CROSS-BORDER CONVERSIONS OF LIMITED LIABILITY COMPANIES REGULATIONS

COMPANIES

SUBSIDIARY LEGISLATION 386.27

CROSS-BORDER CONVERSIONS OF LIMITED

LIABILITY COMPANIES REGULATIONS

31st January 2023

LEGAL NOTICE 27 of 2023, as amended by Legal Notice 68 of

2024.

The title of these regulations is the Cross-border

Conversions of Limited Liability Companies Regulations.

CROSS-BORDER CONVERSIONS OF LIMITED LIABILITY

COMPANIES REGULATIONS, 2023

Application by Board of Directors to obtain a pre-conversion

certificate in terms of Regulation 17(1)

Form CBC1- CONVERSION

Company Reg. No. ..............................

Name

of

Company

Delivered by . ...............................................................

To the Registrar of Companies

I/We (a)………………………………..................hereby submit

the application in accordance with Regulation 17(1) of the Cross-

Border Conversions of Limited Liability Companies Regulations,

2022, in order to obtain the pre-conversion certificate of

(b)………………………………….. having registration number (c)

…………………………………

I / We (d) confirm that the company has followed the procedures

provided for by the Cross-Border Conversions of Limited Liability

Companies Regulations, 2022 and the documents referred to in terms

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of regulation 17(2) are hereby attached.

Employee consultation in terms of the applicable legislation

under the employment law framework stipulated in regulation 7 (10)

has commenced/is not applicable (e)

Signature/s................................................

Director/s

Dated this.................... day of......................... of the year........

This form must be completed in typed form.

(a)

Delete as necessary and insert name and surname of

director/s

(b)

Insert company name

(c)

Insert company registration number

(d)

Delete as necessary

(e)

Delete as necessary

CROSS-BORDER CONVERSIONS OF LIMITED LIABILITY

COMPANIES REGULATIONS, 2022

Notice of consent by pledgee in terms of regulation 24(1)(c)

Form CBC2– PLEDGEE’S CONSENT

Delivered by .............................................................................

To the Registrar of Companies

I / We, (a) ……………………………………., as the pledgee/s

shares

held

in

the

foreign

converting

company

(b)………………………………………. having its registration number

(c)……………………………………….

registered

in

(d)……………………………………..

hereby give my/our (e) consent for the pledge in terms of

regulation 24(1) of the Cross-Border Conversions of Limited Liability

Companies Regulations, 2022, to be fully enforceable as a pledge of

shares in the Maltese converted company in terms of article 122 of the

Companies Act.

Signature/s ................................................

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Pledgee/s

Dated this .................... day of ......................... of the year .........

This form must be completed in typed form.

(a)

Delete as necessary and insert name and surname of

pledgee/s

(b)

Name of foreign converting company

(c)

Registration number of foreign converting company in

foreign jurisdiction

(d)

Name of foreign jurisdiction

(e)

Delete as necessary.

The scope of these regulations is to transpose and

Directive 2019/2121/EU of the European Parliament and of the

Council of 27 November 2019 amending Directive (EU) 2017/1132 as

regards cross-border conversions, mergers and divisions.

Added by: 

L.N. 68 of 2024.

Administrative Penalties

Regulation

Default

Administrative

DailyAdminist

Penalty

rative Penalty

14(1)

Failure to file

Euro 465.87

Euro 23.29

with

the

Registrar

the

extraordinary

resolution

approving the

cross-border

conversion

In these regulations, unless the context otherwise

requires

"Act" means the Companies Act;

"company" means a limited liability company formed in

accordance with Maltese law, any other limited liability

company listed in Annex II of Directive 2017/1132/EU and any

other body corporate formed and incorporated or registered

under the laws of any other approved country or jurisdiction

which is similar in nature to a company under Maltese

legislation that carries out a cross-border conversion;

"converted company" means a company formed in a

destination jurisdiction as a result of a cross-border conversion;

"cross-border conversion" means an operation whereby a

company, without being dissolved or wound up or going into

liquidation, converts the legal form under which it is registered

in a departure jurisdiction into a legal form of the destination

jurisdiction, as listed in Annex II of Directive 2017/1132/EU,

and transfers at least its registered office to the destination

jurisdiction, while retaining its legal personality;

"departure jurisdiction" means a country or jurisdiction

in which a company is registered prior to a cross-border

conversion;

"destination jurisdiction" means a country or jurisdiction

in which a converted company is registered as a result of a

cross-border conversion;

"Directive 2002/14/EC" means Directive 2002/14/EC of

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the European Parliament and of the Council of 11 March 2002

establishing a general framework for informing and consulting

employees in the European Community;

"Directive 2009/38/EC" means Directive 2009/38/EC of

the European Parliament and of the Council of 6 May 2009 on

the establishment of a European Works Council or a procedure

in Community-scale undertakings and Community-scale groups

of undertakings for the purposes of informing and consulting

employees;

"Directive 2014/59/EU" means Directive 2014/59/EU of

the European Parliament and of the Council of 15 May 2014

establishing a framework for the recovery and resolution of

credit institutions and investment firms and amending Council

Directive 82/891/EEC, and Directives 2001/24/EC, 2002/47/EC,

2004/25/EC, 2005/56/EC, 2007/36/EC, 2011/35/EU, 2012/30/

EU and 2013/36/EU, and Regulations (EU) No 1093/2010 and

(EU) No 648/2012, of the European Parliament and of the

Council;

"Directive 2017/1132/EU" means Directive 2017/1132/

EU of the European Parliament and of the Council relating to

certain aspects of company law;

"Directive 2019/2121/EU" means Directive 2019/2121/

EU of the European Parliament and of the Council of 27

November 2019 amending Directive 2017/1132/EU as regards

cross-border conversions, mergers and divisions;

"foreign converting company" means a company

registered outside Malta that carries out a cross-border

conversion;

"Maltese converting company" means a company

registered in Malta that carries out a cross-border conversion.

