CROSS-BORDER MERGERS OF LIMITED LIABILITY COMPANIES REGULATIONS

COMPANIES

SUBSIDIARY LEGISLATION 386.28

CROSS-BORDER MERGERS OF LIMITED LIABILITY

COMPANIES REGULATIONS

31st January 2023

LEGAL NOTICE 28 of 2023, as amended by Legal Notice 68 of

2024.

(1)

The title of these regulations is the Cross-border

Mergers of Limited Liability Companies Regulations.

COMPANIES ACT (CROSS-BORDER MERGERS OF LIMITED

LIABILITY COMPANIES) REGULATIONS, 2023

Application by Board of Directors to obtain a pre-merger

certificate in terms of Regulation 17(1)

Form - MERGER

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

Name of Company .......................................................................

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

To the Registrar of Companies

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

submit the application in accordance with Regulation 17(1) of the

Companies Act (Cross-Border Mergers of Limited Liability

Companies) Regulations, 2023, in order to obtain the pre-merger

certificate of (b) ………………………………….. having registration

number (c) …………………………………

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

provided for by the Companies Act (Cross-Border Mergers of Limited

Liability Companies) Regulations, 2023, and the documents referred

to in terms 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

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The scope of these regulations is to transpose and

implement 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

Daily

Penalty

Administrative

Penalty

14(1)

Failure to file

Euro 465.87

Euro 23.29

with

the

Registrar the

extraordinary

resolution

approving the

cross-border

merger

In these regulations, unless the context otherwise

requires

"Act" means the Companies Act;

"company" means

(i)

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

registered under Maltese legislation;

(ii)

a company with share capital and having

legal personality, possessing separate assets which alone

serve to cover its debts and that is subject, under the

national law governing it, to conditions concerning

guarantees such as are provided for by Directive 2017/

1132/EU for the protection of the interests of members or

others;

"company resulting from the merger" means either the

acquiring company in the case of a merger of the type referred

to in sub-regulation (2)(a), (c) and (d) or the new company in

the case of a merger of the type referred to in sub-regulation

(2)(b);

"cross-border merger or mergers" means a merger or

mergers as referred to in this regulation;

"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 mergers, mergers and mergers;

"merger" means an operation whereby

(a)

one (1) or more companies, on being

dissolved without going into liquidation, transfer all their

assets and liabilities to another existing company, (the

"acquiring company"), in exchange for the issue to their

members of securities or shares representing the capital of

that other company and, if applicable, a cash payment not

exceeding 10% of the nominal value or, in the absence of

a nominal value, of the accounting par value of those

securities or shares;

(b)

two (2) or more companies, on being

dissolved without going into liquidation, transfer all their

assets and liabilities to a company that they form, (the

"new company"), in exchange for the issue to their

members of securities or shares representing the capital of

that new company and, if applicable, a cash payment not

exceeding 10% of the nominal value, or in the absence of

a nominal value, of the accounting par value of those

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securities or shares ("merger by formation");

(c)

a company, on being dissolved without

going into liquidation, transfers all its assets and

liabilities to the company holding all the securities or

shares representing its capital; or

(d)

one (1) or more companies, on being

dissolved without going into liquidation, transfer all their

assets and liabilities to the acquiring company, without

the issue of any new shares by the acquiring company,

provided that one (1) person holds directly or indirectly

all the shares in the merging companies or the members

of the merging companies hold their securities and shares

in the same proportion in all merging companies.

"merging company" means a company taking part in a

cross-border merger including an acquiring company and

"merging companies" shall be construed accordingly;

"Regulation (EU) 2021/23" means Regulation (EU)

2021/23 of the European Parliament and of the Council of 16

December 2020 on a framework for the recovery and resolution

of central counterparties and amending Regulations (EU) No

1095/2010, (EU) No 648/2012, (EU) No 600/2014, (EU) No

806/2014 and (EU) 2015/2365 and Directives 2002/47/EC,

2004/25/EC, 2007/36/EC, 2014/59/EU and (EU) 2017/1132;

(1)

These regulations shall apply to cross-border

mergers 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 provided that at least two (2) of the limited liability

companies involved in the merger are governed by the laws of

different Member States or EEA States.

