Malta Company Returns and Filings
Company returns and filings
The Companies Act requires that a number of returns and documents be prepared and filed with the Registrar of Companies, on a periodical basis, or upon the occurrence of a number of instances. The duty of filing are incumbent on all officers of the Company, albeit some forms, such as the Claim for extension of period allowed for laying accounts by the company – (Form U) – can only be executed by the directors. Other than these exceptions however, the filing of these forms and returns, is a duty which is typically delegated to the company secretary. The most salient returns and filings can be summarised as follows:
Section 73 report – Issue of shares for a consideration other than in cash
The issuance of shares has to be undertaken against a consideration of payment, which is either a cash payment or a consideration in kind. In the latter case, an expert’s report is to be drawn up before the shares are issued by experts independent of the company and approved by the Registrar.
The aforesaid report should contain a description of each of the assets, comprising the consideration as well as the methods of valuation which have been used and must state whether the values arrived at by the application of these methods correspond at least to the number and nominal value, and, where applicable, to the premium on the shares to be issued for them.
Crucially, the report must be delivered to the Registrar before the shares are issued, and the validity of the report is effective, not as from date of filing, but as from date of delivery to the Registrar.
The Article 73 report is also possible for the original subscription of shares – in which case the expert’s report should also precede the formation documents.
Transfer to company of non-cash assets in first two years
Article 74 of the Companies Act prohibits a company from acquiring, within two (2) years of its authorisation to commence business, any asset belonging to a person who subscribed the company’s memorandum or who is a member of the company for a consideration which is equivalent to at least 10% of the issued capital of the company. A number of exceptions to this rule are possible, provided a number of conditions are met, which rules may be summarised as possible:
the asset to be received by the company, and any consideration other than cash to be given by the company, must have been valued by one or more experts who are independent of the company and approved by the Registrar;
a report thereon must have been made to the company during the six (6) months immediately preceding the date of the relative agreement;
the terms of the agreement must have been approved by ordinary resolution; and
not later than the giving of notice of the meeting at which the resolution is proposed, copies of the resolution and of the report shall have been circulated to the members of the company entitled to receive notice of the meeting and, if the person with whom the agreement in question is proposed to be made is not then a member of the company so entitled, to that person.
Amendments to the memorandum or articles of association
The amendment to the memorandum and articles of association requires an extraordinary resolution, and a submission of the resolution giving effect to such change, together with an updated copy of the memorandum and articles of association are to be delivered to the Registrar of Companies, within fourteen (14) days of the date of the resolution, giving effect to such change.
The updated memorandum and articles of association shall supersede any previous versions of the memorandum and articles of association.
Increase in issued share capital
As a rule, any increase in the issued share capital of a company, must be decided upon by an ordinary resolution of the company, unless the memorandum or articles require a higher percentage than that normally required for an ordinary resolution.
It is not unusual however, for the general meeting to give a general mandate, by means of an ordinary resolution, for the board of directors to issue shares up to the maximum amount specified in the memorandum and articles. When such authority is granted, this mandate is valid for five (5) years, which may in turn, be further renewable for further periods of five years each.
Where such permission is not contained in the company’s memorandum or articles, the same authority may be given to the board of directors by an extraordinary resolution. In any case, a copy of such resolution, ordinary or extraordinary, must be delivered to the Registrar of companies.
Return of allotments
Whenever a company makes any allotment of shares, it is obliged, by not later than one (1) month thereafter, to deliver to the Registrar for registration a return of the allotments (on a form known as a “Form H”) stating the following grounds:
number and the nominal amount of the shares comprised in the allotment;
the names and addresses of the allottees and the amount paid and that due; and payable, on each share, whether on account of the nominal value of the share or by way of premiums.
In the case of shares allotted as fully or partly paid up for a non-cash consideration, there should also be delivered to the Registrar, documentation relative to the allotment, in support of the consideration respect of which the allotment was made, and the return of allotments should also indicate the extent to which the shares are to be treated as paid up, and the consideration for which they have been allotted.
In the case of shares in a public company offered to the public for subscription, the return of allotments should be accompanied by a declaration that the requirements of article 97 of the Companies Act have been adhered to, which must state:-
there has been subscribed and paid in cash the amount stated in the prospectus as the minimum amount which, in the opinion of the directors, shall be raised by the issue of share capital in order to provide for the preliminary expenses, purchase of property and working capital as specified in the prospectus, and
the capital is subscribed in full, whether or not in cash, or the conditions stated in the offer for allotment, where the offer is not fully subscribed, are satisfied.
Acquisition by company of its own shares
The acquisition of a company of its own shares, is only possible if a number of conditions are satisfied – one such condition is that the company must be authorised by means of an extraordinary resolution, to be delivered to the Registrar of Companies which, resolution must clearly and unequivocally establish:
the terms and conditions of such acquisitions and in particular the maximum number of shares to be acquired;
the duration of the period for which the authorisation is given and which may not exceed eighteen months; and
in the case of acquisition for valuable consideration, the maximum and minimum consideration.