(1)

These regulations shall apply to conversions of

limited liability companies formed in accordance with the law of a

Member State or EEA State and having their registered office, central

administration or principal place of business within the Community,

into limited liability companies governed by the law of another

jurisdiction.

(2) These regulations shall also apply to conversions of

limited liability companies formed in accordance with the law of any

other approved country or jurisdiction

Provided that for the purpose of conversions regulated by

these regulations, Malta must either be a departure jurisdiction or a

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destination jurisdiction.

(3)

These regulations shall apply to companies which are

(a)

subject to preventive restructuring frameworks; or

(b)

the subject of crisis prevention measures as

defined in point (101) of Article 2(1) of Directive 2014/59/EU.

(4)

These regulations shall not apply

(a)

to continuations into or out of Malta in terms of

the Continuation of Companies Regulations;

(b)

to cross-border conversions involving a company

the object of which is the collective investment of capital

provided by the public, which operates on the principle of risk-

spreading and the units of which are, at the holders’ request,

repurchased or redeemed, directly or indirectly, out of the assets

of that company. Action taken by such a company to ensure that

the stock exchange value of its units does not vary significantly

from its net asset value shall be regarded as equivalent to such

repurchase or redemption;

(c)

to a company which is subject to resolution tools,

powers and mechanisms provided for in Title IV of Directive

2014/59/EU;

(d)

to a company which is the subject of insolvency

proceedings; or

(e)

to a company which is the subject of liquidation

proceedings.

(1)

Where Malta is the departure jurisdiction, these

regulations shall govern those parts of the procedures and formalities

to be complied with in connection with the cross‐border conversion in

order to obtain the pre-conversion certificate.

(2)

Where Malta is the destination jurisdiction, these

regulations shall govern those parts of the procedures and formalities

to be complied with following receipt of the pre-conversion certificate.

PART I: Procedure and formalities to be applied when Malta is the

departure jurisdiction

(1)

The board of directors of the Maltese registered

converting company shall draw up the draft terms of a cross-border

conversion. The said draft terms shall include at least the following

particulars

(a)

the legal form and name of the company and the

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location of its registered office in Malta;

(b)

the legal form and name proposed for the

converted company in the destination jurisdiction and the

proposed location of its registered office in the said jurisdiction;

(c)

the instrument of constitution of the company in

the destination jurisdiction, where applicable, and the statutes if

they are contained in a separate instrument;

(d)

the proposed indicative timetable for the cross-

border conversion;

(e)

the rights conferred by the converted company on

members enjoying special rights or on holders of securities other

than shares representing the company capital, or the proposed

measures concerning them;

(f)

any safeguards offered to creditors, such as

guarantees or pledges;

(g)

any special advantages granted to members of the

administrative, management, supervisory or controlling bodies

of the company;

(h)

whether any incentives or subsidies were received

by the company in Malta, as the departure jurisdiction, in the

preceding five (5) years;

(i)

details of the offer of cash compensation for

members in accordance with regulation 12;

(j)

the electronic address to be used by members for

the purposes of exercising their right in accordance with

regulation 12(2);

(k)

the likely repercussions of the cross-border

conversion on employment;

(l)

where appropriate, information on the procedures

by which arrangements for the involvement of employees in the

definition of their rights to participation in the converted

company are determined.

(2)

Where the destination jurisdiction is not a Member State

or EEA State, a reasoned opinion of one or more practising advocates

confirming that the proposed cross-border conversion is permitted by

the laws of the destination jurisdiction must be attached to the draft

terms of a cross-border conversion.

(3) The draft terms of a cross-border conversion shall be signed

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by one (1) director if the company has a sole (1) director or by two (2)

directors if the company has two or more directors. Furthermore, the

draft terms of a cross-border conversion may be signed in counterparts

and said counterparts together shall constitute one and the same

document.

(1)

The board of directors of the Maltese registered

converting company shall draw up a report for members and

employees, explaining and justifying the legal and economic aspects

of the cross-border conversion, as well as explaining the implications

of the cross‐border conversion for employees. It shall, in particular,

explain the implications of the cross-border conversion for the future

business of the company.

(2)

The report shall also include a section for members and a

section for employees. The company may decide either to draw up one

(1) report containing those two sections or to draw up separate reports

for members and employees respectively, containing the relevant

section.

(3)

The section of the report for members shall, in particular,

explain the following

(a)

the cash compensation and the method used to

determine the cash compensation;

(b)

the implications of the cross-border conversion

for members;

(c)

the rights and remedies available to members in

accordance with regulation 12.

