any transfer or transmission of shares or any
allotment of shares. Any previous amended text of the memorandum
and articles, if any, 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 memorandum and articles, if any, and the text
of the original memorandum and articles, if any, registered in
accordance with the provisions of regulation 17 of these regulations,
the latter text together with resolutions registered in accordance with
the provisions of paragraph (2) of this regulation shall prevail.
Notwithstanding the provisions of paragraph (2) of this
regulation, where the alteration consists in a change in the registered
office in Malta of the company, the directors 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 vis-à-vis third parties,
unless and until it is registered.
(4) If default is made in complying with the provisions
of paragraph (2) of this regulation, 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.
(5) 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 these regulations and
any other applicable law shall lie with the directors of the company.
Where a company changes its name under the provisions Change of name of
of regulation 20 of these regulations, the Registrar shall enter the company.
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.
Notwithstanding anything in the memorandum or articles Alteration in
of a company no member shall be bound by any alteration made in memorandum
articles increasing
the memorandum or articles after the date on which he became a liability to
member if and so far as the alteration requires him to subscribe for contribute
capital not to bind
more shares than the number held by him at the date on which the existing members
alteration is made, or in any way increases his liability as at that without consent.
date to contribute to the share capital of, or otherwise pay money to,
the company
Provided that this regulation shall not apply in any case
where the member agrees in writing, either before or after the
alteration is made, to be bound thereby.
(1) A document or proceeding requiring authentication Authentication of
by a company may be signed by a director, or other authorised officer documents.
of the company or other person authorised in writing.
(2) All documents supplied to the Registrar shall be
authenticated in accordance with this regulation.
Chapter IV - Changes to a company’s share capital
(1) Notwithstanding the provisions of paragraph (3) of
regulation 20, where the alteration consists in the reduction of the
issued share capital, any such reduction shall not take effect until
three months from the date of the publication of the statement to
this effect in the Gazette and in a daily newspaper showing the date
at which the reduction was made and giving such details as are
necessary to distinguish the company to which the statement relates
Provided that if a creditor of the company whose debt
existed prior to the publication of the statement mentioned in this
paragraph objects thereto by writ of summons filed within the period
of three months reckoned as aforesaid and shows good cause why it
should not take effect, the court shall either uphold the objection or
allow the reduction on sufficient security being given
Provided further that a reduction in share capital shall be
void to the extent that it reduces the capital to less than the minimum
prescribed by regulation 15 of these regulations.
(2) The Registrar of Courts shall without delay cause a
copy of any writ of summons filed under paragraph (1) of this
regulation and of any judgment given thereon to be served on the
Registrar for registration.
(3) 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.
(4) 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.
(5) An alteration consisting in the reduction of the issued
share capital whose purpose is to offset losses incurred or to include
sums of money in a reserve shall take effect immediately on the
registration of the resolution concerning such a reduction and the
provisions of paragraph (1) of this regulation relating to the rights
granted to creditors of the company shall not apply
Provided that, following this operation, the amount of such
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.
(6) In the cases referred to in paragraph (5) of this
regulation the amounts deriving from the reduction of the issued
share capital may not be used for making payments or distributions
to shareholders or to discharge shareholders from the obligation to
pay calls on their shares
Provided that if the provisions of paragraphs (1) and (2) of
this regulation relating to the rights granted to the creditors of the
company are followed for the purpose of reducing any sum of money
contained in any such reserve, as is referred to in paragraph (5) of
this regulation, the amounts deriving therefrom may be used for
making payments or distributions to shareholders.
(7) The notice convening the general meeting at which
the extraordinary resolution for the reduction of issued share capital
is to be taken, shall, specify the purpose expressly and the way in
which it is to be carried out.
(1) Any increase in the issued share capital of a company Increase
share capital and
shall be decided upon by an ordinary resolution of the company, director’s
unless the memorandum or articles require a higher percentage than authority
shares.
that required for an ordinary resolution.
(2) The memorandum or articles of a company may
permit the board of directors to issue shares up to the authorised
share capital as may be specified in the same memorandum and
articles.
(3) Where there are several classes of shares, if resolution
of the general meeting is required, in terms of paragraph (1) of this
regulation, it shall be subject to a separate vote for each class of
shareholders whose rights are affected by that resolution and the
provisions relating to the majority required for the resolution by
virtue of paragraph (1) of this regulation shall apply for each class.
(4) A copy of any such ordinary or extraordinary
resolution referred to in paragraphs (1) and (3) of this regulation
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.
(5) The provisions of paragraphs (1) to (4) of this
regulation 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.
(6)
Where an increase in the issued share capital is not
fully taken up, the issued share capital shall be increased by the
amount of subscriptions received only if the conditions of the issue
so provide.
(7) Whenever a company makes any allotment of its
shares, the company shall, within one month thereafter, deliver to
the Registrar in accordance with the provisions of the Seventh
Schedule to these regulations for registration -
(a) a return of the allotments stating the number and the
nominal amount of the share 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 to 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.
Chapter V - Maintenance of share capital and protection of
class rights
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)
except after notice has been given in the prescribed
form in accordance with the Seventh Schedule to these
regulations, whether directly or indirectly, and whether by
means of a loan, guarantee, the provision of security or
otherwise, to give 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.
The acceptance of a company’s own shares by way of Effect of a
company’s own
pledge or other form of security shall be treated as an acquisition by shares as security.
the company of such shares.
Any share in a company may be forfeited from any Forfeiture or
surrender of
shareholder in favour of the company and any shareholder may shares.
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.
(1) It shall be lawful for a company to pay a commission Conditions
payment of
or make a discount or allowance to any person in consideration for commissions,
his subscribing or agreeing to subscribe, whether absolutely or discounts, etc.
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 any circular or notice whereby the shares
are privately offered; 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 regulation 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 regulation,
with annual interest at the rate of two percentage points over the
Central Bank of Malta minimum discount rate.
(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 these regulations relating to the
reduction of the issued share capital of a company shall, except as
provided in this regulation, 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 paragraph, 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.
(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 paragraph (4) of this regulation,
out of the proceeds of a fresh issue of shares made for the
purpose of the redemption;
(b) no such shares shall be issued 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 these regulations relating
to the reduction of the issued share capital of a company shall,
except as provided in this regulation, 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 regulation, 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 regulation
shall be treated as cancelled on redemption, and the amount of the
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 be taken as reducing the amount of the company’s
authorised share capital.
(4) Without prejudice to the provisions of paragraph (3)
of this regulation, 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 paragraphs of this regulation 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 paragraph (5) of this regulation 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.
(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 writ of summons 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 writ of summons filed under paragraph (1) of this
regulation and of any judgment given thereon to be served on the
Registrar for registration, and the said writ of summons shall, on
pain of nullity, include a demand to that effect.
(4) Paragraphs (2) and (4) of regulation 20 of these
regulations shall apply in respect of any consent or resolution given
or taken in terms of paragraph (1) of this regulation.
(5) Where no provision is made by the memorandum or
articles for authorising the change or variation referred to in
paragraph (1) of this regulation, no such change or variation may be
made.
Chapter VI - Miscellaneous provisions about shares and
debentures
Each share in a company shall be distinguished by its Numbering of
shares.
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. Transfer of shares
or debentures.
(1) Notwithstanding any provisions contained in any
other law, a transfer of shares in or debentures of a company may be
made by private writing unless the memorandum and articles, if any,
provide for another form.
(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.
(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) The directors of a 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 any court sanctioned
sale thereof.
(4) On the application of the person to whom the right to
any share 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 paragraph (4) of this regulation, 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 paragraphs (2) or (5) of this regulation, 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.
(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
regulation 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.
(4) If default is made in complying with any of the
provisions of this regulation, 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.
(1) Securities may, unless otherwise provided in the Pledging
securities.
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 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 paragraph (10) of this
regulation, be deemed not to apply to transfers by the pledgee in
terms of paragraph (6) of this regulation 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 paragraph (2) of this regulation.
(4)
Saving the provisions of paragraph (3) of this
regulation, 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 paragraph (4) of
this regulation, 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
(a) dispose of the securities which are pledged in his
favour; or
(b) appropriate and acquire the shares himself, in
settlement of the debt due to him or of part thereof.
(7) For the purposes of paragraph (6) of this regulation
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 paragraph (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 or a certified public accountant and
auditor appointed by the court on the application of the pledgee or
in such other manner as the parties may agree in writing.
(8) For the purposes of paragraph (7) of this regulation,
the fair value of the securities shall be that obtaining on the date of
the notice referred to in paragraph (6) of this regulation.
(9)
The pledgee shall, in selling the securities in
accordance with the provisions of paragraph (6) of this regulation,
be obliged to seek the best price being not less than their fair value
as determined in accordance with paragraph (7) of this regulation.
In the event that a buyer cannot be found for the securities at their
fair value, the pledgee may 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) The pledgee shall be obliged, prior to the exercise
of the right granted by paragraph (6) of this regulation, 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 paragraph (7) of this regulation. Such offer shall be kept open
for at least ten working days.
(11) In the exercise of his rights under this regulation,
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
Provided that it shall be lawful for a pledgee to sell all the
shares pledged in the event that it is not possible to achieve a fair
in the proceeds shall be released to the pledgor.
(12) 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 interest 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.
(13) Notice of termination of the pledge shall be
delivered by the pledgor or the pledgee to the Registrar for
registration within fourteen days of the termination of the pledge.
The company, securities in which have been pledged, shall also be
notified in writing of the termination of the pledge within the said
period and the company shall record that fact in the register of holders
of the respective securities.