Redemption of preference shares
Whenever preference shares are redeemed, a notice of redemption – “Form T(1)” – should be delivered by the company to the Registrar for registration within fourteen (14) days after the date of redemption.
Delivery of Notice of transfer or transmission of shares
Whenever the need arises for the transfer or for the transmission causa mortis of shares, the company, must, within fourteen (14) days after the date on which a transfer of any such shares is registered with the company, and within one month from the date on which any such shares transmitted causa mortis have been registered in the name of the person entitled to be registered as the holder thereof, deliver to the Registrar for registration a notice of the transfer or the transmission causa mortis stating the names and addresses of the transferees or the names and addresses of the persons entitled to the shares transmitted causa mortis, as the case may be.
Pledging of securities
Whenever securities in a company have been pledged, notice of the pledge should be delivered by the pledgor or the pledgee to the Registrar for registration within fourteen days from the granting of the pledge – by means of the filing of a Form T2 form.
Notice of the pledgee must also be given to the company which should record the pledge in the corresponding register of securities. On the termination of the pledge, another form (Form T(3)) should be used to give notice thereof to the Registrar, to sanction the lifting of such collateral being held over such shares.
The form should be filed within fourteen days of the termination of the pledge. The notice of the termination of the pledge should be signed by the pledgee.
Removal of director
Article 140 of the Companies Act, prescribes that a company may remove a director before the expiration of his period of office, by a resolution taken at a general meeting of the company and passed by a member or members having the right to attend and vote, holding in the aggregate shares entitling the holder or holders thereof to more than fifty per cent of the voting rights attached, to shares represented and entitled to vote at the meeting. This mechanism cannot be delegated upon, irrespective of any wording in the memorandum and articles of association and private agreement between the parties. The director shall be allowed time to make representations during the meeting advocating for his removal, and thereinafter, a Form K, is filed with the registrar of companies, signaling such removal.
Changes amongst officers and persons vested with representation
Whenever there are changes to the directors, to the company secretaries or of the persons vested with its representation, the company is obliged to send to the Registrar for registration a return of such change. The return (on a form known as a Form “K”) must include the following details:
the date of the change,
the name, residence and identity card or passport number of any new director, company secretary or person vested with the representation of the company
The form K should be filed within fourteen (14) days of the date of the change, so occasioned.
Removal of auditor
Similarly to the provisions regulating removal of directors, a company may remove the auditor from office by a resolution taken at a general meeting of the company and passed by a member or members having the right to attend and vote, holding in the aggregate shares entitling the holder or holders thereof to more than fifty per cent of the voting rights attached to shares represented and entitled to vote at the meeting, and such power may not be delegated upon by any contrary provision to the memorandum and articles of association. Notice of such removal, must be provided to the Registrar of Companies.
Likewise, if the auditor is not removed, but merely resigns his office, the company should serve notice of such resignation to the registrar of companies within fourteen days of the deposit of the notice of resignation.
As part of its corporate governance, the company is obliged to file with the Registrar on a yearly basis, its annual return, in the format set forth in the Seventh Schedule to the Companies Act, should show the matters specified therein and should be made up to the date of the anniversary of the company’s registration.
The annual return, duly completed, must be signed by any one director or by the company secretary and should be forwarded to the Registrar for registration within forty-two (42) days after the date to which it is made up.
Single member company
Companies, of their very nature, imply a plurality of subscribers. However, Article 212(1) of the Companies Act allows for the provision of ‘single member companies’, conditional to the satisfaction of statutory conditions.
However, it may be possible for a company to become a single member company through the acquisition of all the shares in the company, or transmission of shares causa mortis.
Upon this eventuality, the company shall, within fourteen (14) days, deliver to the Registrar a notice – called Form I – whereby notice is given that the company has become a single member company, stating the name and residence of that single member and confirming adherence to the provisions of article 212(1) of the Companies Act.
When a company ceases to be a single member company, it is obliged, within fourteen days, to deliver to the Registrar for registration a notice specifying the fact that it is no longer a single member company.
Notice of dissolution
If a resolution for the dissolution and consequential voluntary winding up of a company has been passed, the company must, within fourteen days after the date of the dissolution, deliver a notice of the resolution to the Registrar for registration.
This notice may, until such time as a liquidator is appointed, be signed by company secretary or other officer of the company.
Terms of merger
The draft terms of merger drawn up by the directors of the acquiring company and of each of the companies being acquired need to be signed by at least one director and by the company secretary of each of the amalgamating companies. The draft terms of merger should be forwarded to the Registrar for registration.
Terms of division
The draft terms of division for each of the companies involved in a division should be signed by at least one director and the company secretary of each of the companies involved in the division. The same person cannot sign both as a director and a company secretary. The draft terms of division should be forwarded to the Registrar by each company for registration.
For more thorough information about company returns and filings , and bespoke advice, regarding the correct corporate governance, you are kindly requested to contact one of our officers. Contact us to initiate the incorporation of a Maltese registered company and start reaping the full benefits of an onshore, low-tax, EU jurisdiction. Simply fill in the contact box below or contact us by email on firstname.lastname@example.org