Proposed Amendments to Companies Act may require Amendments to all current Memorandums and Articles of Associations

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Bill No. 233 of 2021 proposes a number of amendments to the Companies Act, Chapter 386 of the Laws of Malta. These amendments relate to the qualifications required for a person to be a director of a company, the registration of electronic addresses and the obligation of every company to have a register of officers' and shareholders' residential addresses.

One of these amendments falls under Article 69 of Chapter 386, which reflects the contents which are to be established within the memorandum of association of a company. Currently, Article 69(1)(d) of the Companies Act provides that the memorandum of association is to state the registered office of the company. Under these new amendments, a further requirement shall be added wherein the memorandum will also need to state the electronic mail address of the company. Furthermore, subparagraph (g) of the Article 69(1) will also be amended to allow for the first directors of the company to provide a "service address" instead of a residential address within the memorandum of association.

While the current iteration of Companies Act stipulates a requirement for every company to keep a register of its members, as noted in Article 123 of the Act, Bill No. 233 of 2021 adds a further requirement for companies to also keep a register of the registered addresses of its officers and shareholders. This addition further states that such a register is to record details such as the names of its officers and shareholders; the usual residential address of its officers and shareholders; and the electronic mail address of each of the company's officers and shareholders.

This proposed provision also stipulates that it shall be the duty of the directors and of the company secretary to deliver a copy of this register to the Registrar of Companies, along with any changes which may be made, within fourteen days of the change. In default of this obligation, every officer of the company who is in default shall be liable to a penalty.

Amendments have also been made to Article 139 of the Companies Act, wherein the amendments propose that a person will not be capable of being 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. Furthermore, prior to being appointed as director of a company, such person shall declare to the Registrar of Companies as to whether he is aware of any circumstances which could lead to his disqualification from the appointment or the holding of the office of a director.

Bill No. 233 of 2021 also provides amendments which note that where the Registrar of Companies becomes aware that an officer of a company is disqualified or does not hold a licence in terms of the Company Services Providers Act, the Registrar is to inform the company and such company is to submit a removal of such officer within fourteen days of such notification. Where such officer is not removed, the Registrar shall file an application in court requesting such removal.

The bill also provides a further criterion for which a person may be disqualified from being appointed as director or company secretary of the company. The proposed addition states that any person who holds the office of a director or company secretary in terms of Company Services Providers Act, without holding the necessary authorisation from the Malta Financial Services Authority shall not be qualified to be appointed or hold the office of a director or company secretary.

The bill also introduces new duties to the Registrar of Companies, such as the duty to take all steps, prior to the registering of a new company or the return of a company and to require such information or documentation necessary to ascertain the individuals' identification and the correctness of the information submitted. Furthermore, the Registrar is to provide the 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, as well as deal with any aspect of the online formation of companies, the online registration of branches and the online filing of documents and information. 


Disclaimer

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. Zachary Galea.

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