(14) In the event that the parties to a pledge agreement
submit any dispute thereunder to arbitration all references in this
regulation to the court shall be deemed to refer to the arbitration
tribunal.
(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
Provided that where the company has converted any of its
shares into stock and has registered the conversion with the
Registrar, the register shall show the amount of stock held by
each member instead of the amount of shares and the particulars
relating to shares specified in subparagraph (a) of this paragraph.
(2) Where two or more persons hold one or more shares
in a company jointly, they shall, for the purposes of these regulations,
be treated as a single member; and, unless otherwise provided in the
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
in relation to 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 specified in the
memorandum or articles and in such form as may be determined.
(4) If default is made in complying with any requirement
of this regulation, 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.
Every company shall keep a register of debentures Register
(1)
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 and in such form as may be
determined therein.
(3) Where two or more persons hold one or more
debentures jointly, they shall for the purposes of these regulations
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.
(4) If default is made in complying with any requirement
of this regulation, 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.
Except when duly closed in accordance with the Inspection of
provisions of regulation 41 of these regulations, and subject to such registers.
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.
(1)
A company may, on giving notice to the members, Power to close
registers.
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 paragraphs (1) or (2) of
this regulation, no new particulars may be entered therein.
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.
Chapter VII - Meetings and Resolutions
(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 paragraph (1) of this regulation, 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.
(1)
The directors of a company shall, on the requisition
of a member or members of the company holding at the date of the
general meeting on
deposit of the requisition not less than one-tenth of such of the paid
up share capital of the company as at the date of the deposit carried
the right of voting at general meetings of the company, forthwith
proceed duly to convene an extraordinary general meeting of the
company.
(2) The requisition shall state the objects of the meeting
and shall be signed by the requisitionist or requisitionists and
deposited at the registered office of the company and may consist of
several documents in like form each signed by the requisitionist, or
if there is more than one requisitionist in any one document by all of
them.
(3) If the directors do not within twenty-one days from
the date of the deposit of the requisition proceed duly to convene a
meeting, the requisitionist or requisitionists may convene a meeting
in the same manner, as nearly as possible, as that in which meetings
are to be convened by the directors, but a meeting so convened shall
not be held after the expiration of three months from the date of the
deposit of the requisition.
(4) Any reasonable expense incurred by the requisitionist
or requisitionists by reason of the failure of the directors duly to
convene a meeting shall be repaid to the requisitionist or
requisitionists by the company, and any sum so paid shall be due
personally by the directors who were in default and may be retained
by the company out of any sums due or to become due from the
company by way of fees or other remuneration in respect of their
services to such of the directors as were in default.
A general meeting of a company shall be deemed not to Length of notice
for calling general
have been duly convened unless at least fourteen days’ notice has meetings.
been given in writing, and any provision in the company’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.
The following provisions shall have effect in so far as the General
as to meetings and
articles of a company do not contain other provisions in that votes.
behalf -
(a) notice of any general meeting of a company shall be
given to every member of the company and shall be served at
the address specified in the register of members in the manner
in which notices are required to be served by the First Schedule
to these regulations;
(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 lira or the equivalent of stock held by him unless
otherwise provided in the terms of issue of such shares or stock;
(e) service of notice at the last known address of the
shareholder as appears in the register of members shall be
deemed to be an effective service of notice. It is the duty of the
shareholders to inform the company of any change of address.
(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 these regulations, 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 paragraph (1) of this regulation
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.
(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 paragraph, 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 paragraph, 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 regulation shall apply to
meetings of any class of members of a company as they apply to
general meetings of the company.
(1) Any provision contained in the memorandum or Right to demand a
articles of a company shall be void in so far as it would have the poll.
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
paragraph (1) of this regulation 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.
(1) Unless otherwise provided in the memorandum, a
resolution shall be an extraordinary resolution where it has been
passed by more than fifty percent of the members having the right
to attend and vote at any such meeting
Provided that an extraordinary resolution shall be 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.
(2) Unless otherwise provided in the memorandum or
articles, an ordinary resolution shall be passed by a member or
members having the right to attend and vote at a meeting holding in
the aggregate more than fifty per cent of the voting rights attached
to shares represented and entitled to vote at the meeting.
Chapter VIII - Management and Administration
Power of company
(1)
In this regulation
“guarantee” shall mean the undertaking of any obligation
by whatever name whereby the company agrees to perform an
obligation in the event of failure to do so by any other person;
“corporate benefit” shall mean any financial, commercial,
trading or reputational benefit to be derived by the company,
its holding company, its subsidiaries or subsidiaries of its
holding company, any related company or its subsidiaries, its
trading partners or counterparts or its members but not only its
officers.
(2) 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 undertaking, property and uncalled
capital or any part thereof including as security for its direct
obligations or for those of third parties, and to issue debentures,
debenture stock and other securities whether outright or as security
for its direct liabilities or obligations or for those of any third party
Provided that when the grant of a guarantee for the
obligations of a third party by a company is made on a purely
gratuitous basis, with no corporate benefit being derived therefrom
by the company, unless the memorandum states otherwise, the issue
of such guarantee shall require the consent of the members by
extraordinary resolution
Provided further that nothing in this regulation shall render
invalid any guarantee granted by any company which was entered
into prior to the coming into force of these regulations.
(1) Every private company shall have at least one Directors.
director, and where a private company has one director, all references
in these regulations to two or more directors shall be construed as
references to such one director.
(2) The business of a company shall be managed by the
directors who may exercise all such powers of the company, including
those specified in regulation 51 of these regulations.
(3) Notwithstanding anything contained in the
memorandum and articles of association relating to the names 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 these regulations.
(4) 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.
(5) 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.
(6) When a vacancy arises in the board of directors the
vacancy can be filled by a general meeting or equivalent resolution
or in its absence a board of directors’ resolution. In the absence of
either one any member may apply to the court to appoint a director
until the next annual general meeting.
(7) A person appointed by the court in accordance with
the provisions of paragraph (6) of this regulation shall hold office
until the next annual general meeting although he shall be eligible
for re-election.
(8) The provisions of paragraph (6) of this regulation
shall furthermore be without prejudice to the provisions of paragraphs
(1) to (5) of regulation 54 and of sub-subparagraph (iv) of
subparagraph (b) of paragraph (2) of regulation 99 of these
regulations and to the right of the company to fill any such vacancy
in general meeting.
(1) Where a director is by the memorandum 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.
(2) 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.
(3) 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.
(1) A company may remove a director before the Removal
directors and
expiration of his period of office by a resolution taken at a general casual vacancies.
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 paragraph (1) of this regulation
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 regulation 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 regulation, if not filled at the meeting at which he is removed,
may be filled as a casual vacancy.
(5)
Nothing in this regulation 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 regulation.
(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.
(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 the
company cannot be exercised in accordance with the memorandum
of the company, any director shall represent the company in judicial
proceedings against it.
(1) A person shall not be qualified for appointment or
for appointment as
to hold office as director of a company if -
(a) he is interdicted or incapacitated or is an undischarged
bankrupt;
(b) he has been convicted of any of the crimes affecting
public trust or of theft or of fraud or of knowingly receiving
property obtained by theft or fraud;
(c)
he is a minor who has not been emancipated to trade;
(d) he is subject to a disqualification order under article
320 of the Companies Act or equivalent legislation overseas.
(2) Notwithstanding the provisions of these regulations
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 paragraph (2) of this regulation at the relevant time
may rely on that irregularity as against the company.
(1) Unless authorised in the memorandum or articles of Directors
competing with
a company a director may not, in competition with the company and company.
without the approval in writing of all the members of the company
given at a general meeting, carry on business on his own account
nor may he be a partner with unlimited liability in another partnership
which is in competition with that company.
(2) Where a director acts in violation of the prohibition
contained in this regulation, 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 regulation.
(3) The provisions of this regulation shall be without
prejudice to any other remedy which a company may have against a
director for breach of duty.
Prohibition of
It shall not be lawful for a company -
loans, etc. to
directors.
(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.
(1) It shall be the duty of a director of a company who
Duty of director to
disclose interest in
is in any way, whether directly or indirectly, interested in his personal
capacity 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 regulation shall be liable to a penalty.
(1) Every company shall send to the Registrar for
registration a return of any change among its directors or
representative, specifying the date of the change together with the
name and residence of any new director, within fourteen days from
the happening thereof in terms of the Seventh Schedule to these
regulations
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 these regulations have been complied with.
(2) If default is made in complying with the provisions
of paragraph (1) of this regulation, 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.
(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.
Any provision, whether contained in the memorandum or Provisions
liability of officers
articles of a company or in any contract with a company or otherwise and auditors.
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 in which
judgment is given in his favour or in which he is acquitted.
(1) Every company shall cause minutes of all Minutes of
proceedings of general meetings and all proceedings at meetings of proceedings.
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, including a place
outside Malta, 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 paragraphs (1) or (3) of this regulation, every officer of the
company who is in default shall be liable to a penalty.
Chapter IX - Accounts, Audit and Annual Return
Keeping of
(1) In lieu of the requirements of articles 13 to 18 of the accounting
Commercial Code a company shall be required to keep proper records.
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) all sales and purchases of goods and services by the
company.
(2) For the purposes of paragraph (1) of this regulation,
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 comply
with the requirements of these regulations.
(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.
(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 these regulations.
(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.
(1)
A company’s accounting periods shall be of not
more than one year except the first accounting period which may be
of not less than 6 months and not more than eighteen months from
the date of registration.
(2) Accounting periods shall be from and to such dates
as are determined by the directors from time to time during an
accounting period.