(4)

The section of the report for members shall not be

required where all the members of the company have agreed to waive

that requirement in writing or where the company being converted is a

single-member company;

(5)

The section of the report for employees shall, in

particular, explain the following

(a)

the implications of the cross-border conversion

for employment relationships, as well as, where applicable, any

measures for safeguarding those relationships;

(b)

any material changes to the applicable conditions

of employment or to the location of the company’s places of

business;

(c)

how the factors set out in paragraphs (a) and (b)

affect any subsidiaries of the company.

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(6)

The reports shall be made available in any case

electronically, together with the draft terms of the cross-border

conversion, if available, to the members and representatives of the

employees or, where there are no such representatives, to the employees

themselves, not less than six (6) weeks before the date of the general

meeting referred to in regulation 11.

(7)

Where the board of directors of the company receives an

opinion on the information referred to in sub-regulations (1) and (5) in

good time from the representatives of the employees or, where there are

no such representatives, from the employees themselves, the members

shall be informed thereof and that opinion shall be appended to the

report.

(8)

The section of the report for employees shall not be

required where a company and its subsidiaries, if any, have no

employees other than those who form part of the board or other

administrative or management bodies of the company or those of its

subsidiaries.

(9)

Where the section of the report for members referred to in

sub-regulation (3) is waived or not required in accordance with sub-

regulation (4) and the section for employees referred to in sub-

regulation (5) is not required under sub-regulation 8, the report shall not

be required.

(10) Sub-regulations (1) to (9) shall be without prejudice to the

provisions of any other law applicable in Malta regarding the applicable

information and consultation rights and procedures pursuant to

Directives 2002/14/EC and 2009/38/EC.

(11) A report drawn-up in accordance with this regulation

shall be signed by one (1) director if the company has a sole (1) director

or by two (2) directors if the company has two (2) or more directors.

Furthermore, the directors’ report may be signed in counterparts and

such counterparts together shall constitute one (1) and the same

document.

(1)

The directors of the Maltese registered converting

company, or in the case of a company having more than two (2)

directors, the majority of the directors, shall make a written declaration

of solvency to the effect that, on the basis of the information available

to the Board of Directors at the date of the declaration, and after having

made reasonable enquiries, the Board of Directors is unaware of any

reason why the company may, after the cross-border conversion takes

effect, not be in a position to meet its liabilities when those liabilities

fall due

Provided that no declaration of solvency shall be required

where the Maltese registered converting company is a company which

is undergoing any one of the procedures referred to in regulation 4(3).

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(2)

A declaration made in accordance with sub-regulation

(1) shall have no effect for the purposes of these regulations unless

(a)

it is made within the month immediately

preceding the disclosure referred to in regulation 10; and

(b)

it contains a statement of the Maltese registered

converting company’s assets and liabilities made up to a date

not earlier than one (1) month prior to the disclosure referred to

in regulation 10.

(3)

Without prejudice to regulation 26 a director who makes

a declaration of solvency under this regulation without having

reasonable grounds for the opinion expressed in the said declaration

shall be guilty of an offence and liable on conviction to imprisonment

for a term not exceeding three years or to a fine (multa) of not more

than fifty thousand euro (€50,000), or to both such fine and

imprisonment.

(1) An expert acting on behalf of the Maltese

registered converting company but independent of it and approved by

the Registrar, shall examine the draft terms of a cross-border

conversion and draw up a written report for the company’s members.

The report shall be made available to the members not less than one

(1) month before the date of the general meeting referred to in

regulation 11.

(2)

The report shall include the expert’s opinion as to

whether the cash compensation is adequate. When assessing the cash

compensation, the expert shall consider any market price of the shares

in the company prior to the announcement of the conversion proposal

or the value of the company excluding the effect of the proposed

conversion, as determined in accordance with generally accepted

valuation methods.

(3)

The report shall at least

(a)

indicate the methods used to determine the cash

compensation proposed;

(b)

state whether the methods used are adequate for

the assessment of the cash compensation, indicate the value

arrived at using such methods and give an opinion on the

relative importance attributed to those methods in arriving at

the value decided on; and

(c)

describe any special valuation difficulties which

have arisen.

(4)

The expert shall be entitled to obtain from the company

all information necessary for the discharge of his duties.

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(5)

Neither an examination of the draft terms of a cross-

border conversion by an independent expert nor an independent expert

report shall be required if all the members of the company have so

agreed or if the company being converted is a single-member company.

(1)

Without prejudice to sub-regulation (3), the

Maltese registered converting company shall file with the Registrar for

registration

(a)

the draft terms of the cross-border conversion;

(b)

the declaration of solvency referred to in

regulation 8, if required in terms of these regulations; and

(c)

a copy of the notice informing the members,

creditors and representatives of the employees of the company

or, where there are no such representatives, the employees

themselves, that they may submit to the company, at the latest

five (5) working days before the date of the general meeting,

comments concerning the draft terms of the cross-border

conversion

Provided that the documents specified in this sub-

regulation may be filed with the Registrar for registration

entirely online.

(2)

On being satisfied that the requirements of regulations 6

and 10(1) have been complied with, the Registrar shall register the

draft terms of the cross-border conversion, the declaration of solvency

and the notice referred to in sub-regulation (1)(c) and shall cause

without delay a statement to be published in the Gazette or on the

website maintained by the Registrar specifying

(a)

the date on which registration was made, together

with an indication that the documents registered relate to the

draft terms of the cross-border conversion;

(b)

the type, name, registration number and registered

office of the Maltese registered converting company;

(c)

the legal form and name proposed for the

converted company in the destination jurisdiction and the

proposed location of its registered office in the said jurisdiction;

and

(d)

the information provided by the Maltese registered

converting company in terms of sub-regulation (1) (c).

