Company incorporation in malta
A company, like other commercial partnerships, such as partnerships en nom collectif and en commandite, is created by means of an agreement between its shareholders or members. It must be registered with the Registry of Companies. The limited liability company is the most commonly chosen vehicle for doing business in Malta, because it offers the advantage to shareholders of having their liability limited to the amount remaining unpaid on their shares (unless they are found guilty of wrongful or fraudulent trading). A company is considered as a legal person in its own right, and its assets and liabilities are separate from those of its shareholders.
Insofar as the name of the company is concerned, the founding members are free to choose it, however it will not be permitted if it is the same or too similar to that of an existing or reserved company. One may run a search to determine whether this is the case. The Registrar of Companies is also entitled to refuse to register a name which is offensive or otherwise undesirable. The desired named may be reserved for a period of up to three months.
A company may be ‘private’ (Ltd.) or ‘public’ (plc). A private company imposes restrictions on the right to transfer its shares, limits the number of its members to fifty, and prohibits invitations to the public to subscribe for any of its shares or debentures. A public company may offer shares or debentures to the public as long as it is registered and the application form for shares/debentures is accompanied with a prospectus.
The minimum share capital of a private company is €1,165, of which at least 20% must be paid up. For a public company it is €46,588, of which at least 25% must be paid up. This amount (or any greater amount) must be deposited in a bank account which is opened in the name of the company in formation. The deposit slip would then need to be presented to the Registrar of Companies as proof of the deposit.
The minimum number of directors in a private company is one, while in a public company it is two. In both cases there is no maximum number. Private companies must have a minimum of one shareholder (this is referred to as a single member company) and may have a maximum of fifty shareholders. Public companies must have at least two shareholders, but no maximum number is imposed.
In order to register a company, a Memorandum of Association, which is the instrument of constitution of the company, must be drawn up. This should contain: the name of the company; whether it is a private or a public company; its registered address (must be in Malta); the details of its subscribers; its objects; the amount of authorised and issued share capital; the number of shares taken up by each shareholder and the amount paid up on each share; where the shares are divided into different classes, the rights pertaining to the shares of each class; the details of the directors and the company secretary; details of the persons vested with the legal/judicial representation of the company; and the period, if any, which is fixed for the duration of the company.
The Articles of Association may also be drawn up. This is a document which governs the internal functioning of the company. If no Articles of Association are registered, the assumption is that the model Articles of Association provided in the First Schedule to the Companies Act has been adopted.
Provided that the Memorandum and Articles of Association, if any, comply with the requirements of the Companies Act, and the applicable registration fee is paid, these are registered and retained by the Registrar of Companies, who then issues a certificate of registration. This official document certifies that a new legal person has been created.
The registration fees are calculated according to the authorised share capital of the company, and vary depending on whether the registration is made in paper or electronic format. If, subsequently, the company increases its authorised share capital, the difference in registration fees is charged.
It should be noted that the registration of a company and the issue of a Certificate of Registration does not always guarantee that the company may begin operations immediately. Some companies are obliged to obtain an additional licence, permit or authorisation under other laws or regulations in force in Malta, depending on the activities that they intend to carry out.
If everything is in order, the process of incorporation may take as little as twenty-four hours, however this depends on the type of company and the amount of information and documentation required.
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This information has been provided merely for information purposes and does not constitute legal or specialist advice. Should more information be sought it is recommended to contact Valletta Legal.
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