(3) In the case specified in paragraph (2) of this
regulation, the company shall within fourteen days file a note with
the Registrar for registration in terms of the Seventh Schedule to
these regulations.
(1) The directors of every company shall prepare for General provisions
each accounting period individual accounts comprising the balance as
form of individual
sheet as at the last day of the accounting period to which they refer, accounts.
the profit and loss account for that period, and the notes to the
accounts. These documents shall constitute a composite whole.
(2) The individual accounts shall be drawn up clearly and
in accordance with the provisions of these regulations.
(3) The individual accounts shall give a true and fair view
of the company’s assets, liabilities, financial position and profit or
loss.
(4) The individual accounts shall comply with the
requirements of the Second Schedule to these regulations 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 these
regulations would not be sufficient to give a true and fair view within
the meaning of paragraph (3) of this regulation, additional
information shall be given.
(6) Where in exceptional cases the application of a
provision of these regulations 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.
(1) If at the end of an accounting period a company is a Duty to prepare
consolidated
parent company the directors shall, as well as preparing the individual accounts.
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 registered offices or principal offices of such subsidiary
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 information necessary for the purposes of its
inclusion in the consolidated accounts cannot be obtained
without disproportionate expense or undue delay; or
(c) 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.
The reference in paragraph (a) to the rights of the parent
company and the reference in paragraph (c) to the interest of the
parent company are, respectively, to rights and interests held by or
attributed to the company for the purposes of regulation 3 of these
regulations, in the absence of which it would not be the parent
company.
(5) Where the activities of one or more subsidiary
undertakings are so different from those of other undertakings to be
included in the consolidation that their inclusion would be
incompatible with the obligation to give a true and fair view, those
undertakings shall be excluded from consolidation. This paragraph
shall not apply merely because some of the undertakings are
industrial, some commercial and some provide services, or because
they carry on industrial or commercial activities involving different
products or because they provide different services.
(6) Where all the subsidiary undertakings of a parent
company fall within the above exclusions, no consolidated accounts
shall be required.
(7) Where the undertaking excluded from the
consolidation pursuant to paragraph (5) of this regulation is an
undertaking not established in Malta its individual accounts shall be
attached to the consolidated accounts of the parent company
translated into English or Maltese, where the original is not in one
of these languages.
(8) The requirements specified in paragraphs (1) to (7)
of this regulation shall be subject to the following qualifications -
(a) an undertaking is not required to prepare for the
purposes of this regulation accounts which would not otherwise
be prepared, and if no accounts satisfying the said requirements
are prepared, none need be attached;
(b) a document need not be appended if it would not
otherwise be required to be published, or made available for
public inspection, anywhere in the world, but in that case the
reason for not attaching it shall be stated in the notes to the
accounts of the company;
(c) where an undertaking and all its subsidiary
undertakings are excluded from consolidation in accordance
with paragraph (6) of this regulation, the accounts of such of
the subsidiary undertakings of that undertaking as are included
in its consolidated accounts need not be attached.
(1) Consolidated accounts shall comprise the Form and content
of consolidated
consolidated balance sheet as at the last day of the accounting period accounts.
to which these refer, the consolidated profit and loss account for
that period, and the notes to the consolidated accounts. These
documents shall constitute a composite whole.
(2) The consolidated accounts shall be drawn up clearly
and in accordance with the provisions of these regulations.
(3) Consolidated accounts shall 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.
(4) Where the application of the provisions of these
regulations would not be sufficient to give a true and fair view within
the meaning of paragraph (3) of this regulation, additional
information shall be given.
(5) Where in exceptional cases the application of a
provision of these regulations 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.
(6) Consolidated accounts shall comply with the
provisions of the Third Schedule to these regulations as to the form
and content of the consolidated balance sheet and consolidated profit
and loss account and as to additional information to be provided by
way of notes to the consolidated accounts.
(1) 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 paragraph (2) hereof.
(2) Companies which on their balance sheet dates do
not exceed the limits of two of the three following criteria:-
– balance sheet total: six million Maltese liri
– net turnover: twelve million Maltese liri
– average number of employees during the accounting
period: two hundred and fifty.
(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 Malta; or
(b) where ninety per cent or more 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 the remaining percentage
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 paragraph (1) of this
regulation 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 Malta, 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 Malta;
(b) that in the case of a parent company which is itself a
subsidiary company of a parent undertaking not established
under the law of Malta, 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 directors’ report
thereon are drawn up in a manner equivalent to that prescribed
by these regulations and 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 of the parent undertaking which draws up
the consolidated accounts referred to in subparagraph (a) or (b)
of this paragraph;
(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 subparagraph
(a) or (b) of this paragraph, 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 subparagraph (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) 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 subparagraph (a) of
paragraph (1) of this regulation whether the company is a wholly-
owned subsidiary company.
(4) For the purposes of subparagraph (b) of paragraph
(1) of this regulation 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.
(1) Where the company is not required to prepare
consolidated accounts, the information specified in Part III of the
Second Schedule to these regulations shall be given in notes to the
individual accounts; and where the company is required to prepare
consolidated accounts, the information by way of notes to the
consolidated accounts specified in the Third Schedule to these
regulations shall be given.
(2) If the directors of the company are of the opinion
that the number of undertakings in respect of which the company is
required to disclose information under any provision of the Second
and Third Schedules to these regulations is such that compliance
with that provision would result in information of excessive length
being given, the information need only be given in respect of -
(a) the companies whose results or financial position, in
the opinion of the directors, principally affected the figures
shown in the company’s annual accounts; and
(b) companies excluded from consolidation under
paragraphs (3) or (4) of regulation 67 of these regulations.
(3) In any case where the provisions of paragraph (2) of
this regulation are applied -
(a) there shall be included in the notes to the company’s
annual accounts a statement that the information given relates
only to such companies as are mentioned in that paragraph;
and
(b) the full information, whether disclosed in the notes
to the accounts or the notes to the consolidated accounts or not,
shall be annexed to the company’s next annual return.
For the purpose of this paragraph the “next annual return”
means the return next delivered to the Registrar after the annual
accounts referred to in this regulation have been approved under
regulation 73 of these regulations.
(1) A company’s annual accounts shall be approved by Approval
signing of annual
the board of directors and the balance sheet shall be signed and dated accounts.
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 director or 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
paragraph (1) of this regulation.
(4)
If a copy of the accounts -
(a) is laid before the company, or otherwise circulated,
published or issued, without having been signed as required by
this regulation 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 regulation,
every officer of the company who is in default shall be liable to a
penalty.
(1) For each accounting period the directors shall prepare Contents of the
directors’ report.
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 company, and the principal activities of the company and its
subsidiaries in the course of the year and any significant change in
those activities in the year.
(3) The directors’ report shall furthermore comply with
the Fourth Schedule to these regulations as regards the disclosure of
the matters mentioned therein.
(4) In the case of default in complying with the provisions
of this regulation, every person who was a director of the company
immediately before the end of the period for laying accounts for the
relevant accounting period shall be liable to a penalty. In proceedings
against a person under this paragraph, it shall be a defence for him
to prove that he took all reasonable steps for securing compliance
with the requirements of this regulation.
(1) The directors’ report shall be approved by the board
of directors and signed and dated on behalf of the board by a director
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 of the company.
(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 regulation 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 regulation,
every officer of the company who is in default shall be liable to a
penalty.
(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 state whether in the auditors’
opinion the annual accounts have been properly prepared in
accordance with these regulations, 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.
(4) The auditors’ report shall state the names of the
auditors and shall be signed and dated by them.
(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.
(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 regulation,
every officer of the company who is in default shall be liable to a
penalty.
(8) References in this regulation to signature by the
auditors are, where the office of auditor is held by a partnership, to
the signature of an individual partner or partners signing on behalf
of the partnership and authorised to sign on its behalf.
(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) If the requirements of paragraph (o) of article 31 of
the Second Schedule to these regulations are not complied with in
the annual accounts, the auditors shall include in their report, so far
as they are reasonably able to do so, a statement giving the required
particulars.
Persons to whom a
(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 regulation 77 of these
regulations, be sent to each of the following persons -
(a)
every member of the company; and
(b) all other persons who are entitled to receive notice
of general meetings.
(2) Notwithstanding the provisions of paragraph (1) of
this regulation, copies of the annual accounts shall, unless otherwise
provided in the memorandum or articles, not be required to be sent
to a debenture holder who is not entitled to receive notices of general
meetings.
(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 paragraph (1)
of this regulation, 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 regulation 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 regulation, reference to the
term “annual accounts” shall include the directors’ report as specified
in regulation 73 of these regulations and the auditors’ report as
specified in regulation 75 of these regulations.
In respect of each accounting period of a company the Directors to lay
directors shall lay before the company in general meeting copies of accounts
the general
the annual accounts of the company for that period. There shall be meeting.
annexed to the annual accounts, the auditors’ report as specified in
regulation 75 of these regulations and the directors’ report as
specified in regulation 73 of these regulations.
(1)
The period allowed for laying before the company Period for laying
in general meeting of a company’s annual accounts for an accounting of accounts.
period shall be as provided in this regulation.
(2) Subject to the following paragraphs of this regulation,
the period allowed shall be ten months after the end of the relevant
accounting reference period.
(3) If a company carries on business, or has interests,
outside Malta and in respect of an accounting period, the directors,
before the end of the period allowed by paragraph (2) of this
regulation, give to the Registrar notice in the prescribed form -
(a) stating that the company so carries on business or
has such interests; and
(b) claiming an extension of the period so allowed by a
further three months,
the period allowed in relation to that accounting period shall be so
extended unless the Registrar notified his disapproval in writing to
the company.