(3)

The requirements of sub-regulation (1) shall not apply

where, for a continuous period beginning at least one (1) month before

the date fixed for the general meeting referred to in regulation 11 and

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not earlier than the conclusion of the said meeting, the Maltese

registered converting company makes the documents referred to in

sub-regulation (1) available on its website free of charge.

(4)

Where the Maltese registered converting company makes

the draft terms of the cross-border conversion and, where applicable,

the declaration of solvency, available in accordance with sub-

regulation (3), the company shall submit to the Registrar for

registration, the following information

(a)

the legal form, registration number and name of

the company and the location of its registered office in Malta;

(b)

the legal form and name proposed for the

converted company in the destination jurisdiction and the

proposed location of its registered office in the said jurisdiction;

(c)

an indication of the arrangements made for the

exercise of the rights of creditors, employees and members; and

(d)

details of the website from which the draft terms

of the cross-border conversion, the declaration of solvency, the

notice referred to in sub-regulation 1(c), the reasoned opinion

referred to in regulation 6(2) and complete information on the

arrangements referred to in paragraph (c) may be obtained

online and free of charge

Provided that the information specified in this

sub-regulation may be submitted to the Registrar for

registration entirely online.

(5)

On being satisfied that the requirements of regulation 6

and sub-regulation (4) have been complied with, the Registrar shall

register the information referred to in sub-regulation (4) and shall

cause without delay a statement to be published in the Gazette or on

the website maintained by the Registrar specifying

(a)

the date on which registration was made, together

with an indication that the information relates to the draft terms

of the cross-border conversion; and

(b)

the information provided by the Maltese

registered converting company in terms of sub-regulation (4).

(6)

In addition to the publications referred to in sub-

regulations (2) and (5), the Registrar shall be required to publish,

without delay, in a daily newspaper circulating wholly or mainly in

Malta, a notice consequent to the registration referred in sub-

regulations (2) and (5), as may be applicable. Such publication shall be

made by the Registrar at the expense of the Maltese registered

converting company and the provisions of article 401(1)(e) of the Act

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shall apply.

(1)

After taking note of the reports referred to in

regulations 7 and 9, where applicable, the employees’ opinions

submitted in accordance with regulation 7 (7) and comments submitted

in accordance with regulation 10, the general meeting of the company

shall decide, by means of an extraordinary resolution, if to approve the

draft terms of the cross‐border conversion and whether to adopt the

instrument of constitution, and the statutes if they are contained in a

separate instrument.

(2)

The approval by the general meeting referred to in sub-

regulation (1) shall not be valid unless the extraordinary resolution is

approved in accordance with the requirements of the Act and is adopted

at least one (1) month after the publication of the statement referred to

in regulation 10(2) and (5), as may be applicable.

(3)

The general meeting of the company may reserve the

right to make implementation of the cross-border conversion

conditional on express ratification by the general meeting of the

arrangements decided on with respect to employee participation in the

company upon completion of the cross-border conversion.

(1)

When a Maltese registered converting company

approves the draft terms of conversion by extraordinary resolution in

accordance with regulation 11, it shall be required to redeem the shares

held by any dissenting shareholders who so request, for the cash

compensation as specified in regulation 6(1)(i) in accordance with the

conditions laid down in this regulation.

(2)

Any dissenting shareholders wishing to exercise the right

referred to in sub-regulation (1) must declare to the company their

decision to exercise their right to have their shares redeemed. The

declaration must be made in writing and must be received by the

company not later than one (1) month after the general meeting referred

to in regulation 11.

(3)

Without prejudice to sub-regulation (4), upon receipt of

any declarations in accordance with sub-regulation (2), the company

shall redeem the shares held by the dissenting shareholders and pay the

cash compensation specified in the draft terms of the cross-border

conversion by no later than two (2) months after the cross-border

conversion becomes effective.

(4)

Any dissenting shareholders who have declared their

decision to exercise the right to have their shares redeemed but who

consider that the cash compensation offered by the company has not

been adequately set may, by means of an application filed in Court not

later than one (1) month after the general meeting referred to in

regulation 11, request the company to pay additional cash

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compensation. The court shall decide the application on its merits

within not more than thirty (30) days from the date of service of the

application on the Maltese registered converting company.

(5)

The substantive merits of any disputes relating to the

shareholders’ rights arising under this regulation 12 shall be decided in

accordance with Maltese legislation and, without prejudice to any

valid and binding arbitration agreement recognised by Maltese

legislation, any such disputes shall be subject to the exclusive

jurisdiction of the Courts in Malta.

The holders of securities, other than shares, in a Maltese

registered converting company, to which special rights are attached,

shall be given rights against the Maltese registered converting

company in accordance with the draft terms of the cross-border

conversion at least equivalent to those they possess prior to the

conversion. Provided that any dissenting holders of those securities

shall be entitled to have their securities redeemed by the said Maltese

registered converting company in accordance with regulation 12.

