Malta · Formation, registration and company status

Hold or change the status of a private, exempt, public or single member company

the Companies Act, Chapter 386 · articles 209, 210 and 211, article 212, and article 213

Status is not a label, it is a set of restrictions. A private company may not offer shares or debentures to the public, its articles must restrict the transfer of shares, and an exempt company keeps its exemption only while every condition in article 211(2) continues to be met.

The second trap is the change itself. An alteration of status does not take effect until the conditions in article 213 are satisfied, and each direction of change has its own sub-article. A single member company has extra duties: the single member exercises the powers of the general meeting and must record in writing every agreement between himself and the company.

A private company may not offer to the public, whether for cash or otherwise, the securities described in article 209(2), and the further restrictions in that provision apply. In the case of a private company, article 210 applies subject to the rest of the Act. A private company has the status of an exempt company if the conditions in article 211(1) are satisfied, and those conditions are that the number of persons holding debentures of the company is not more than fifty (article 211(2)(a)) and that no body corporate holds the interests described in article 211(2)(b).

When a company becomes a single member company through the acquisition of shares, article 212(4) applies, and where a person becomes a single member as a result of acquiring shares, article 212(5). The single member exercises the powers of the general meeting of the company under article 212(7) and must record in writing all agreements between himself and the company under article 212(8). When a company ceases to be a single member company it must, within fourteen days, deliver to the Registrar a notice specifying that fact, and the article then ceases to apply as article 212(10) provides.

An alteration under article 213(1) does not take effect unless the conditions in article 213(2) are satisfied, and the same pattern applies to the alterations described in article 213(4), (7) and (9), whose conditions are in article 213(5), (8) and (10) respectively.

Where a private company changes its status to a public company, article 213(11) applies, and a private company which proceeds to change its status to a public company is subject to article 213(12). Where a public company changes its status to a private company, article 213(13) applies.

Files 44, 45 and 46 of the MT-COMPANY pack decide and defend your status. File 44 asks how many persons hold debentures, whether any body corporate holds an interest caught by article 211(2)(b) and what the articles say about the transfer of shares, then states whether the exempt status holds. File 45 asks whether the company has one member, when it became a single member company and whether the written record of agreements between the member and the company under article 212(8) exists, and applies the fourteen-day notice in article 212(10) if the position has changed. File 46 walks each direction of a change of status and checks that the conditions in the matching sub-article of article 213 were satisfied before the change was treated as effective.

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

• File 44 · The private company and the private exempt company
• File 45 · The single member company
• File 46 · Changing status between a private, an exempt and a public company

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

Back to the Maltese library →