(2)

These regulations shall also apply to cross-border

mergers of limited liability companies formed in accordance with the

law of any other approved country or jurisdiction provided that at least

two (2) of the limited liability companies involved in the merger are

governed by the laws of different approved countries or jurisdictions

Provided further that for the purpose of mergers

regulated by these regulations, at least one (1) of the merging

companies, or the company resulting from the merger, must be

registered in Malta.

(3)

Notwithstanding the definition of "merger", these

regulations shall also apply to cross-border mergers where the law of

at least one (1) of the countries or jurisdictions concerned allows the

cash payment referred to in paragraphs (a) and (b) of the definition to

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exceed 10% of the nominal value or, in the absence of a nominal value,

10% of the accounting par value of the securities or shares representing

the capital of the recipient companies.

(4)

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

or in point (48) of Article 2 of Regulation (EU) 2021/23.

(5)

These regulations shall not apply

(a)

to cross-border mergers 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;

(b)

to a company which subject to resolution tools,

powers and mechanisms provided for in Title IV of Directive

2014/59/EU or in Title V of Regulation (EU) 2021/23;

(c)

to a company which is the subject of insolvency

proceedings;

(d)

to a company which is the subject of liquidation

proceedings.

(1)

Unless otherwise provided for in these regulations,

a Maltese merging company shall comply with the provisions and

formalities of the Act, in particular those concerning the decision-

making process relating to the merger, the protection of creditors,

holders of securities or shares of the said company, as well as the

provisions of any other law in force in Malta concerning the rights of

employees.

(2)

Any law in force in Malta which empowers any authority

in Malta to oppose a merger between companies registered in Malta on

grounds of public interest, shall also be applicable to a cross-border

merger in which a Maltese company participates

Provided that this provision shall not prejudice the

provisions of article 21 of Council Regulation (EC) No 139/2004 of 20

January 2004 on the control of concentrations between undertakings.

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(1)

The board of directors of the Maltese merging

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

merger. The common draft terms of a cross-border merger shall

include at least the following particulars

(a)

for each of the merging companies, its legal form

and name, and the location of its registered office, and the legal

form and name proposed for the company resulting from the

cross-border merger and the proposed location of its registered

office;

(b)

the ratio applicable to the exchange of securities

or shares representing the company capital and the amount of

any cash payment, where appropriate;

(c)

the terms for the allotment of securities or shares

representing the capital of the company resulting from the

cross-border merger;

(d)

the likely repercussions of the cross-border

merger on employment;

(e)

the date from which the holding of such securities

or shares representing the company capital shall entitle the

holders to share in profits and any special conditions affecting

that entitlement;

(f)

the date from which the transactions of the

merging companies shall be treated for accounting purposes as

being those of the company resulting from the cross-border

merger;

(g)

the rights conferred by the company resulting

from the cross-border merger on members enjoying special

rights or on holders of securities other than shares representing

the company capital, or the measures proposed concerning

them;

(h)

any special advantages granted to members of the

administrative, management, supervisory or controlling bodies

of the merging companies;

(i)

the instrument of constitution of the company

resulting from the cross-border merger, where applicable, and

the statutes if they are contained in a separate instrument;

(j)

where appropriate, information on the procedures

by which arrangements for the involvement of employees in the

definition of their rights to participation in the company

resulting from the cross-border merger are determined;

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(k)

information on the evaluation of the assets and

liabilities which are transferred to the company resulting from

the cross-border merger;

(l)

dates of the merging companies' accounts used to

establish the conditions of the cross-border merger;

(m)

details of the offer of cash compensation for

members;

(n)

any safeguards offered to creditors, such as

guarantees or pledges; and

(o)

the electronic address to be used by members for

the purposes of exercising their right in accordance with

regulation 12(2).