(4) 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 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.
(5) 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 accounts shall be -
(a) the period allowed in accordance with paragraphs (2)
to (4) of this regulation; 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 dates,
whichever of those periods last expires.
Copies of accounts
(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 regulation 77 of
these regulations 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 accounts
prescribed by regulation 78 of these regulations.
(2) Where, in accordance with regulation 81 of these
regulations, a company qualifies to draw up abridged accounts
relating to an accounting period, the directors of the company may
deliver to the Registrar abridged accounts in respect of that
accounting period and such delivery shall satisfy the company’s
obligation under paragraph (1) of this regulation
Provided that where the company which qualifies to draw
up abridged accounts is an exempt company, it may deliver to the
Registrar its abridged balance sheet and relevant balance sheet notes
but without the profit and loss account and the directors’ report.
(3) Where a company, which is a parent company,
prepares consolidated accounts in accordance with the provisions
of these regulations it need not include a copy of its profit and loss
account with the accounts to be delivered to the Registrar as
prescribed in paragraph (1) of this regulation 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 these regulations, 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.
(4) Where the directors of a company propose to take
advantage of the exemptions conferred by paragraph (2), the auditors
shall have the duty to provide the directors with a special auditors’
report stating whether in their opinion the company is entitled to
those exemptions as claimed in the directors’ statements and whether
the documents to be proposed to be delivered in accordance with
this article are properly prepared
Provided that the special auditors’ report shall not be
required where the annual accounts of the company, in respect of
which the auditors’ report referred to in regulation 75 has been made,
are to be published as drawn up.
(5) In the case of default in complying with the provisions
of this regulation, or where the accounts delivered to the Registrar
do not comply with the provisions of these regulations, 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 paragraph it shall not be a defence to prove
that the document or documents in question were not in fact prepared
as required by these regulations.
(1) Every company shall upon each anniversary of its Annual return.
registration, make a return in the form set out in the Fifth Schedule
to these regulations showing the matters therein specified and made
up to the date of such anniversary
Provided that -
(a) where a company was, immediately before the 1 st
January 2004, in default with respect to the delivery of one or
more annual returns, this regulation 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 regulation
20 of these regulations, the list of past and present members
shown in Part 3 of the Fifth Schedule to these regulations, 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 and forwarded to the Registrar
for registration within forty-two days after the date to which it is
made up.
(3) If default is made in complying with the provisions
of this regulation, 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.
(1) Companies which on their balance sheet dates do
not exceed the limits of two of three of the following criteria –
– balance sheet total: one million five hundred thousand
Maltese liri;-
– net turnover: three million Maltese liri;-
– average number of employees during the accounting
period: fifty;
shall be exempted from the provisions of Chapter X of Part III of
these regulations, and from the requirement imposed by regulation
75 of these regulations and such companies may, for all purposes of
these regulations, draw up abridged balance sheets and abridged
layouts of profit and loss account as specified in paragraph (2) of
this regulation and abridged notes to the accounts as specified in
paragraph (3) of this regulation.
(2)
For the purposes of this regulation, the word
“abridged” -
(a) when used therein in relation to a balance sheet shall
mean an abbreviated version of the balance sheet, showing only
those items to which a letter or Roman number is assigned in
the balance sheet formats shown under Part I of the Second
Schedule to these regulations, immediately following paragraph
13, under the heading “Balance Sheet Formats”, but such version
shall, in all other respects, correspond to the full balance sheet;
(b) when used therein in relation to profit and loss account
layouts shall mean the full profit and loss account with the
exception that the following items can be combined as one item
under the heading “gross profit or loss” -
(i)
items 1, 2, 3 and 6 in Format 1;
(ii)
items 1 to 5 in Format 2;
(iii) items A.1, B.1 and B.2 in Format 3; and
(iv) items A.1, A.2 and B.1 to B.4 in Format 4.
The formats herein stated are those shown in Part I of the
Second Schedule to these regulations, immediately following
paragraph 13, under the heading “Profit and Loss Account Formats”.
(3) Companies referred to in paragraph (1) of this
regulation may draw up abridged notes to the accounts omitting the
disclosures prescribed by sub-paragraphs (d) and (g) to (o) of
paragraph 31 of Part III of the Second Schedule to these regulations.
The notes to the accounts shall however disclose the information
specified in sub-paragraph (j) of the said paragraph 31 in total for
all the items concerned.
(4) 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 paragraph (1) of this
regulation, that fact shall affect the application of the derogation
provided for in that paragraph only if it occurs in two consecutive
accounting periods.
(5) The balance sheet total referred to in this regulation
shall consist of the assets in A to E in the layout in Format 1 of the
Balance Sheet Formats contained in Part 1 of the Second Schedule
to these regulations, immediately following paragraph 13, or those
in A to E in the layout in Format 2 of the Balance Sheet Formats
contained in the said Part of the same Schedule.
(6) 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
does not exceed the limits of two of the three following criteria:-
– aggregate balance sheet total: four million Maltese liri-
– aggregate turnover: eight million five hundred thousand
Maltese liri
– aggregate number of employees: two hundred and fifty
Provided that the provisions of this regulation shall not
apply to a parent company which is exempted from the requirement
to prepare consolidated accounts in accordance with regulation 70
of these regulations.
(7) The provisions of paragraph (4) shall apply to parent
companies as though the reference to company were a reference to
parent company.
(8) The aggregate figures shall be ascertained by
aggregating the relevant figures determined in accordance with
paragraphs (1) and (6) of this regulation. 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.
(9) The figures for each subsidiary undertaking shall be
those included in its 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.
(1) A company shall draw up its annual accounts in the
same currency as that of its share capital.
(2) Where the accounts of a company are drawn up in a
currency other than liri, there shall be stated on the balance sheet of
the company the exchange rate between the currency used and liri
on the balance sheet date and such rate shall be the average of the
buying and selling rates prevailing on such date.
(3) For the purposes of applying any provision of these
regulations which sets a threshold by reference to an amount in liri
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 liri by using the exchange rate referred to in paragraph (2) of
this regulation.
(4) Annual accounts shall be published in the currency
in which they are drawn up. They may also be published in both the
currency in which they are drawn up 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 closing middle rate issued by the Central Bank
of Malta. This rate shall be disclosed in the notes to the accounts.
Chapter X - Auditors
(1) A company shall, at each general meeting at which Appointment of
auditors.
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 the accounts are laid. The company
may appoint joint auditors and reference in these regulations 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
paragraph (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 paragraphs of this regulation, 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 paragraph (4), the company
shall within two weeks of the general meeting at which an auditor
or auditors should have been appointed by virtue of paragraph (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
paragraph (5), every officer of the company who is in default shall
be liable to a penalty.
(1) The directors shall at any time before the general Filling
vacancies.
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 in 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 paragraph (1) shall be liable to the same penalty as that provided
for in paragraph (6) of regulation 83.
A person shall be disqualified from appointment as auditor
or from holding the office of auditor of a company if -
(a) in the case of an individual, he has at any time during
the previous three years been –
(i)
an officer or employee of the company; or
(ii) a partner, employer or employee of an officer of the
company; or
(iii) a partner or employee of an employee of the
company; or
(iv) related by consanguinity or affinity in the direct line,
or up to the third degree, in the collateral line, to any officer of
the company.
(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 two thousand liri 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 duties as auditors of that company. If a subsidiary undertaking
fails to comply with the provisions of this paragraph, 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 paragraph 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 paragraph, every officer of the company who is in
default shall be liable to a penalty.
A company’s auditors shall be entitled–
Right to attend
company
meetings.
(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.
(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 regulation 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.
(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 paragraph (1) of regulation 54.
(2) 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. If a company
fails to give the notice required by this paragraph, every officer of
the company who is in default shall be liable to a penalty.
(3) Nothing in this regulation 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 regulation
87 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 case the references in that regulation to matters concerning
the auditor as auditor shall be construed as references to matters
concerning him as a former auditor.
(1) Notice specifying the text of and reasons for a Rights of auditors
who are removed
proposed resolution of a general meeting of a company whereby it and not appointed.
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 auditor may make with respect to the intended
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.
(1) An auditor of a company may resign his office by Resignation
auditor.
depositing a notice in writing to that effect at the company’s
registered office and he shall so resign if he ceases to be qualified as
an auditor or if he fails to satisfy the conditions of qualification
provided in regulation 86. The notice shall not be effective unless it
is accompanied by the statement required by regulation 93.
(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 send a copy of the notice to the Registrar
for registration. If default is made in complying with this paragraph,
every officer of the company who is in default shall be liable to a
penalty.
(1) The provisions of this regulation shall apply where
Rights of resigning
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 paragraph (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 meting 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 regulation 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 paragraph (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 not resigned has, notwithstanding
his resignation, the rights conferred by regulation 87 in relation to
any such general meeting of the company as is mentioned in sub-
paragraphs (a) or (b) of paragraph (3), and, in such a case, the
references in that regulation to matters concerning the auditor as
auditor shall be construed as references to matters concerning him
as a former auditor.
(1) Where an auditor ceases for any reason to hold office, Statement by
person ceasing to
he shall deposit at the company’s registered office a statement of hold office as
any circumstances connected with his ceasing to hold office which auditor.
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 regulation
76 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-paragraph (a) of paragraph (3)
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-paragraph (a) of paragraph (3); 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.
(1) If a person ceasing to hold office as auditor fails
with regulation 93.
without just cause to comply with the provisions of regulation 93 he
shall be liable to a penalty.
