Malta · Share capital, shares and the registers

Run an investment company with variable share capital

the Companies Act, Chapter 386 · article 84, article 169 and the Fifth Schedule

An investment company with variable share capital is a company first and a scheme second, so the general provisions of the Act apply except where article 84 and article 169 displace them. The memorandum has to carry the statements article 84(2) requires and the object has to be limited in the way that provision demands.

The second trap is the accounts. The individual accounts and the directors' report follow article 169 and the Fifth Schedule rather than the ordinary layout, and the Fifth Schedule requires a comparative table covering the last three accounting periods. A company that files ordinary accounts has filed the wrong document.

The memorandum of an investment company with variable share capital must contain the statements required by article 84(2)(a) and must limit the object of the company as article 84(2)(b) requires. The memorandum or articles must provide for the matters listed in article 84(2)(c), including that the actual value of the paid-up share capital is at all times equal to the value described in that provision. An investment company with variable share capital may not issue partly paid shares (article 84(4)). The purchase by such a company of its own shares is governed by article 84(5), and shares which have been purchased are treated as provided in article 84(6).

An investment company with variable share capital must prepare its individual accounts as required by article 169(1), and the directors' report as required by article 169(2). In all other respects the annual accounts and the directors' report are governed by article 169(3).

The Fifth Schedule applies without prejudice to any requirements laid down by the competent authority, and paragraph 1 sets out the information required. The report must state the number of units in circulation (Fifth Schedule, paragraph 2) and the net asset value per unit or share (Fifth Schedule, paragraph 3). The composition of the portfolio must be given, distinguishing at least between the categories listed in Fifth Schedule, paragraph 4, together with the statements of developments concerning the assets required by paragraph 5.

A comparative table covering the last three accounting periods and including the information required by Fifth Schedule, paragraph 6 must be given. Details, by category of transaction, of the resulting amount of commitments must be given under Fifth Schedule, paragraph 7.

Files 11 and 32 of the MT-COMPANY pack are for the investment company with variable share capital and for no other form. File 11 checks the memorandum against article 84(2), asks whether any share has been issued partly paid, and walks every purchase of own shares against article 84(5) and (6). File 32 builds the annual accounts and the directors' report under article 169 and takes the Fifth Schedule paragraph by paragraph, asking for the number of units in circulation, the net asset value per unit, the composition of the portfolio by category and the three-period comparative table.

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

• File 11 · The investment company with variable share capital: memorandum, share capital and own shares
• File 32 · The investment company with variable share capital: annual accounts and directors' report

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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