(2)

Where any one (1) of the merging companies or the

company resulting from the merger is not or shall not be formed,

incorporated or registered in a Member State or EEA State, a reasoned

opinion of one or more practising advocates confirming that the

proposed cross-border merger is permitted by the laws of the relevant

jurisdiction must be attached to the common draft terms of cross-border

merger.

(3)

The common draft terms of a cross-border merger shall be

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

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

Furthermore, the common draft terms of cross-border merger may be

signed in counterparts and such counterparts together shall constitute

one (1) and the same document.

(1)

The board of directors of the Maltese merging

company or companies shall draw up a report for members and

employees, explaining and justifying the legal and economic aspects of

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

cross‐border merger for employees. It shall, in particular, explain the

implications of the cross-border merger 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

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;

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(b)

the share exchange ratio and the method or

methods used to arrive at the share exchange ratio, where

applicable;

(c)

the implications of the cross-border merger for

members;

(d)

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 a Maltese merging company have

agreed to waive that requirement in writing or where the Maltese

merging company 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 merger 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.

(6)

The reports shall be made available in any case

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

border merger, if available, to the members and to the 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

Provided that where the approval of the cross-border

merger is not required by the general meeting of the acquiring

company in accordance with the proviso to regulation 11(1), the report

shall be made available at least six (6) weeks before the date of the

general meeting of the other merging company or companies.

(7)

Where the Board of Directors of the Maltese merging

company or companies 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 Maltese merging company or companies and its

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subsidiaries, if any, have no employees other than those who form part

of the said Board or other administrative or management bodies of the

Maltese merging company or companies or those of their 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 in accordance with 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 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 and the same document.

(1)

The directors of a Maltese merging 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 resulting from the merger, is not in a position to

meet liabilities when those liabilities fall due

Provided that no declaration of solvency shall be required

where the Maltese merging company is a company which is undergoing

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

(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 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 30 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.

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(1)

An expert acting on behalf of the Maltese merging

company but independent of it and approved by the Registrar, shall

examine the common draft terms of a cross-border merger 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

Provided that where the approval of the cross-border

merger is not required by the general meeting of the acquiring

company in accordance with the proviso to regulation 11(1), the report

shall be made available at least one (1) month before the date of the

general meeting of the other merging company or companies.

(2)

As an alternative to experts operating on behalf of each

of the merging companies, one (1) or more independent experts,

appointed for that purpose at the joint request of the companies, by a

judicial or administrative authority in the country or jurisdiction of one

(1) of the merging companies or of the company resulting from the

cross-border merger or approved by such an authority, may examine

the common draft terms of cross-border merger and draw up a single

written report to all the members.

(3)

The report referred to in (1) shall include the expert’s

opinion as to whether the cash compensation and the share exchange

ratio are adequate. When assessing the cash compensation, the expert

shall consider any market price of the shares in the merging companies

prior to the announcement of the merger proposal or the value of the

company excluding the effect of the proposed merger, as determined in

accordance with generally accepted valuation methods.

(4)

The report shall at least

(a)

indicate the methods used to determine the cash

compensation proposed;

(b)

indicate the methods used to arrive at the share

exchange ratio proposed;

(c)

state whether the methods used are adequate for

the assessment of the cash compensation and the share

exchange ratio, 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 in the

event that different methods are used in the merging companies,

state also whether the use of different methods was justified;

and

(d)

describe any special valuation difficulties which

have arisen.

(5)

The expert shall be entitled to obtain from the merging

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companies all information necessary for the discharge of the duties of

the expert.

(6)

Neither an examination of the common draft terms of a

cross-border merger by an independent expert nor an independent

expert report shall be required if all the members of each of the

companies involved in the cross-border merger have so agreed or if the

Maltese merging company is a single member company.

