Amendments to the Companies Act

On the 26 October 2021, Act LX of 2021 was enacted, officially introducing certain amendments to the Companies Act, Chapter 386 of the Laws of Malta (the “Act”).

A list of the applicable amendments is being set out below:

1. One of the amendments brought about by the enactment of the Act is the introduction of a service address which may be used as an alternative to a residential address. The Act provides that where a document that is subject to registration with the Registrar of Companies (the “Registrar”) is required to state the name and residence of a person, a service address may be provided instead of the person’s residence. Furthermore, such documents require the date of birth in the case of a natural person, or the company registration number where an officer or shareholder is a body corporate.

2. Some amendments have also been made to Article 69 of the Act. Currently the Companies Act provides that the Memorandum of Association should state the registered office of the company.  Under these new amendments, it is now mandatory for companies to include in the Memorandum of Association, the registered office in Malta and the electronic mail address of the company.

3. The requirement of a new register has been introduced for the purposes of recording the residential addresses of company officers and shareholders, which must include the following particulars:

a. the names of each of the company’s officers and shareholders;

b. the usual residential address of each of the company’s officers and shareholders, provided that if any such address is the same as the service address, the register of the residential addresses in question need only contain an entry to this effect;

c. the electronic mail address of each of the company’s officers and shareholders,

A copy of such register and any changes thereto, is required to be delivered to the Registrar within 14 days after the date on which the change is recorded with the company, accompanied by the relevant statutory form.

In default of this obligation, every officer of the company who is in default shall be liable to a penalty of EUR465.87, unless the default is remedied within 1 month from the receipt of a notice of default sent by the Registrar, and a daily penalty of EUR23.29 will additionally be payable for everyday until any such default continues.

It is pertinent to note that the register of the residential addresses of the company’s officers and shareholders as submitted to the Registrar shall only be used for regulatory purposes and shall not be open for public inspection

4. Amendments have also been made to Article 139 of the Companies Act, wherein currently, for public companies, a person could not be appointed as a director of the company unless he has personally signed the memorandum of association of the company, thereby indicating his consent to act as a director, or has signed and delivered to the Registrar of Companies his consent in writing to act as a director. This requirement of the directors’ consent previously was imposed solely in respect of persons seeking to act as director on public companies. It has now been extended to persons seeking to act as directors of all companies, irrespective of whether such company is public or private.

Furthermore, prior to being appointed as director of a company, such person shall declare to the Registrar of Companies as to whether s/he is aware of any circumstances which could lead to his/her disqualification from the appointment or to hold office as a director of a company under the provisions of the Companies Act or under the laws of another Member State.

5. Where the Registrar becomes aware that an officer of a company is disqualified or does not hold a licence in terms of the Company Service Providers Act, Chapter 529 of the Laws of Malta (where such licence is required), the Registrar shall inform the company and the company shall be required to remove the director in accordance with the provisions of Article 140 of the Act. If the company fails to remove such officer, the Registrar shall file an application in court requesting such removal.

6. Where a person holds the office of director or of company secretary as a company service provider in terms of the Company Service Providers Act without having obtained the necessary authorisation by the Malta Financial Services Authority, such person shall be disqualified from appointment and from holding office.

The Registrar may also refuse the appointment of a person as a director of a company where, at the time of such appointment, a disqualification (or similar information) is in force in another Member State.

7. The Act also introduces new powers and duties to the Registrar of Companies as detailed below;

a. Prior to the registration of a new company or return, the Registrar may take such steps and require such information as may be deemed necessary in order to ascertain the individuals’ identification and correctness of the information submitted;

b. To provide competent authorities and subject persons, as defined in the Prevention of Money Laundering and Funding of Terrorism Regulations, with full access to the website maintained by the Registrar;

c. To deal with any aspect of online formation of companies, online registration of branches and online filing of documents and information; and

d. To issue, if deemed fit, procedures and guidance to companies and/or their officers as may be required for the carrying into effect of the provisions of the Act and any subsidiary legislation made thereunder;

e. Where the Registrar, in his capacity as data controller, is obliged to processes personal data for the purposes of the Companies Act, s/he shall comply with the principles relating to processing of personal data under Article 5 of Regulation (EU) 2016/679 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC (the General Data Protection Regulation), and shall accordingly apply appropriate measures to ensure a level of security appropriate to the risk posed, and to integrate the necessary safeguards into the processing in order to protect the rights and freedoms of data subjects..

8. Amendments have furthermore been made to the Annual Return (statutory Seventh Schedule), in particular with reference to the paragraphs 1 and 2 thereof, which provisions, as extracted here-below, now necessitate the inclusion of additional information;

a. Address - Address of the registered office and electronic mail address of the company) and

b. Principal Area of Trading Activity and Summary of Share Capital”.

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