(2) In proceedings for a default under paragraph (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 regulation 93, every officer of the company who is in
default shall be liable to a penalty.
Chapter XI - Distribution of Profits and Assets
(1) A company shall not make a distribution except out Certain
distributions
of profits available for the purpose.
prohibited.
(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;
(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.
(4) A company shall not apply an unrealised profit in
paying up debentures, or any amounts unpaid on its issued share
capital.
(1) When a distribution made by a company to any of Consequence of
unlawful
its members is made in contravention of the preceding provision distribution.
such members shall be bound to repay such sums to the company on
a demand in writing of the company or any interested person
Provided that nothing in this paragraph shall prohibit a
company from distributing interim dividends
Provided further that a decision to do so is based on a
reasonable expectation that the amount distributed will form part of
the distributable assets of the company at the end of the accounting
period.
(2) The provisions of this regulation shall apply without
prejudice to any obligation imposed apart from this regulation on a
member of a company to repay a distribution unlawfully made to
him.
The provisions of this chapter shall be without prejudice
to any other provision of law, or any provision of the company’s
memorandum or articles, restricting the sums out of which, or the
cases in which, a distribution may be made.
PART IV
DEFUNCT COMPANIES
(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 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 the said notice, the company’s name shall, unless
cause is 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 regulation 131 of these regulations are overdue by six
months or more, the Registrar may publish in the Gazette 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 regulation, the court on an application
made by the member or creditor or such other person before the
expiration of five years from the publication of the notice of the
striking off provided for in paragraphs (2) and (3) of this regulation
may, if satisfied that it is proper that the name 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
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 and in a daily newspaper circulating
wholly or mainly in Malta that the name of the company has been
restored to the register.
(5)
A notice to be sent under this regulation 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
regulation 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 regulation, 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.
PART V
DISSOLUTION AND CONSEQUENTIAL WINDING UP OF
COMPANIES
(1) Unless otherwise stated in these regulations, a Causes of
company shall be dissolved and consequently wound up voluntarily dissolution
consequential
in the following cases -
winding up.
(a) the company has by resolution resolved that the
company be dissolved and consequently wound up by the court;
(b) the company has by resolution resolved that the
company be dissolved and consequently wound up
voluntarily.
For the purposes of this paragraph a resolution of the company
shall be either a resolution supported by the majority of the directors
or an extraordinary resolution taken at a general meeting of the
shareholders as may be required in terms of the memorandum and
articles of association of the company.
(2) In addition to the modes of dissolution referred to in
paragraph (1) of this regulation -
(a) a company may be dissolved and wound up by the
Court when the company is unable to pay its debts; and
(b) a company shall be dissolved by the court in the
following cases -
(i) when the period fixed for its duration expires;
(ii) if the undertaking forming its object is completed
or cannot be completed;
(iii) if the share capital is reduced below the statutory
minimum;
(iv) if no director is in office;
(v) if in the opinion of the court, there exist grounds
of sufficient gravity to warrant dissolution;
(vi) in such other cases for which provision is made
in the memorandum and articles.
(3) In the cases of dissolution falling within subparagraph
(b) of paragraph (2) of this regulation, the court shall, at its discretion,
determine whether the company shall be wound up by the court or,
if it is satisfied that there is sufficient support for the process to be
carried out by the majority of the members, voluntarily.
(4) For the purposes of subparagraph (a) of paragraph
(2) of this regulation, 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 obtaining
of a final judgement against the company;
(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.
(5) For the purposes of this Part, a company shall be
wound up by the Court if it is wound up in accordance with the
provisions of Sub-Part I of this Part; and a company shall be wound
up voluntarily if it is wound up in accordance with the provisions of
Sub-Part II of this Part.
(6) Nothing in this Part shall prejudice the rights of any
creditor under the Act to enforce his claim directly against a ship.
(7) In addition to the modes of dissolution and winding
up above referred to the court may dissolve a company and deem it
to be wound up in the case specified in regulation 101.
SUB-PART I - WINDING UP BY THE COURT
Chapter I - General provisions
An application to the court (hereinafter referred to as Dissolution and
the “winding up application”) for the winding up of a company shall winding
application.
be made by means of an application which may be made either by
the company or by any of its members or directors, or by any creditor
having a debt due and unpaid in excess of ten thousand Maltese liri
or by all or any of them together or separately.
(1) On the hearing of the winding up application, the Powers of the
court.
court may either dismiss the application or make an order acceding
thereto (hereinafter referred to as a “winding up order”) and 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) Where the sole asset of the company is a ship subject
to a registered mortgage or other maritime claims and the outstanding
sums due under the mortgage or such maritime claims exceed the
value of the ship, the court shall not order the winding up of the
company until it is satisfied that there are excess funds deriving to
the company in Malta in relation to which a winding up order may
usefully be made.
(3) In the event contemplated in the preceding paragraph,
the court shall await the outcome of any enforcement proceedings
by the mortgagee or maritime claimants, whether in Malta or overseas
and whether private or public, by the mortgagee in terms of article
42 of the Act, or by any maritime claimant enjoying a right of
preference in terms of article 37C of the Act, after which it shall
determine the issue.
(4) Should it result to the court that there are no excess
proceeds of sale or that there have been ranking of creditor
proceedings over the proceeds of sale of the ship, the result of which
is final and binding on all creditors, and there is no business of the
company which needs to be wound up, it shall not order the winding
up of the company but shall instead declare the company dissolved
and wound up. The court shall order that upon the filing with the
Registrar of authenticated evidence of the sale of the ship or the
closure of ranking of creditors, which evidence shall be filed at the
registry for public notice, the company shall immediately and without
further procedures, be struck off the register. In such event any
residual rights of the company shall be vested in the shareholders of
the company by operation of law or be dealt with as may be
determined by the court at its discretion.
(5) Should it result that there are any funds in Malta
deriving to the company from proceedings contemplated in the
preceding paragraph, the court may order the winding up of the
company in accordance with these regulations.
(6) If the winding up application is presented by members
of the company on the basis that there are grounds of sufficient
gravity to warrant the dissolution and winding up of the company,
the court, if it is of the opinion that such grounds exist but that the
applicants are entitled to some other remedy, including the liquidation
of only their shares, apart from the dissolution and winding up of
the company, shall only make a winding up order so long as the
applicants are not acting unreasonably in seeking to have the
company dissolved and wound up instead of pursuing that other
remedy. On the demand of any interested party, the court shall have
all the necessary powers to provide such remedy, as it considers
reasonable in the circumstances to ensure that the company is in a
position to carry on its business.
At any time after the filing of a winding up application, Power
proceedings
and before a winding up order has been made, the company, or any against company.
creditor, 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
Provided that no proceedings instituted by a holder of a
registered mortgage or a privileged creditor over a ship owned by a
company shall be stayed.
In a winding up by the court,
Dispositions of
property etc., after
date of deemed
dissolution.
(a) any disposition of the property of the company other
than a ship by a mortgagee, and
(b) any transfer of shares other than shares which have
been pledged, or
(c) any transaction involving the closing out of a netting
provision in terms of the Set-off and Netting on Insolvency Act, Cap. 459.
made after the date of its deemed dissolution, shall be void, unless
the court otherwise orders.
When a company is being wound up by the court, any Warrants
carried into effect
act or warrant, whether precautionary or executive, other than a against company.
warrant of prohibitory injunction or any impediment of departure or
warrant of seizure of a ship by a holder of a registered mortgage or
a privileged creditor, issued or carried into effect against the company
after the date of its deemed dissolution, shall be void, unless
authorised by a court with specific reference to the company being
in a state of dissolution.
(1) Where, before the filing of a winding up application, Deemed
dissolution.
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.
(2) In any other case the company shall be deemed to
have been dissolved at the time of the filing of the winding up
application.
(1) On the making of a winding up order, or on the Consequences
winding up order.
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 regulation 107 of these regulations, no action or
proceeding, other than any action instituted by a holder of a registered
mortgage or a privileged creditor, 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 - Liquidators in a winding up by the court
(1) The court may appoint a provisional administrator
at any time after the presentation of a winding up application.
(2) The provisional administrator shall carry out such
functions and shall have such powers as the court may confer on
him by 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.
(4) The court shall appoint a liquidator on making up a
winding up order and the liquidator shall not resume office until he
has notified the acceptance of his appointment to the Registrar in
accordance with the Seventh Schedule to these regulations.
General provisions
(1) A liquidator appointed by the court may resign or, on
sufficient cause being shown, be removed by the court.
(2) 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.
(3) A vacancy in the office of a liquidator appointed by
the court shall be filled by the court.
(4) If more than one liquidator is appointed by the court,
the court shall declare whether any act which is by these regulations
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.
(5) The acts of a liquidator shall be valid notwithstanding
any defects that may afterwards be discovered in his appointment or
qualification.
Where a company is being wound up by the court, the Custody and
control of
liquidator or the provisional administrator, as the case may be, shall company’s
take into his custody or under his control all the property and all property.
rights to which he has reasonable cause to believe the company to
be entitled
Provided that nothing herein shall entitle a liquidator or
provisional administrator to dispossess
(a) a mortgagee in possession of a ship subject to a
registered mortgage in his favour; or
(b)
the holder of a possessory lien in terms of the Act,
or to do any other act which will in any manner hinder or obstruct the
exercise of rights of the holder of the registered mortgage including
the right to take possession of the ship in accordance with the Act.
(1) The liquidator in a winding up by the court shall Powers of
liquidator.
have the power, with the sanction either of the court or of any
liquidation committee -
(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 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.
