Malta · Formation, registration and company status

Form the company, subscribe the capital and register it

the Companies Act, Chapter 386 · articles 2 and 6, articles 68 to 74, and articles 76, 79 and 82

Formation looks finished on the day the memorandum is signed. It is not. The objects may not be stated simply as any lawful purpose, the name must clear the prohibitions in article 70, the minimum authorised capital must be subscribed by the right number of persons, and the paid-up percentage is tested at signature and not later.

The second trap follows registration. A consideration other than cash needs an expert's report delivered to the Registrar before the shares are issued, every alteration to the memorandum or articles has to be delivered within a fixed period, and every business letter and order form must carry the prescribed particulars. Companies that treat the stationery rule as cosmetic find it in the first inspection.

In all its business letters and order forms, whether in paper form or otherwise, a commercial partnership must state the particulars listed in article 6(1) to (4), and every commercial partnership registered under Part XI is subject to article 6(5). An officer signing a document on behalf of a commercial partnership is subject to article 6(6). Where a commercial partnership is being wound up, every letter, invoice or other document is subject to article 6(7). Where a reference is made to the capital of a company, article 6(8) applies. Article 2(5) and (6) govern when a document required to be delivered to the Registrar is treated as delivered.

A company is not validly constituted unless a memorandum of association is entered into and subscribed as required by article 68. The memorandum must state whether the company is public or private and the other matters listed in article 69(1), and in the case of a public company the document required by article 69(2) must be annexed. It is the duty of the directors and of the company secretary to ensure compliance under article 69(4). The objects of a company may not be simply stated to be any lawful purpose or trade (article 71).

A public company may be registered under article 70(1) and a private company under article 70(2), subject to article 70(3) to (6). A company may not be registered by a name caught by the prohibitions in article 70(4), nor by a name including the word fiduciary except as allowed by article 70(5). The authorised share capital must be not less than forty six thousand five hundred and eighty seven euro and forty seven cents subscribed by at least two persons in the case of a public company, and the lower figure set out in the same provision for a private company (article 72(1)). Where the authorised share capital equals that minimum, article 72(2) applies.

In the case of a public company not less than twenty five per cent, and in the case of a private company not less than twenty per cent, of the nominal value of each share taken up must be paid up on the signing of the memorandum (article 72(3)). The ordinary shares of a company are not redeemable and article 72(4) requires the company to have shares that are not redeemable. Only preference shares may be redeemable as provided in article 72(5). The consideration for the acquisition of shares is governed by article 73(1), and where shares are issued for a consideration other than cash a report must be drawn up before the issue (article 73(4)) and delivered to the Registrar for registration before the shares are issued (article 73(6)).

A company may not acquire, within two years of its authorisation to commence business, any asset belonging to a subscriber to the memorandum or to a member for a consideration equivalent to at least one tenth of the issued share capital except as article 74(1) allows, and the report required by that provision must be delivered to the Registrar under article 74(2). Where the memorandum or articles are drawn up in a public deed or a private writing enrolled in the records of a notary, article 76(2) applies, and delivery is made by any one of the subscribers under article 76(3). It is the duty of the directors and of the company secretary to deliver every alteration to the Registrar under article 79(2), with the exception in the second proviso to that sub-article. All documents supplied to the Registrar must be authenticated as required by article 82(2).

File 1 of the MT-COMPANY pack runs first. It walks the identification rules in articles 2 and 6, then builds ENTITY_PASSPORT.md, which records which of the 84 working files apply to your partnership. No other file starts without that passport. Files 7, 8 and 9 then take the memorandum, the objects clause and the name through article 68 to 71, ask you for the authorised capital figure and the amount actually paid up on signature so that the 25 and 20 per cent tests in article 72(3) can be applied, and check whether any consideration other than cash triggered the expert's report under article 73(4) and the two-year restriction in article 74(1).

This situation is covered by these files from the pack MT-COMPANY

• File 1 · Identification of the partnership in its documents and correspondence
• File 7 · Company formation: the memorandum, its contents and the company name
• File 8 · Share capital at formation: authorised capital, consideration for shares and the expert's report
• File 9 · Registration of the company and delivery of documents to the Registrar

ComplianceSME tracks the Companies Act and issues update files through the membership, so that you are never working from a superseded version. Membership

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