(1)

The extraordinary resolution approving the cross-

border conversion shall be delivered for registration to the Registrar

within fourteen (14) days from approval, and the Registrar, being

satisfied that the requirements of regulation 11 have been complied

with, shall register the resolution and shall cause without delay a

statement to be published in the Gazette or on a website maintained by

the Registrar

Provided that in the event of default in complying with

the aforementioned period of fourteen (14) days, every officer of the

company in default shall be liable to an administrative penalty, and for

every day during which the default continues, to a further

administrative penalty.

(2)

The statement referred to in sub-regulation (1) shall

include the following particulars

(a)

the date on which the registration of the

extraordinary resolution was made, together with a reference

that it was passed for the purposes of approving the cross-

border conversion;

(b)

the type, name, registration number and registered

office of the Maltese registered converting company; and

(c)

the legal form and name proposed for the

converted company in the destination jurisdiction and the

proposed location of its registered office in that jurisdiction.

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(1)

A registration made by the Registrar by virtue of

either regulation 10 or regulation 14 may be contested before the Court

by any interested party in accordance with the following conditions

(a)

the contestation shall be made by application

against the Registrar within one (1) month from the publication

following the registration referred to in regulation 10 on the

grounds that the draft terms of the cross-border conversion were

not drawn up in accordance with the provisions of regulation 6,

or within one (1) month from the last publication following the

registration referred to in regulation 14 on the grounds that the

resolution of the extraordinary general meeting was void or

voidable

Provided that in the latter case, the resolution of

the extraordinary general meeting cannot be challenged solely

on the following grounds

(i)

that the cash compensation referred to in

regulation 6(1)(i) has been inadequately set; or

(ii)

the information given with regard to the

cash compensation referred to in regulation 6(1) (i) did

not comply with the legal requirements.

(b)

Notice of the application referred to in regulation

15(1) shall be published by the Registrar in the Gazette or on a

website maintained by the Registrar;

(c)

where it is possible to remedy a defect liable to

render the cross-border conversion void or voidable, the Court

shall grant the Maltese registered converting company a period

within which to rectify the situation;

(d)

the Court shall decide whether to dismiss or

uphold the application within not more than thirty (30) days

from the from the filing of the application; and

(e)

a notice that the judgment of the Court has been

delivered shall be published by the Registrar in the Gazette or on

a website maintained by him, which notice shall specify whether

the application has been allowed or dismissed.

(2)

Without prejudice to sub-regulation (1), any creditor of

the Maltese registered converting company whose debt existed prior to

the publication made pursuant to regulation 10 may, within the period

of three (3) months from the said publication, by application, request

adequate safeguards to protect his claims on the ground that the

safeguards offered in the draft terms of the cross-border conversion, as

provided for in regulation 6(1)(f) are inadequate. If the creditor

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credibly demonstrates that, due to the cross-border conversion, the

satisfaction of his claims are at stake and that he has not obtained

adequate safeguards from the Maltese registered converting company,

the Court shall uphold the creditor’s request and order the Maltese

registered converting company to provide additional safeguards

subject to the cross-border conversion becoming effective. The Court

shall decide whether to dismiss or uphold the application within not

more than thirty (30) days from the date of notification of the

application on the Registrar and the Maltese registered converting

company.

(3)

Without prejudice to sub-regulations (1) and (2) and any

jurisdiction rules arising from Community or national law or from

contractual agreement, any creditor of the Maltese registered

converting company whose debt existed prior to the publication made

pursuant to regulation 10 may institute proceedings against the

Maltese registered converting company before the Courts in Malta at

any time within two (2) years from the date the conversion takes effect

on grounds other than those set out in sub-regulation (2). The

institution of such proceedings shall be in addition to other rules on the

choice of jurisdiction that are applicable pursuant to Community law.

(1)

Any party who feels aggrieved by the Court’s

judgement relating to an application in terms of regulation 12(4),

regulation 15(1) or regulation 15(2) may appeal to the Court of Appeal

as constituted in accordance with article 41(1) of the Code of

Organization and Civil Procedure by means of an application filed in

the registry of that court within thirty (30) days from the date of that

judgement and the Court of Appeal shall set down the cause for

hearing at an early date, in no case later than one (1) month from the

date on which the appeal is brought before it and shall cause notice of

such date to be given to the parties to the suit who, on their part, shall

assume the responsibility to verify with the court registry the latest

information regarding the appointment for the hearing of the case.

(2)

In the case of an appeal from the Court’s judgement

relating to regulation 15(1), notice of the appeal application shall be

published by the Registrar in the Gazette or on a website maintained

by the Registrar.

(3)

After appointing the application for hearing, and after

listening to the oral submissions made by the parties, the Court of

Appeal shall decide to uphold or reject the appeal, within the shortest

time possible but not later than three (3) months from the day when the

appeal had been filed and the parties and the Registrar have been duly

notified.

(4)

In the case of an appeal from the Court’s judgement

relating to regulation 15(1), a notice that the judgment of the Court of

Appeal has been delivered shall be published by the Registrar in the

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Gazette or on a website maintained by him, which notice shall specify

whether the application has been allowed or dismissed.

(5)

If, during the hearing of the appeal, the Court of Appeal

finds that the application is frivolous and vexatious, the Court of

Appeal may impose on the defaulting party an administrative penalty,

to be paid to the counterparty, either between ten thousand (€10,000)

and two hundred and fifty thousand euro (€250,000), or ten (10) per

centum (%) of the Maltese registered converting company’s annual

turnover for the preceding financial year.