(2) The liquidator in a winding up by the court shall, in
particular, have the power -
(a) unless the company is prohibited from selling any ship
under the terms of any registered mortgage or any court order,
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;
(e) to do all such acts as may have been undertaken by
the company towards any holder of a registered mortgage, and
to consult with such mortgagee as may be necessary, in relation
to any ship owned by the company and subject to a mortgage
Provided that nothing in this regulation shall permit the
liquidator to impede or obstruct the exercise of rights by the
mortgagee in terms of the Act or the terms of the mortgage.
(3) The exercise by the liquidator in a winding up by the
court of the powers conferred by this regulation shall be subject to
the control of the court, and any interested person may apply to the
court with respect to any exercise or proposed exercise of any of
those powers.
(1) Subject to the provisions of these regulations, 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 at any general
meeting of the creditors as well as to directives given by the general
meeting of the shareholders but in case of conflict precedence shall
be given to the directives of the creditors and in case of disagreement
among the creditors precedence shall be given to the directives of
the holders of a registered mortgage.
(2) The liquidator may summon general meetings of the
creditors or the officers and the members of the company for the
purpose of ascertaining their wishes, and it shall be his duty to
summon meetings at such times as the creditors or the officers or
the members of the company, by resolution, either at the meeting
appointing the liquidator or otherwise, may direct, or whenever
requested in writing to do so by one-tenth in value of the creditors.
(3) The liquidator may apply to the court for directions
in relation to any particular matter arising under the winding up.
(4) Should the liquidator, after investigating the affairs
and situation of the company establish that the company is the owner
of a sole ship which ship has either been sold, by a mortgagee
privately or through a judicial sale, or is in the process of being sold
through enforcement proceedings by a holder of a registered
mortgage or a privileged creditor and that it is unlikely that there
will be excess of funds for distribution to other creditors or the
shareholders, the liquidator shall inform the court of the situation
and provide the court with his opinion as to whether continuation of
the liquidation will serve any purpose and the provisions of
regulations 101 and 125 of these regulations shall apply.
(5) Subject to the provisions of these regulations, the
liquidator shall use his own discretion in the management of the
assets of the company.
(6) 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.
(7) A liquidator who has acted in accordance with the
direction of the court or in accordance with specialist advice shall
not be liable for any effects of his actions. Nor shall a liquidator be
liable for any loss or expense incurred by him in carrying out his
duties except where he has acted fraudulently or negligently or in
breach of law or of the directions of the court.
Every liquidator of a company which is being wound up Books to be kept
by the court shall keep proper books in which he shall cause to be by liquidator.
made entries or minutes of proceedings at meetings, and of such
other matters as may be prescribed.
(1) Upon his appointment the liquidator shall notify the Payments of
liquidator into
Registrar of any bank account which the liquidator shall use for the bank.
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) 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
have been notified to the Registrar.
(3) In the event that any proceeds from the sale of a ship
are received by the liquidator, the rights of preference of a holder of
a registered mortgage and of a privileged creditor shall continue to
apply over the sale proceeds in substitution of the ship in accordance
with the Act.
(4) It shall not be lawful to issue precautionary or
executive warrants over any accounts opened by the liquidator in
accordance with this regulation.
(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.
(3) The Registrar may, at the company’s expense, cause
the account to be audited, and for the purpose of the audit the
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
books or accounts 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.
(1) If an application is made to the court by any creditor
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 books and vouchers of the liquidator.
(1) When the liquidator of a company which is being Release of
wound up by the court has realised all the property of the company, liquidator
appointment.
or so much thereof as can, in his opinion, be realised without
needlessly protracting the liquidation, and has distributed a final
dividend, if any, to the creditors, or has resigned, or has been removed
from office, the Registrar shall, on the liquidator’s application to be
released, 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 all the requirements laid down by the Registrar and,
after taking into consideration the report and any objection which
may be raised by any creditor or person interested against the release
of the liquidator, the Registrar shall either grant or withhold the
release accordingly, subject nevertheless to an appeal to the court
made by the liquidator.
(2) Where the release of a liquidator is withheld, the court
may, on the application of any creditor or person interested, make
such order as it thinks fit, holding the liquidator responsible for the
consequences of any act or default which he may have made contrary
to his duty.
(3) An order of the Registrar releasing the liquidator shall
discharge him from all liability in respect of anything which he did
or which he failed to do in the administration of the affairs of the
company or otherwise in relation to his conduct as liquidator, but
the court may, on the application of any creditor or person interested,
revoke such order on proof that it was obtained by fraud or by
suppression or concealment of any material fact.
(4) Where a liquidator has not previously resigned or
been removed, the release shall operate as a termination of his
appointment.
(5) The Registrar shall, upon granting or withholding the
release referred to in this regulation, register it accordingly.
Chapter III - General powers of the court in a winding
up by the court
(1) The court may at any time after a winding up order, Power to stay
on the application either of the liquidator or any creditor, and on winding up.
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, either altogether or for a limited time, on such terms
and conditions as the court thinks fit.
(2) On an application under this regulation the court may,
before making an order, require the 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 regulation shall
forthwith be forwarded by the Registrar of Courts to the Registrar
for registration.
The court may, at any time after making a winding up order,
require any person who holds any money, property or books and
papers in his hands to which the company is prima facie entitled, to
pay, deliver, convey, transfer or otherwise hand over such money,
property, books or papers to the liquidator forthwith or within such
time as the court directs.
Provided that no such order may be issued in relation to
any property under the control of a holder of a registered mortgage
or a pledge.
(1) The liquidator may, if satisfied that the business of
the company, or the interests of the creditors generally, require the
appointment of a special manager of the estate or business of the
company or any ship belonging to the company other than himself,
apply to the court, and the court may, on such application, appoint a
special manager of the said estate or business or ship to act during
such time as the court may direct, with such powers as may be
entrusted to him by the court.
(2) The special manager shall give such security and
account in such manner as the court directs.
(3) The special manager shall receive such remuneration
as may be fixed by the court.
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.
The court may, at any time after making a winding up order,
books of company.
make such order for inspection of books and papers of the company
by creditors as the court thinks fit, and any books and papers in the
possession of the company may be inspected by creditors in
accordance with that order.
(1) The court may, subject to and without prejudice to Payments of costs
the rights of priority of all maritime privileges and mortgages and of
of assets.
without prejudice to any rights of possession over a ship or any
proceeds of sale, insurance or otherwise as stated in the Act, 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
liquidator in preserving, realising or collecting any of the assets
of the company;
(b) the cost of any security provided by a liquidator or
special manager;
(c) the costs of the applicant, and of any person appearing
on the application whose costs are allowed by the court;
(d)
the remuneration of the special manager, if any;
(e) any amount payable to a person employed or
authorised to assist in the preparation of a statement of affairs
or of account;
(f) 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;
(g) any necessary disbursements by the liquidator in the
course of his administration;
(h) the remuneration of any person employed by the
liquidator to perform any services for the company, as required
or authorised by the provisions of these regulations;
(i)
the remuneration of the liquidator;
(j) the amount of any income tax on chargeable gains
accruing on realisation of any asset of the company.
(1) The court may, at any time after 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.
(2) The court may examine any person referred to in
paragraph (1) of this regulation on oath concerning the matters
aforesaid, either by word of mouth or on written interrogatories,
and may reduce his answers to writing and require him to sign them.
(3) The court may require such person to produce any
books and papers in his custody or power relating to the company,
but when he claims any right over books or papers produced by him,
the production shall be without prejudice to the right claimed by
him, and the court shall have jurisdiction in the winding up to
determine all questions relating to that right.
(4) If any person so summoned refuses to come before
the court at the time appointed, not having a lawful impediment which
is made known to the court at or before the time of the sitting and
allowed by it, the court may order his arrest in order to be brought
before the court for examination.
(5) These provisions shall not apply to the holders of a
registered mortgage of a ship who may be in possession of property
of a company in terms of such mortgage and related agreements.
The powers conferred and the duties imposed on the court
by these regulations in respect of the following matters -
(a) the holding and conduct of meetings to ascertain the
wishes of creditors;
(b) the payment, delivery, conveyance, surrender or
transfer of money, property books or papers to the liquidator;
(c)
the making of calls;
(d) the fixing of a time within which debts and claims
must be proved;
may, subject to the provisions of this regulation or any other provision
of these regulations, be exercised or performed by the liquidator,
subject to the control of the court.
(1) When the affairs of the company have been Striking of name
of the company off
completely wound up, or the circumstances specified in regulation the register.
111 (4) of these regulations the court, if the liquidator makes an
application in that behalf, shall make an order that the name of the
company be struck off the register under such conditions as to
publicity and notifications as it deems fit.
(2) A copy of the order shall within fourteen days from
the date thereof be forwarded by the Registrar of the Courts to the
Registrar who shall comply therewith.
SUB-PART II - VOLUNTARY WINDING UP
Chapter I - General provisions
(1) The liquidators shall be appointed, and may be Appointment,
remuneration and
removed from office, by an extraordinary resolution taken at a general removal of
meeting or where so provided by the memorandum or articles of the liquidators.
company, at a meeting by the board of directors of the company
Provided that if a resolution submitted for the appointment
of a person as a liquidator fails to obtain the required majority at a
general meeting of the company or the general meeting cannot take
place due to lack of a quorum, the directors may appoint a liquidator
themselves
Provided further that a liquidator, appointed by the
directors, may be removed from office by order of the court on
demand by application made by members of the company holding
in the aggregate not less than one tenth of the paid up share capital
of the company, if the court is satisfied that there exist sufficient
grounds to warrant his removal. In such an event, the court shall
itself appoint a liquidator.