(1)

Without prejudice to sub-regulation (3), the

Maltese companies shall file with the Registrar for registration

(a)

the common draft terms of the cross-border

merger;

(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 Maltese

merging 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 common draft terms of the

cross-border merger

Provided that where the approval of the cross-

border merger is not required by the general meeting of the

acquiring company in accordance with the proviso to regulation

11(1) comments may be submitted not later than five (5)

working days before the date of the general meeting of the other

merging company or companies

Provided further 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

common draft terms of the cross-border merger, 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

common draft terms of the cross-border merger;

(b)

the type, name, registration number and registered

office of each merging company;

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(c)

the register in which the documents referred to in

Article 14 of Directive (EU) 2017/1132 are filed in respect of

each of the merging companies and the registration number of

the respective company in the said register;

(d)

the information provided by the Maltese merging

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

ending not earlier than the conclusion of that meeting, the Maltese

merging company makes the documents referred to in sub-regulation

(1) available on its website free of charge to the public.

(4)

Where the Maltese merging company makes the common

draft terms of the cross-border merger 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)

for each of the merging companies its legal form,

registration number and name and the location of its registered

office;

(b)

the legal form and name proposed for any newly

created companies resulting from the cross-border merger and

the proposed location of their registered office;

(c)

the register in which the documents referred to in

Article 14 of Directive (EU) 2017/1132 are filed in respect of

each of the merging companies and the registration number of

the respective company in the said register;

(d)

an indication, for each of the merging companies,

of the arrangements made for the exercise of the rights of

creditors, employees and members; and

(e)

details of the website from which the common

draft terms of the cross-border merger, the declaration of

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

reasoned opinion referred to regulation 6(2) and complete

information on the arrangements referred to in paragraph (d)

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)

Where the approval of the cross-border merger is not

required by the general meeting of the acquiring company in

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accordance with the proviso to regulation 11(1), the disclosure referred

to in sub-regulations (1) and (4) shall be made at least one (1) month

before the date of the general meeting of the other merging company or

companies.

(6)

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 common

draft terms of the cross-border merger; and

(b)

the information provided by the Maltese merging

company in terms of sub-regulation (4).

(7)

In addition to the publications referred to in sub-

regulations (2) and (6), 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 (6) as may be applicable. Such publication shall be

made by the Registrar at the expense of the Maltese merging company

and the provisions of article 401(1)(e) of the Act 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 each Maltese

merging company shall decide, by means of an extraordinary

resolution, whether to approve the common draft terms of the

cross‐border merger and whether to amend its memorandum and

articles of association, if applicable

Provided that where a Maltese merging company is an

acquiring company, the approval of the merger by the general meeting

of such company shall not be required if the conditions laid down in

article 345(6) of the Act are fulfilled.

(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

regulations 10(2) and (6), as may be applicable.

(3)

The general meeting of each Maltese merging company

may reserve the right to make implementation of the cross-border

merger conditional on express ratification by the general meeting of the

arrangements decided on with respect to employee participation in the

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company resulting from the cross-border merger.

(1)

When a Maltese merging company approves the

common draft terms of merger 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 adequate cash

compensation as specified in regulation 6(1)(m) in accordance with

the conditions laid down in this regulation provided that, as a result of

the cross‐border merger, they would acquire shares in the company

resulting from the merger which would be governed by the law of a

country or jurisdiction other than Malta.

(2)

Any dissenting shareholders wishing to exercise the right

referred to in sub-regulation (1) must declare to the Maltese merging

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 Maltese

merging company shall redeem the shares held by the dissenting

shareholders and pay the cash compensation specified in the common

draft terms of the cross-border merger prior to the date when the cross-

border merger 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 Maltese merging

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 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 merging company.

(5)

Any shareholders of the Maltese merging company who

did not have or did not exercise the right to dispose of their shares, but

who consider that the share-exchange ratio set out in the common draft

terms of the cross-border merger is inadequate, may dispute that ratio

and claim a cash payment. Where no agreement is reached, an

application may be filed in Court by the relevant shareholders not later

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

11, requesting an additional cash payment from the Maltese merging

company and the Court’s judgement on such matter shall be binding on

the company resulting from the cross-border merger. 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

merging company. Where an application has been filed before the

Court in terms of this regulation, the Registrar may nonetheless issue

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the pre-merger certificate, as long as the Registrar indicates in the

certificate that such an application has been filed and that the

proceedings relating thereto are ongoing.