(1)

Upon the lapse of one (1) month from the last

publication following the registration referred to in regulation 14, the

Maltese registered converting company shall submit to the Registrar an

application in the prescribed form for registration, to obtain a pre-

conversion certificate.

(2)

The application referred to in sub-regulation (1) shall be

signed by at least two (2) directors of the Maltese registered converting

company, unless the Board of Directors is composed of one(1) director,

and shall be accompanied by the following documents

(a)

the draft terms of the cross-border conversion;

(b)

the declaration of solvency referred to in

regulation 8, if required in terms of these regulations;

(c)

the directors’ report and the appended opinion, if

any, referred to in regulation 7, where available;

(d) the independent expert’s report, where required in

terms of these regulations;

(e)

any comments submitted in accordance with

regulation 10(1);

(f) a copy of the extraordinary resolution referred to in

regulation 11;

(g)

where the Maltese registered converting company

carries on in or from Malta any licensable activity, evidence of

the consent of the competent authority in Malta to the cross-

border conversion;

(h)

where the Maltese converting company is a public

company quoted on a recognized investment exchange, evidence

that the said exchange has been notified of the cross-border

conversion and evidence of the consent of the listing authority in

Malta to the cross-border conversion;

(i)

where any shares of the Maltese registered

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converting company are pledged, the written consent of the

pledgee.

(3)

The application referred to in sub-regulation (2) may be

submitted entirely online and signed in counterparts, and such

counterparts together shall constitute one (1) and the same document.

(1)

Upon receipt of the application referred to in

regulation 17 the Registrar shall

(a)

examine all documents and information submitted

to the Registrar in accordance with regulation 17 in order to

confirm the validity of the cross-border conversion as set out in

this part of the regulations; and

(b)

in respect of compliance with the rules concerning

employee participation, verify that the draft terms of the cross-

border conversion include information on the procedures by

which the relevant arrangements are determined and on the

possible options for such arrangements.

(2)

The review referred to in this regulation 18 shall be

carried out within three (3) months from the date of receipt by the

Registrar of the documents and information referred to in regulation

17. (3)

Upon completion of the Registrar’s review

(a)

where it is determined that the cross-border

conversion complies with all the relevant conditions and that all

necessary procedures and formalities have been completed, the

Registrar shall issue the pre-conversion certificate

Provided that no pre-conversion certificate shall

be issued prior to the lapse of three (3) months from the

publication referred to in regulation 10

Provided further

(i)

where an application has been made under

regulation 15(1), the Registrar shall only issue such

certificate after the date of the final judgment rejecting

the application;

(ii)

where an application has been made under

regulations 12(4) or 15(2), the Registrar shall only issue

such certificate after the date of the final judgment

rejecting or upholding the application.

(b) where it is determined that the cross-border

conversion does not comply with all the relevant conditions or

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that not all necessary procedures and formalities have been

completed, the Registrar shall not issue the pre‐conversion

certificate and shall inform the Maltese registered converting

company of the reasons for such decision by not later than seven

(7) days from the lapse of the period referred to in sub-

regulation (2). In that case, the Registrar may give the Maltese

registered converting company the opportunity to fulfil the

relevant conditions or to complete the procedures and

formalities within an appropriate period of time.

(4)

The Registrar shall not issue the pre-conversion

certificate where it is determined that the cross-border conversion is set

up for abusive or fraudulent purposes leading to, or aimed at the

evasion or circumvention of Community or national law, or for

criminal purposes.

(5)

Where the Registrar, during the review referred to in sub-

regulation (1), has serious doubts indicating that a cross-border

conversion is set up for abusive or fraudulent purposes leading to, or

aimed at the evasion or circumvention of Community or national law,

or for criminal purposes, the Registrar shall take into consideration

relevant facts and circumstances, of which the Registrar has become

aware, in the course of the review referred to in sub-regulation (1),

including through consultation of relevant authorities.

(6)

Where it is necessary for the purposes of the Registrar’s

assessment under sub-regulations (4) and (5) to take into account

additional information or to perform additional investigative activities,

the period of three (3) months provided for in sub-regulation (2) may

be further extended by a maximum of three (3) months.

(7)

Where, due to the complexity of the cross-border

procedure, it is not possible to carry out the assessment within the

deadlines provided for in sub-regulations (2) and (6), the Registrar

shall notify the Maltese registered converting company of the reasons

for any delay before the expiry of those deadlines.

(8)

In carrying out the review in terms of this regulation, the

Registrar may

(a)

consult other relevant authorities with competence

in the different fields concerned by the cross-border conversion,

including those of the destination jurisdiction;

(b)

obtain from those authorities and from the Maltese

converting registered company information and documents

necessary to assess the legality of the cross-border conversion in

terms of these regulations;

(c)

appoint an independent expert to assist with the

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Registrar’s assessment

Provided that any independent expert appointed

by the Registrar for such purpose must be independent from the

Maltese registered converting company applying for the pre-

conversion certificate and must have no past or current link

with the said Maltese converting company which might affect

the expert’s independence.

A pre-conversion certificate issued by the Registrar

following the Registrar’s review in accordance with regulation 18,

shall attest to compliance by the Maltese registered converting

company with all relevant conditions and to the proper completion of

all procedures and formalities in terms of these regulations.