(2) The remuneration of the liquidator shall be fixed by
the company in general meeting or where appropriate in a meeting
of the board of directors, subject nevertheless to the right of the
liquidator to demand that it be fixed or varied by the court.
(3) 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 claims
other than those with preference over a ship in terms of the Act unless
with the prior written consent of the relevant creditor.
The liquidator shall, within fourteen days after his
appointment, deliver to the Registrar for registration and publication
a notice of his appointment.
If default is made in complying with any of the
requirements of regulations 126, 127 and 152 of these regulations,
every director 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.
(1) When a company has been dissolved, until such time
as a liquidator is appointed, the directors shall have the power to
perform such acts only as are of ordinary administration.
(2) On the appointment of a liquidator all the powers of
the directors shall cease without prejudice to the right of the directors
to act in accordance with the provisions of this Sub-Part in so far as
authorised by the memorandum and articles.
(3) After the appointment of a liquidator a general
meeting or a meeting of the board of directors may be convened by
the liquidator or liquidators in office, or, if the office is vacant, by
any member of the company or any director of the company, in the
manner provided by these regulations or by the articles.
(1) Where the assets of a company are insufficient to
meet its liabilities the liquidator may make calls on all or any of the
members for payment of any unpaid share capital of the company
which he considers necessary to satisfy the debts and liabilities of
the company, and the costs and the charges and expenses of winding
up, and for the adjustment of the rights of the members among
themselves; and in making a call the liquidator may take into
consideration that some of the members may partly or wholly fail to
pay the call.
(2) The liquidator may, on production of a list identified
by him of the names of the members liable in payment of any calls
and of the amounts due by each of them, apply to the court for the
enforcement of any such calls by any of the means mentioned in
paragraph (a), (b), and (d) of article 273 of the Code of Organisation
and Civil Procedure.
(3) Where a call is made under the provisions of this
regulation, the person from whom a sum is due shall pay interest
thereon from the day appointed for payment to the sum of actual
payment at the rate of six per cent per annum.
(1) In the event of the winding up continuing for more Statement by
liquidator in
than twelve months, the liquidator shall unless the previous general respect of pending
meeting has resolved otherwise, summon a general meeting of the winding up.
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 paragraph (1) of this regulation he shall be liable to a penalty.
(1) As soon as the affairs of the company are wound up Final meetings and
the liquidator shall make an account of the winding up and of the scheme
distribution.
receipts and payments and shall draw up a scheme of distribution
indicating the amount due in respect of each share from the assets of
the company.
(2) Unless otherwise provided in the memorandum or
articles of association or as otherwise resolved by the members, the
liquidator shall cause the account to be audited by one or more
auditors appointed by the company in general meeting, and shall as
soon as the amount is audited, call a general meeting of the company
for the purpose of laying before it the account, the scheme of the
distribution and the auditors report and giving any explanation
thereof.
(3) Within one week after approval by members, the
liquidator shall send to the Registrar for registration a notice of
completion of liquidation in terms of the Seventh Schedule to these
regulations.
(4) If the liquidator fails to comply with the requirements
of paragraph (3) of this regulation, he shall be liable to a penalty,
and for every day for which the default continues, to a further
penalty.
Any member not agreeing to the scheme of distribution
may contest the same by application within one month of the approval
thereof by the general meeting.
The liquidator shall, together with the aforesaid notice,
deliver the books and other documents of the company to the
Registrar, who shall keep them for a period of five years from the
date at which the name of the company was struck off the register.
Date of dissolution
When a company is dissolved in accordance with the
provisions of subparagraph (b) of paragraph (1) of regulation 99 of
these regulations, the date of dissolution shall be the date of the
passing of the resolution for the dissolution or the date of the court
order for dissolution and consequential winding up or such later date
as may be specified in the said resolution or court order
Provided that where the court has ordered that the company be
wound up voluntarily by virtue of the provisions of subparagraph
(b) of paragraph (1) of regulation 99 of these regulations, the
company shall be deemed to have been dissolved at the time of the
filing of the winding up application.
Chapter II - Provisions applicable to a members’ voluntary
winding up
The provisions contained in the following regulations shall
apply in relation to a members’ voluntary winding up.
(1) If a vacancy occurs by death, resignation or otherwise
in the office of liquidator appointed by the company, the company
shall by extraordinary resolution fill the vacancy or if such power
has been vested in the directors by the directors.
(2) For the purposes of paragraph (1) of this regulation,
a general meeting shall be convened by any member, 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 paragraph (1) of
this regulation.
(3) The general meeting shall be held in the manner
provided by these regulations or by the memorandum and articles,
or in such manner as may, on the application of any member 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 paragraph (1) of this regulation
or if a vacancy occurs in the office of liquidator appointed by the
court, any member 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.
(5) The above shall not apply where the liquidator
establishes that there are no assets for distribution due to the sale of
the company’s ship by judicial sale or the ranking of creditors by a
court pursuant thereto. In such a case the liquidator shall notify the
members of the facts and file a notice of dissolution and winding up
without procedures in terms of the Seventh Schedule to these
regulations and on receipt thereof the Registrar shall proceed with
paragraph (3) hereof.
(1) As soon as the affairs of the company are fully wound Striking off of
company.
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 thereupon shall call a general
meeting of the company for the purpose of laying before it the
account, 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 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
paragraph the liquidator shall be liable to a penalty, and, for every
day during which the default continues, to a further penalty.
(3) On receiving the account together with the auditors’
report if any and the return, the Registrar shall forthwith register
them and on the expiration of three months from a notice published
in the Gazette, proceed to strike the name of the company off the
register.
(4) If the liquidator fails to call a general meeting of the
company as required by this regulation, he shall be liable to a penalty.
In the case that the company is insolvent the liquidator Duty of liquidator
may make a request and the court may, if at least 75% of the creditors in
insolvency.
agree, order that the winding up continues under the control of the
creditors and the general direction of the court.
Chapter III - Provisions applicable to a creditors’ voluntary
winding up
(1) The following provisions shall apply in relation to a
creditors’ voluntary winding up, which shall take place when
(a) it does not reasonably appear to the directors of the
company that there exist sufficient assets of the company to
pay all its liabilities;
(b) the company has assets which may be usefully
liquidated and proceeds distributed for the benefit of the
creditors; and
(c) the majority of creditors appear willing to pursue a
creditors’ voluntary winding up procedure.
(2) This procedure shall not apply when the sole asset of
the company is a ship which has been arrested by creditors or is
subject to judicial sale proceedings in relation to debts which appear
to the directors to exceed the value of the ship. In such an event the
obligation of the directors shall be limited to sending a notice in
writing as specified in the Seventh Schedule to these regulations to
the Registrar of the state of affairs relating to the ship for public
notice, a copy of which shall be sent to the creditors.
(1) Except in the case stated in regulation 140, the
directors of the company shall cause a meeting of the creditors of
the company to be summoned for the day, or the day next following
the day, on which there is to be held the general meeting of the
company at which the resolution for dissolution and consequential
voluntary winding up is to be proposed and shall cause the notice of
the said meeting of the creditors to be sent by post to the creditors
simultaneously with the sending of the notices of the said meeting
of the company.
(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) If the meeting of the company at which the resolution for
dissolution and consequential voluntary winding up is to be proposed
is adjourned and the resolution is passed at an adjourned meeting,
any resolution passed at a meeting of the creditors held in pursuance
of paragraph (1) of this regulation shall have effect as if it had been
passed immediately after the passing of the resolution for dissolution
and consequential winding up.
(5) If default is made by the directors, or the director, as the
case may be, in complying with any of the provisions of this
regulation, every director who is in default shall be liable to a
penalty.
(1) The creditors and the company at their respective Appointment and
meetings may nominate a person to be liquidator for the purpose removal
liquidator.
of winding up the affairs and distributing the assets of the company.
The nomination by the company of a person to be liquidator shall
be made by an extraordinary resolution. 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 regulation 141 of these regulations
was summoned or at which the resolution passed at such meeting
shall have come into effect in accordance with paragraph (4) of the
said regulation 141, according to the case.
(3) The provisions of regulation 127 shall apply to the
appointment of a liquidator under this regulation.
(4) If default is made by the directors in complying with
the provisions of paragraph (2) of this regulation, 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.
(1) The creditors at the meeting to be held in pursuance Liquidation
of regulation 136 of these regulations, or at any subsequent meeting Committee.
may, if they think fit, appoint not more than five representatives of
the creditors to a liquidation 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 paragraph 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 paragraph (1) of this
regulation or as may be otherwise prescribed, the section on the
constitution and proceedings of the liquidation committee other
than paragraphs (1) to (4) thereof, shall apply with respect to a
liquidation committee appointed under this regulation as they apply
with respect to a liquidation committee appointed in a winding up
by the court.
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.
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 paragraph (1) of regulation 137 of these
regulations
Provided that if a liquidator is not appointed in accordance with
the provisions of the said paragraph, 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.
(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
continues for more
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) In the event that the conditions stated in paragraph (2)
to regulation 140 of these regulations intervene, the liquidator shall
bring such events to the knowledge of the committees and the
committees shall resolve to terminate the liquidation, failing which
the liquidator may apply to the court for such an order.
(3) If the liquidator fails to comply with the provisions
of paragraph (1) of this regulation, he shall be liable to a penalty.
(1) As soon as the affairs of the company are fully wound Final meetings.