(6)

Where one (1) or more shareholders of the Maltese

merging company dispute the share-exchange ratio in accordance with

sub-regulation 5, the company resulting from the cross-border merger

can provide shares or other compensation instead of a cash payment.

(7)

The substantive merits of any disputes relating to the

shareholders’ rights arising under this regulation shall be decided in

accordance with the laws of Malta and, without prejudice to any valid

and binding arbitration agreement recognised by the laws of Malta, 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

merging company, to which special rights are attached, shall be given

rights against the Maltese merging company in accordance with the

common draft terms of the cross-border merger at least equivalent to

those they possess prior to the merger

Provided that any dissenting holders of those securities

shall be entitled to have their securities redeemed by the Maltese

merging company in accordance with regulation 12.

(1)

The extraordinary resolution approving the cross-

border merger 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 case 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

merger;

(b)

the type, name, registration number and registered

office of every merging company; and

(c)

the legal form and name proposed for the company

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resulting from the cross-border merger and the proposed

location of its registered office.

(1)

A registration made by the Registrar by virtue of

regulation 10 or 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 common draft terms of the cross-border merger

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 share exchange ratio referred to in

regulation 6(1)(b) has been inadequately set;

(ii)

that the cash compensation referred to in

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

(iii) the information submitted with regard to

the share exchange ratio referred to in paragraph (i)

above or the cash compensation referred to in paragraph

(ii) did not comply with the legal requirements.

(b)

Notice of the application 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 merger void or voidable, the Court shall

grant the Maltese merging company a period not exceeding one

(1) month 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 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

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the Maltese merging 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 common draft terms of the cross-border

merger, as provided for in regulation 6(1)(n) are inadequate. If the

creditor credibly demonstrates that, due to the cross-border merger, the

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

adequate safeguards from the Maltese merging company, the Court

shall uphold the creditor’s request and order that additional safeguards

shall be provided subject to the cross-border merger 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 Maltese merging company and the

Registrar.

(1)

Any party who feels aggrieved by the Court’s

judgement relating to an application in terms of regulations 12(4) or

(5), 15(1), 15(2) or 28,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 in any case 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

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

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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 merging 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, or

where the approval by the general meeting is not required in

accordance with these regulations, upon the lapse of one (1) month

from the publication referred to in regulation 10(7), each Maltese

merging company shall submit to the Registrar an application in the

prescribed form for registration, to obtain a pre-merger certificate.

(2)

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

signed by at least two (2) directors of the Maltese merging company,

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

shall be accompanied by the following documents

(a)

the common draft terms of the cross-border

merger;

(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, where applicable;

(g)

where the Maltese merging company carries on in

or from Malta any licensable activity, evidence of the consent

of the competent authority in Malta to the cross-border merger;

(h)

where the Maltese merging company is a public

company quoted on a recognized investment exchange,

evidence that the said exchange of the cross-border merger has

been notified and evidence of the consent of the listing

authority in Malta to the cross-border merger;

(i)

where any shares of the Maltese merging

company are pledged, the written consent of the pledgee.

(3)

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

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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 merger as set out in

these regulations; and

(b)

in respect of compliance with the rules concerning

employee participation, verify that the common draft terms of

the cross-border merger 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 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 merger

complies with all the relevant conditions and that all necessary

procedures and formalities have been completed, the Registrar

shall issue the pre-merger certificate

Provided that no pre-merger 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

regulation 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 merger

does not comply with all the relevant conditions or that not all

necessary procedures and formalities have been completed, the

Registrar shall not issue the pre‐merger certificate and shall

inform the Maltese merging company of the reasons for such

decision by not later than seven (7) daysfrom the lapse of the

period referred to in sub-regulation (2). In that case, the

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Registrar may give the Maltese merging 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-merger certificate

where it is determined that the cross-border merger 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 merger