When the Registrar is notified by the registry of the

destination jurisdiction to whose jurisdiction the Maltese registered

converting company is subject, of the effective date of the cross-border

conversion, the Registrar shall cause without delay a notice to be

published in the Gazette or on a website maintained by the Registrar,

indicating that the cross-border conversion has been completed and the

Registrar shall strike the name of the Maltese registered converting

company off the register and the provisions of article 401(1)(e) of the

Act shall apply. The Registrar shall also include in his register a

reference to the fact that the striking off of the Maltese registered

converting company is the result of a cross-border conversion as well

as the date of striking off of the company from the register and the

registration number, name and legal form of the Maltese converting

company.

Provided that nothing in this regulation shall

(a)

remove or affect the jurisdiction of any court in

Malta to hear and determine any proceedings commenced

therein by or against the Maltese converting company before it

ceased to be a company registered in Malta;

(b)

affect the property of the Maltese converting

company;

(c)

render defective any legal or other proceedings

instituted or to be instituted, by or against the Maltese

converting company; or

(d)

release or impair any conviction, judgement,

ruling, order, debt, liability or obligation due or to become due

or any cause existing against the Maltese converting company

or any other person.

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PART II: Procedure and formalities to be applied when Malta is

the destination jurisdiction

(1)

When a company carrying out a cross-border

conversion indicates Malta as the destination jurisdiction, the Registrar

shall review the legality of the cross-border conversion as regards that

part of the procedure which concerns the completion and approval of

the cross-border conversion. In particular, the Registrar shall ensure

that the foreign converting company complies with the provisions of

the Act on the incorporation and registration of companies and, where

appropriate, that arrangements for employee participation have been

determined.

(2)

For the purposes of sub-regulation (1), the foreign

converting company shall submit to the Registrar

(a)

the draft terms of the cross-border conversion

approved by the company’s general meeting, which shall

include at least the following

(i)

the legal form and name of the company

and the location of its registered office in the departure

jurisdiction;

(ii)

the legal form and name proposed for the

converted company in Malta and the proposed address of

its registered office in Malta;

(iii) the memorandum and the articles of

association of the company, where applicable, as

proposed for the converted company in Malta;

(iv) the proposed indicative time-line for the

cross-border conversion;

(v)

the rights conferred by the converted

company on members enjoying special rights or on

holders of securities other than shares representing the

company capital, or the proposed measures concerning

them;

(vi) any safeguards offered to creditors, such as

guarantees or pledges;

(vii) any special advantages granted to members

of the administrative, management, supervisory or

controlling bodies of the company;

(viii) whether any incentives or subsidies were

received by the company in the departure jurisdiction, in

the preceding five (5) years;

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(ix) details of the offer of cash compensation

for members in accordance with regulation 12;

(x)

the electronic address intended to be used

by members for the purposes of exercising their right in

the departure jurisdiction in accordance with regulation

12(2);

(xi) the likely repercussions of the cross-border

conversion on employment;

(xii) where appropriate, information on the

procedures by which arrangements for the involvement

of employees in the definition of their rights to

participation in the converted company are determined.

(b)

the pre-conversion certificate issued by the

departure jurisdiction;

(c)

the memorandum and articles of association of the

foreign converting company drawn up in accordance with the

requirements of the Act;

(d)

in those cases where the departure jurisdiction is

not a Member State or EEA State, a reasoned opinion by one or

more practising advocates confirming that the proposed cross-

border conversion is permitted by the laws of the departure

jurisdiction;

(da) a copy of the extraordinary resolution approving

the cross-border conversion;

(db) a declaration of solvency, drawn up in the same

manner as referred to in regulation 8;

(e)

any other documents and information required for

the purposes of registering the converting company as a

Maltese company

Provided that the information and documents

specified in this sub-regulation may be submitted to the

Registrar entirely online.

(3)

The Registrar shall accept the pre-conversion certificate

referred to in sub-regulation (2)(b) hereof as conclusively attesting to

the proper completion of the applicable pre‐conversion procedures and

formalities in the departure jurisdiction, without which the cross-

border conversion cannot be approved.

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In addition and without prejudice to the requirements of

regulation 21(2), the following requirements shall also apply to foreign

converting companies carrying out a licensable activity and foreign

converting companies which are public companies

(1)

Where the foreign converting company carries on, in or

from the departure jurisdiction, a business which, if conducted in or

from within Malta, would require to be licensed or authorized in terms

of any law in Malta, and the foreign converting company is licensed or

authorised by a competent authority in the departure jurisdiction,

evidence that the foreign converting company has notified that

competent authority of its intention to be registered in Malta in terms of

these regulations shall be required and, if the said notification is not

written in the English language, a translation thereof in the English

language, certified to be a correct translation shall be required;

(2)

Notwithstanding the license or authorization by the

competent authority in the departure jurisdiction, all foreign converting

companies intending to carry on a licensable activity in or from Malta

shall require a licence or other authorization in terms of law from the

competent authority in Malta before commencing operations.

