On the 18th June 2025, Bill no. 136, the Companies (Amendment) Bill (the “Bill”), was presented to Parliament by the Minister for the Economy, Enterprise and Strategic Projects for its first reading and was published in the Government Gazette on the 24th June 2025. The Bill proposes a number of amendments to the Companies Act (Chapter 386 of the laws of Malta) (the “Act”), across various areas. This article is the first of a two-part series which provides an overview of the main amendments to the Act.
The purpose of this first part is to set out and analyse the main amendments proposed to be made to the Act with respect to partnerships.
Increase in Contributions
The Act currently requires an amendment to the deed of partnership when any details provided within the deed of partnership are changed and that such changes shall not be effective until the amended deed of partnership is delivered to and registered by the Registrar of Companies (the “Registrar”). The Bill proposes the insertion of a new proviso to Article 19 of the Act whereby an exception to this rule is proposed to apply where the alteration consists in an increase in the contributions by a partner or a contribution by a new partner, such that the alteration or addition shall take effect immediately upon the receipt by the partnership of the contribution without the need of an amendment to the partnership deed.
The new proviso further imposes a notification obligation on the partner/s having the administration or representation of the partnership, who shall, within three months from the end of the calendar year in which any such increase or new contributions is effected, deliver to the Registrar for registration a resolution of the partners confirming that the contributions have been received during the preceding calendar year. Moreover, if such increase occurs in the same calendar year as when any interests in the partnership are to be assigned, a resolution of the partners confirming the increase in contributions must be delivered to the Registrar prior to such assignment (and thus during the same calendar year as the contributions).
The proposed amendments aim to address certain practical difficulties by eliminating the currently unavoidable interim period during which an individual, despite having contributed to the partnership, is not formally recognized as a partner solely because the amended deed of partnership has not yet been registered with the Registrar.
Assignment of Interests
The Act currently provides that an assignment of interests (whether in whole or in part) of any partner requires the prior consent in writing of all of the other partners (unless otherwise provided for in the deed of partnership). The Bill now distinguishes between inter vivos assignments and assignments causa mortis and clarifies that the written consent of the other partners is only required with respect to an inter vivos assignment. This reduces ambiguity and potential disputes among surviving partners and heirs.
The Bill also distinguishes between the assignment of interests and the reduction in contribution of a partner by removing any reference to said assignments from Article 21 of the Act and regulates such assignment by newly proposed provisos to Article 19(3) of the Act.
It is notable that the Bill no longer requires the effectiveness of the assignment of all of a partner’s interest to be conditional on the lapse of the three month creditor protection period. Nonetheless, in the event that good cause is shown by the creditor, the court is obliged to order the partnership interests to be re-transferred to the partner who originally held such interests (except where such partner is deceased) or allow the change in partners upon sufficient security being given. In event of such order being made by the court, any obligations undertaken on behalf of the partnership by the partner whose interests are to be re-transferred shall remain legally binding on the partnership and the other partners, and if any such partner with unlimited liability would have become personally liable in terms of the Act, he shall remain so liable even after ceasing to be a partner in accordance with the court order. This ensures that creditors are not prejudiced by a retroactive changes in partner status.
The above mechanism protects creditors without unduly delaying the legal effectiveness of internal changes, which is a notable departure from other provisions in the Act that require the lapse of the protection period for legal effect.
With respect to partnerships en commandite, the rights of creditors as described above shall not be applicable where there is a cessation of a limited partner or the appointment of a new limited partner. Similarly, a notice of cessation of a partner or the appointment of a new partner shall only be published by the Registrar limitedly in respect of any general partner with unlimited liability and not in respect of limited partners. This is aligned with their limited liability and reduces the requirement for unnecessary disclosures.
Concluding Remarks
The Bill seeks to address certain practical challenges while maintaining essential safeguards for creditors and stakeholders. These changes align the Act more closely with commercial realities, ultimately fostering a more efficient and responsive regulatory framework for partnerships.
The forthcoming second part of this series will explore additional amendments introduced by the Bill with respect to limited liability companies.
This document does not purport to give legal, financial or tax advice. Should you require further information or legal assistance, please do not hesitate to contact Dr. Michael Psaila and Dr. Nicole Portelli.