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 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 merging 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 merger,

including those of the country or jurisdiction of the company

resulting from the merger;

(b)

obtain from those authorities and from the

Maltese merging company information and documents

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

terms of these regulations;

(c)

appoint an independent expert to assist with the

Registrar’s assessment

Provided that any independent expert appointed

by the Registrar for such purpose must be independent from the

Maltese company applying for the pre-merger certificate and

must have no past or current link with the Maltese merging

company which might affect the expert’s independence.

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A pre-merger certificate issued by the Registrar’s review

in accordance with regulation 18, shall attest to compliance by the

Maltese merging company with all relevant conditions and to the

proper completion of all procedures and formalities in terms of these

regulations.

(1)

When the company resulting from the merger has

or is to have its registered office in Malta the Registrar shall ensure that

the merging companies have approved the common draft terms of

cross-border merger on the same terms and, where appropriate, that

arrangements for employee participation have been determined.

(2)

For the purposes of sub-regulation (1), each merging

company shall submit to the Registrar

(a)

the common draft terms of the cross-border merger

approved by the company’s general meeting or, in the event that

the approval by the general meeting is not required in

accordance with Article 132(3) of Directive 2017/1132/EU, the

common draft terms of the cross-border merger approved by

each merging company in accordance with national law;

(b)

the pre-merger certificate or an equivalent

document issued by the jurisdiction of each merging company;

(c)

where in the case of a merger by formation the

company resulting from the merger shall be a Maltese company

(i)

the memorandum and articles of association

of the new company drawn up in accordance with the

requirements of the Act; and

(ii)

any other documents and information

required for the purposes of registering the new company

as a Maltese company.

(d)

in those cases where the country or jurisdiction of

any merging company is not a Member State or EEA State, a

reasoned opinion of one or more practising advocates

confirming that the proposed cross-border merger is permitted

by the laws of each such country or jurisdiction

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-merger certificate

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

proper completion of the applicable pre‐merger procedures and

formalities in the jurisdiction of each merging company, without which

the cross-border merger cannot be approved.

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(4)

After verifying that the provisions of these regulations

and all other applicable provisions of the Act have been complied,

including the payment of any applicable fees, the Registrar shall

(a)

without delay, and in any event, not later than ten

(10) working days from the submission of the documents

referred to in sub-regulation (2), issue a Certificate of

Completion of Cross-Border Merger which shall include the

name and registration number of the Maltese company resulting

from the cross-border merger, a brief reference to the

particulars of the merging companies, a reference to the type of

cross-border merger which has taken place, and the date on

which the cross-border merger takes effect;

(b)

cause a statement to be published in the Gazette or

on a website maintained by him confirming the completion of

the cross-border merger; and

(c)

the Registrar shall notify the registers in the

country or jurisdiction of each merging company that the cross-

border merger has taken effect.

(5)

The Registrar shall ensure that at least the following

information is entered in the register

(a) that the registration of the company resulting from

the merger is the result of a cross-border merger;

(b)

the date of registration of the company resulting

from the merger;

(c)

the registration number, name and legal form of

each merging company and of the company resulting from the

merger.

(1)

When a Maltese merging company is to cease to

exist as a result of the cross-border merger, and the Registrar is

notified by the foreign registry to whose jurisdiction the company

resulting from the merger is subject, of the effective date of the cross-

border merger, the Registrar shall immediately strike the name of the

Maltese merging company off the register and cause without delay a

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

him, indicating that the cross-border merger has been completed and

the provisions of article 401(1)(e) of the Act shall apply.

(2)

The Registrar shall ensure that at least the following

information is entered in the register

(a)

that the striking off or removal of the merging

company from the register is the result of a cross-border

merger;

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(b)

the date of striking off or removal of the merging

company from the register; and

(c)

the registration number, name and legal form of

each merging company and of the company resulting from the

merger.