(3)

Where the foreign converting company is a public

company

(a)

if the foreign converting company has offered its

shares or debentures to the public, the most recent prospectus or

equivalent document complying with the requirements of the

Act shall be required; and

(b)

if the foreign converting company is quoted on a

recognised stock exchange, evidence to the satisfaction of the

Registrar that the foreign converting company has notified the

relevant authorities of that exchange of its intention to be

registered in terms of these regulations shall be required and, if

the notification is not written in the English language, a

translation thereof in the English language, certified to be a

correct translation shall be required; and for the purposes of this

paragraph "recognised stock exchange" means a stock exchange

recognised by the relevant authorities in the departure

jurisdiction;

(c)

such evidence of the current membership of the

foreign converting company, or the method and form of

recording such membership, authenticated in such a manner as

the Registrar may require, as the Registrar accepts as adequate

for compliance with the requirements of this regulation in

respect of a list of members of that foreign converting company.

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(1)

After verifying that the provisions of these

regulations and all other applicable provisions of the Act have been

complied with, including the payment of any applicable fees, the

Registrar shall, without delay, and in any event, not later than ten (10)

working days from the submission of the documents referred to in

regulation 21(2) and, if applicable regulation 22, approve the cross-

border conversion and proceed to register the foreign converting

company as a Maltese company in terms of the Act. For the purposes

of such registration the Registrar shall issue a Certificate of Cross-

Border Conversion which shall include the name, legal form and

registration number of the converted company, a reference to the fact

that the converted company has completed a cross-border conversion

and the date on which the cross-border conversion takes effect. Upon

the issuance of such certificate, the Registrar shall cause a statement to

be published in the Gazette or on a website maintained by the

Registrar confirming the completion of the cross-border conversion.

(2)

A certificate issued by the Registrar under sub-regulation

(1) is conclusive evidence that the requirements of these regulations

have been complied with and it shall not be possible to declare the

cross-border conversion null and void after the date on which the

cross-border conversion takes effect

Provided that the provision in sub-regulation (1) shall be

without prejudice to powers vested in national authorities, inter alia, in

relation to criminal law, the prevention and combatting of terrorist

financing, social law, taxation and law enforcement, and to impose

measures and penalties under national law, after the date on which the

cross-border conversion took effect.

(3)

When the Registrar issues a Certificate of Cross-Border

Conversion under sub-regulation (1), the Registrar shall without delay

notify the registry of the departure jurisdiction that the cross-border

conversion has taken effect, indicating the effective date of the cross-

border conversion.

(1)

Where shares in a foreign converting company are

subject to a pledge, charge, assignment by way of security or other

similar security, hereinafter referred to as ''pledge'', in the departure

jurisdiction, such pledge shall continue to be valid and effective under

the laws of Malta, and following the issuance of the Certificate of

Cross-Border Conversion shall be fully enforceable as a pledge of

shares in terms of article 122 of the Act subject to the following

conditions

(a)

that the pledge has been validly created in writing

as a right of security and preference over shares under the laws

of the country or jurisdiction where the foreign converting

company was formed and incorporated or registered;

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(b)

that the pledge is valid and effective as of the date

of issue of the Certificate of Cross-Border Conversion;

(c)

that a notice of consent from the pledgee be

delivered to the Registrar for registration together with the other

documents referred to in regulation 21(2).

(2)

A pledge of shares as mentioned in sub-regulation (1)

(a)

shall continue to be regulated by the law chosen by

the parties and such law shall apply to all the rights, including

rights of enforcement thereof, and obligations of the parties

thereto, except to the extent that the pledge is enforced in Malta

in which case the relevant provisions of article 122 of the Act

shall apply;

(b)

shall continue to be subject to any submission

made by the parties to the jurisdiction of any foreign court or

arbitration which submission shall be valid and effective and

shall remain fully in force.

(3)

The party delivering the notice of pledge to the Registrar

in Malta in terms of this regulation shall also notify the other party to

the pledge agreement by serving him with a true copy of the said notice

within fourteen (14) days from the issuance of the Certificate of Cross-

Border Conversion.

(4)

On termination of the pledge, a notice of termination of

the pledge shall be delivered to the Registrar for registration in

accordance with the provisions of article 122(15) of the Act.

PART III – Consequences of the cross-border conversion

(1)

A cross-border conversion shall, from the date

referred to in regulation 23(1) have the following consequences

(a)

all the assets and liabilities of the company,

including all contracts, credits, rights and obligations, shall be

those of the converted company;

(b)

the members of the company shall continue to be

members of the converted company, unless they have disposed

of their shares in terms of regulation 13;

(c)

the rights and obligations of the company arising

from contracts of employment or from employment

relationships and existing at the date on which the cross-border

conversion takes effect shall be those of the converted company.

(2)

For the avoidance of doubt, a cross-border conversion

shall not

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(a)

render defective any legal or other proceedings

instituted or to be instituted, by or against the company; or

(b)

release or impair any conviction, judgement,

ruling, order, debt, liability or obligation due or to become due

or any cause existing against the company or against any

member, director, officer or persons vested with the

administration or the representation of the company.

PART IV – Damages

Any director of a Maltese company responsible for wilful

or negligent misconduct in the preparation and the implementation of

the cross-border conversion, or an expert responsible for drawing up,

on behalf of any Maltese company, the report on the draft terms of

cross-border conversion responsible for wilful or negligent

misconduct in the performance of his duties, shall be liable for all

damages occasioned to any shareholder of such company as a

consequence of his misconduct.