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 thereupon shall call a general
meeting of the company and a meeting of the creditors for the purpose
of laying the account 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 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 paragraph 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
paragraph, 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 paragraph 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 regulation,
he shall be liable to a penalty.
(1) The Registrar shall, on receiving the account and, Striking
company’s name
in respect of each such meeting as is referred to in regulation 147 of off the register.
these regulations, the return or returns as mentioned in that
regulation, forthwith register them, and on the expiration of three
months from the publication of a notice in the Gazette, 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 paragraph
(1) of this regulation, 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 paragraph (1) of this regulation in
accordance with the order given by the court referred to in that
paragraph.
Chapter IV - Provisions applicable to every voluntary winding up.
Distribution and Payment of Debts and other
Administrative Matters.
(1) Subject to the provisions of these regulations and of
any other law as to preferential debts or payments, and to the
provisions of the Act, the property of a company shall, on its winding
up, be applied in satisfaction of its liabilities in accordance with the
preferences available to them by law and pari passu within the same
rank of creditors, 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.
(2)
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 subparagraphs (c), (d) and (e) of
paragraph (1) of regulation 110 of these regulations to a
liquidator in a winding up by the court;
(b) without sanction, exercise any of the other powers
given by these regulations to a liquidator in a winding up by
the court;
(c)
exercise the power of the court of making calls; and
(d) 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.
(3)
The liquidator shall pay the debts of the company.
(4) When several liquidators are appointed, any power
given by these regulations may be exercised by such one or more of
them as may be determined at the time of their appointment or, in
default of such determination, by any number being not less than
two.
(1) Any arrangement entered into between a company in When arrangement
is binding on
the course of being wound up, and its creditors shall, subject to the members.
right of appeal under this regulation, 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 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.
(1) The liquidator or any member, or creditor may apply Court may
to the court to determine any question arising in the course of winding determine
questions and
up of a company, or to exercise, as respects the enforcement of calls exercise powers.
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 paragraph
(1) of this regulation will be just and beneficial, may, but subject to
the limitations under article 37C of the Act 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 regulation
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.
SUB-PART III - PROVISIONS APPLICABLE TO EVERY
MODE OF WINDING UP
Chapter I – General Provisions
On the dissolution of a company, and in no case later
than fourteen days after dissolution, the company shall deliver to
the Registrar for registration and publication a notice of dissolution
and consequential winding up in the form specified in the Seventh
Schedule to these regulations
Provided that where a company is dissolved by order of the
court, notice of the dissolution shall be given as aforesaid by the
Registrar of Courts.
Chapter II – Effect of appointment of liquidator and convening of
meetings
On the appointment of a liquidator, all the powers of the
directors shall cease except as may be otherwise provided in this
Part.
(1) The liquidator shall summon all meetings of creditors
by giving not less than fourteen days’ notice of the time and place
thereof in the Gazette and in at least one local daily newspaper; 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
books to be a creditor of the company, notice of the meeting of
creditors.
(2) The notice to each creditor shall be sent to the address
given in the creditor’s 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 creditor
may apply to the court for directions as to the summoning and holding
of a meeting.
(4) The provisions of this regulation shall not apply to
meetings held under regulation 141 or regulation 147 of these
regulations.
(1) 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.
(2) The provisions of these regulations 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, with such modifications and adaptations as may be
required.
(3) A copy of every resolution of a meeting of creditors
in a winding up by the court shall be certified by the liquidator, and
filed in the Registry of the Superior Courts.
(4) Where a resolution is passed at an adjourned meeting
of any creditors 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.
(1)
A meeting of creditors may not act for any purpose, Other proceedings
at meetings.
other than
(a) the election of a chairman where such election is
necessary; or
(b) the proving of debts; or
(c) the adjournment of the meeting
Provided that where there are present in a creditors’ meeting
at least three creditors entitled to vote if the number of creditors
entitled to vote do not exceed three, the limitations laid down in this
paragraph shall not apply.
(2) If within half an hour from the time appointed for
the meeting, a quorum of creditors 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.
(1) 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.
(2) A list of creditors present at every meeting shall be
made and kept in such form as the chairman may deem appropriate
or as may be prescribed.
(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 Part, 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 regulation 155, in a creditors’ voluntary
winding up, a notice thereof shall be delivered to the Registrar for
registration by any creditor of the company who has been duly
authorised by the same resolution or by the creditors’ meeting.
Chapter III– Proof and ranking of claims
In every winding up of a company 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.
Such claims shall be made in writing to the liquidator Claims
liquidator.
within the times set by him and shall be accompanied by all
supporting evidence. The acceptance by the liquidator of claims shall
be binding on the company.
In the cases specified in regulation 111, the company Striking off of
company on filing
shall be struck off upon the filing of a notice to the Registrar notifying of notice of
him of the sale of the ship and the conclusion of the ranking of judicial sale of
ship.
creditors procedure and this without the need of any further
proceedings. The notice shall be in the form specified in the Seventh
Schedule to these regulations.
In the winding up of a company the assets of which are Application of
insufficient to meet the liabilities, the rights of secured and unsecured rules in ranking.
creditors and the priority and ranking of their debts the provisions
of the Act shall apply and all claims against a ship shall rank in
priority to all other claims against the company. The determination
by a liquidator of whether a claim is against a ship or not shall be
binding on all the parties subject to the right of a creditor of a ship
to apply to the court to review such determination.
The provisions of the Commercial Code on bankruptcy Non-applicability
of the provisions
shall not apply to shipping organisations which are companies.
of the Commercial
Code.
PART VI
COMPANY RECONSTRUCTIONS, CONVERSIONS,
AMALGAMATIONS AND DIVISION OF COMPANIES
Part VI to Part IX of the Companies Act shall apply
mutatis mutandis to these regulations.
PART VII
GENERAL
All judicial proceedings which are to be served on a Judicial Service of
shipping organisation shall be properly served if sent by registered Acts.
mail or served by a court marshall at the registered office of the
shipping organisation.
The amount of penalties provided for in any provision Administrative
penalties under
of these regulations shall be determined by means of regulations these regulations.
specifying the maximum penalty that may be imposed by the
Registrar under any of the provisions of these regulations.
Registrar may vary
The Minister responsible for registration of commercial
partnerships may vary the thresholds, including the currency in these
currency by notice.
regulations from time to time by means of a notice.
PART VIII
TRANSITORY PROVISIONS
(1) As from the date of the coming into force of these
regulations, a shipping organisation shall not be formed and
registered as a private company unless it complies with the provisions
of these regulations.
(2) As from the date of the coming into force of these
regulations all shipping companies formed and registered as private
companies under the Commercial Partnerships Ordinance shall -
(i) be deemed to be formed and registered under these
regulations and in compliance with the same, shall retain the
same legal personality and all their rights and obligations shall
not be prejudiced in any manner;
(ii) within a period of five years from such date take such
action as is necessary to align the memorandum and articles of
association of the company with the requirements of these
regulations and for such purpose a resolution of the board of
directors or the sole director, as the case may be, shall be
sufficient.
(3) With regard to shipping companies formed and
registered as private companies under the Commercial Partnerships
Ordinance or shipping organisations formed as private companies
under these regulations, the provisions of Chapter IX of Part III shall
commence to apply to such accounting periods, not being an
accounting period commencing earlier than five years from the
entering into force of these regulations, as may be notified by the
Minister in the Gazette.
(4) The provisions of regulation 37 relating to pledge of
securities issued by a shipping company shall apply to all pledges
done after the coming into force of these regulations.
(5) A pledge in writing executed in relation to securities
issued by shipping companies prior to the entry into force of these
regulations shall be valid and effective as a pledge and shall be
regulated in accordance with the provisions of the Civil Code and
regulation 37of these regulations
Provided that –
(i) in addition to the above nothing in regulation 37 shall
render invalid anything which was valid before the date of these
regulations;
(ii) it shall not be deemed necessary for there to exist
any authority in the memorandum and articles of the company
for the securities to be pledged;
(iii) the obligation to file a notice with the Registrar as
required by paragraph (2) of regulation 37 shall be at the option
of the pledgee and any notice of pledge given to the company,
the securities of which have been pledged, shall be deemed to
comply with the requirements of paragraph (2);
(iv) such pledges shall be effective in relation to third
parties from the date of the notice of the pledge to the company
or from the date of the presentation of the pledge agreement to
the Registrar, which ever is the earlier and any notice filed by
the pledgee with the Registrar in terms of the preceding sub-
paragraph shall refer to the date of service of the notice of pledge
on the company or the Registrar as the case may be;
(v) the notice required by paragraph (13) of regulation
37 shall only be filed with the Registrar in case a notice had
been previously filed by the pledgee in terms of the preceding
sub-paragraph (iii).
(1) The dissolution of a shipping company occurring Transitory
before the date of these regulations shall continue to be administered provisions
winding up of
in accordance with the provisions of the Commercial Partnerships shipping
Ordinance and the consequential winding up of such a company shall companies.
be regulated accordingly unless the liquidator of the company elects,
by notice in writing to the Registrar, that the dissolution and winding
up be governed by these regulations.
(2) In relation to a shipping company, bankruptcy proceedings
commenced before the date of these regulations shall, after the
appointed day, continue to be governed by the provisions of Part III
of the Commercial Code relating to bankruptcy.
A shipping company formed and registered as a public Transitory
company in terms of the Commercial Partnerships Ordinance shall provisions
public companies
be governed by the Companies Act from the date on which these formed under the
Commercial
regulations come into force and shall comply with the Companies Partnerships
Act within six months from the date of these regulations.
Ordinance.
B