This article was written by Dr Neeraj Bharwani, Dr Martina Bonnici and Dr Andrea Theuma
Act No. LX of 2021 (the “Act”), published in the Government Gazette on the 26th October 2021 introduced several amendments to the Companies Act, Chapter 386 of the Laws of Malta (the “Principal Act”). These amendments primarily relate to qualifications for a person to be eligible to act as a director and new address requirements for companies and their officers.
The Act allows for different dates to be established for different provisions in the Act to enter into force. While certain provisions came into force on the 30th October 2021, the remaining will come into force on the date that the Minister responsible for the registration of commercial partnerships will, by notice in the Gazette, establish.
The first of these amendments relates to Article 69 of the Principal Act. Article 69(1)(b), as amended by the Act, will allow for a shareholder’s service address to be included as an alternative to their residential address. This allowance is further extended to sub paragraph (g) of Article 69(1) where the director is permitted to provide their service address as an alternative to their residential address. A similar amendment is also being introduced vis-à-vis the company secretary. Furthermore, Article 69(1)(d) is also being amended to stipulate the necessity of providing an electronic mail address of the company as an additional requirement. The implication of these changes is that the residential addresses of shareholders, directors and secretaries will, once the Act is in effect, no longer need to be made publically available on the website of the Malta Business Registry and instead these persons can provide a service address.
The Act introduces a fresh requirement for companies to maintain a register of the residential addresses of its officers and shareholders. Such list is to comprise of an array of particulars including their officers’ and shareholders’ names, usual residential addresses and electronic mail addresses. The Act introduces a new Article 123A to the Principal Act which maintains that it is the onus of the directors or company secretary to deliver a copy of the register to the Registrar, and any changes which may have been made within fourteen (14) days of those changes coming into effect. Failure to comply with these requirements will result in a penalty unless the same is remedied within one (1) month. Moreover, the Registrar also reserves the power to not effect a change in officer/s or shareholder/s if the information required by this provision is not submitted, or if submitted, the Registrar is of the opinion that it is not accurate or up to date. Therefore whilst the residential address will no longer be available for public consumption, the obligation to provide this information to the Registrar for Companies will still subsist by means of this newly introduced register of addresses.
Furthermore, the Act also excludes the possibility of an “agent authorised by writing” to sign the memorandum of a company as an indication of consent for a person to act as a director. The new amendments thereby require a director to personally sign the memorandum of association of the company indicating his consent to act in that capacity. Alternatively, a director may sign and deliver a consent in writing to the Registrar for registration to act as a director. This procedure is being aligned with that relating to the appointment of directors in public companies and the procedure for the appointment of administrators of foundations and associations registered as legal persons.
Through the introduction of Article 139(4) to the Principal Act, a newly appointed director will be required to declare by prescribed form whether he is aware of any circumstances which might result in his disqualification under the provisions of the Principal Act or in any other Member State.
Consequent to the introduction of the Company Service Providers Act (the “CSP Act”), the Act seeks to align the Principal Act with the license requirements imposed by the former. As a result, Article 140(6) of the Principal Act is being amended to provide that where an officer of the company does not possess the applicable license under the CSP Act or is disqualified, and the Registrar becomes aware, the Registrar is to inform the company accordingly and the company is to proceed to remove the director in accordance with the provisions of Article 140 within fourteen (14) days of the notification. Where the company fails in its duty to remove the director following notification by the Registrar, the Registrar is to make an application before the Court requesting the removal of the defaulting officer.
Article 142(1) of the Principal Act, which details the circumstances where a director or company secretary is disqualified for appointment, is being extended to include the circumstance where an individual is acting as a director or company secretary of a CSP in terms of the CSP Act before having obtained the requisite authorization from the MFSA. The Registrar is will be empowered, pursuant to Article 142(6) of the Principal Act, to take any disqualification, or information relevant for a disqualification, in another Member State into consideration when refusing appointment of an individual as a director of a company, if such individual would have been disqualified as a director in the other Member State.
Finally, the Act also provides the Registrar with additional duties. Such additional duties comprise of taking the necessary steps to ascertain an individual’s identity and the correctness of information submitted to them, provide the competent authorities with full access to the Registrar’s website, to deal with any aspect of online formation of companies, online registration of branches and online filing of documents and information and issue any guidance or procedures to companies or their officers for the implementation of the Act, following consultation with the responsible Minister.
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. Martina Bonnici, Dr Neeraj Bharwani and Dr Andrea Theuma.