(1)

A cross-border merger carried out in accordance

with regulation 3(2)(a), (c) and (d) shall, from the effective date of the

cross-border merger have the following consequences

(a)

all the assets and liabilities of the company being

acquired, including all contracts, credits, rights and obligations,

shall be transferred to the acquiring company;

(b)

the members of the company being acquired shall

become members of the acquiring company, unless they have

disposed of their shares; and

(c)

the company being acquired shall cease to exist.

(2)

A cross-border merger carried out in accordance with

regulation 3(2)(b) shall, from the effective date of the cross-border

merger have the following consequences

(a)

all the assets and liabilities of the merging

companies, including all contracts, credits, rights and

obligations, shall be transferred to the new company;

(b)

the members of the merging companies shall

become members of the new company, unless they have

disposed of their shares; and

(c)

the merging companies shall cease to exist.

For the avoidance of doubt the provisions of these

regulations shall be without prejudice to any laws in Malta or in any

other jurisdiction requiring the completion of special formalities before

the transfer of certain assets, rights and obligations by merging

companies becomes effective as against third parties and those

formalities shall be carried out by the company resulting from the

merger.

Upon a cross-border merger becoming effective, no

shares in the acquiring company shall be exchanged for shares in the

company being acquired held either

(a)

by the acquiring company itself or through a

person acting in his or her own name but on its behalf; or

(b)

by the company being acquired itself or through a

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person acting in his or her own name but on its behalf.

The rights and obligations of the merging companies

arising from contracts of employment or from employment

relationships and existing on the effective date of the cross-border

merger shall, by reason of that cross-border merger taking effect, be

transferred to the company resulting from the cross-border merger on

the date on which the cross-border merger takes effect.

A cross-border merger which has taken effect in

compliance with these regulations may not be declared null and void

Provided that the provision in the regulation 25 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 merger took effect.

Where a cross-border merger by acquisition is carried out

either by a company which holds all the shares and other securities

conferring the right to vote at general meetings of the company or

companies being acquired or by a person who holds directly or

indirectly all the shares in the acquiring company and in the company

or companies being acquired, and the acquiring company does not

allot any shares under the merger

(a)

regulations 6(1)(b), (c), (e) and (m), 9 and

22(1)(b) shall not apply;

(b)

regulations 7 and 11(1) shall not apply to the

company or companies being acquired.

Where a cross-border merger by acquisition is carried out

by a company which holds 90% or more but not all of the shares and

other securities conferring the right to vote at general meetings of the

company or companies being acquired, and the acquiring company or

the company being acquired is a Maltese merging company, the report

by an independent experts referred to in regulation 9 shall not be

required as long as the dissenting minority shareholders of the

companies being acquired have the right to have their shares

purchased by the acquiring company for an agreed consideration

corresponding to the fair value of their shares, or in the event of

disagreement regarding the fair value of such consideration, as shall be

determined by the Court. 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 merging company and the Registrar and

regulation 16 shall apply to any appeal relating to the application

referred to in this regulation.

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Where the laws of the jurisdictions of all of the merging

companies provide for the exemption from the approval by the general

meeting in accordance with the proviso to regulations 11(1) and 27, the

common draft terms of a cross-border merger or the information

referred to in regulation 10(1), (3) and (4) respectively and the reports

referred to in regulations 7 and 9, shall be made available at least one

(1) month before the decision on the merger is taken by the Maltese

merging company in accordance with the Act.

Any director of a Maltese company responsible for wilful

or negligent misconduct in the preparation and the implementation of

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

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

terms of cross-border merger 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.

These regulations are without prejudice to

(a)

the application of Council Regulation (EC) No

139/2004 of 20 January 2004 on the control of concentrations

between undertakings;

(b)

the Control of Concentrations

Regulations

promulgated under the Competition Act;

(c)

the application of Community legislation

regulating credit intermediaries and other financial undertakings

and any law in force in Malta made or introduced pursuant to

such community legislation.