Malta · Partnerships, limited partnerships and oversea companies

Constitute and run a partnership en nom collectif or en commandite

the Companies Act, Chapter 386 · articles 7A, 9, 13, 14 and 15, articles 19 and 25 to 34, articles 36 to 38, 42 and 43, articles 40 and 44 to 50, and articles 51A, 54, 55, 59, 60, 63, 65 and 66

A partnership is constituted by a deed, and until the deed is delivered for registration and registered under article 15 there is nothing to rely on against third parties. Every change in the administration or the representation, every extension of the fixed duration and every departure of a partner has to be delivered for registration in its own right.

The second trap is the winding up. The notice of dissolution has a fourteen-day limit, the liquidator has fourteen days from appointment to file notice of it, the liquidator may not undertake any new transaction, and no assets may be distributed among the partners until the creditors are dealt with. Partnerships that treat the winding up as an informal wind-down miss all four.

A partnership which becomes subject to article 7A is governed by article 7A(2), and when it ceases to be so subject by article 7A(3). Where such a partnership is dissolved, article 7A(6) applies, and as soon as its affairs are fully wound up the liquidator acts under article 7A(7)(a). A partnership may not be registered by a name caught by article 9(2). A partnership is not validly constituted unless a deed of partnership is entered into as required by article 13, and the deed must state the name and residence of each partner and the other matters in article 14(1). The deed must be delivered for registration to the Registrar as required by article 15(1) to (3).

Every change relating to the administration or the representation of a partnership must be delivered for registration under article 19(1), an extension of the fixed duration under article 19(2), and a partner ceasing to be a partner under article 19(3). In so far as the deed does not otherwise provide, administration is governed by article 25(1), and a partnership may not be bound in favour of third parties except as article 25(2) and (3) allow. The accounting obligations are set out in article 26(1). A person who becomes a partner of an existing partnership is subject to article 27(1). A partnership may not distribute profits until it has made good all losses (article 28).

A partner may not compete with the partnership without the express consent required by article 30(1). On the death of a partner, article 31(1) applies, and where the deceased partner has bequeathed his interest by legacy, article 31(2). A decision to exclude a partner must be notified with its reasons under article 32(2). A partner is not entitled to continue as a partner in the cases listed in article 33, and the liquidation of the interest of such a partner is governed by article 34(2).

On dissolution, and in no case later than fourteen days after it, the partners having the administration or the representation must deliver a notice of the dissolution to the Registrar (article 36(1)). Where the manner of winding up is not provided for, a liquidator is appointed under article 37(1), and the liquidator must within fourteen days after appointment deliver a notice of his appointment to the Registrar (article 37(3)). A vacancy in the office of liquidator is filled under article 38(2). Until provision is made for the winding up, article 42 applies, and on the appointment of a liquidator the administering partners act under article 43(1).

All costs, charges and expenses properly incurred in the winding up rank as provided in article 40. The liquidator represents the partnership under article 44(1) and may not undertake any new transaction (article 44(2)); where there is more than one liquidator they act jointly under article 44(3). The liquidator may not distribute any assets among the partners except as article 45(1) allows, must inform the partners at their request under article 46(1) and must render the account required by article 46(2). The account is served on each partner by judicial act under article 48(1), and on approval the liquidator delivers to the Registrar the documents required by article 49(1) and (2). The accounting records and documents are kept as required by article 50(1) to (4).

A partnership en commandite or limited partnership subject to article 51A is governed by article 51A(2), (3) and (7)(a). The contribution of a limited partner may not include personal services (article 54), and the deed of partnership must comply with article 55. A limited partner may not perform any act of administration nor transact business as prohibited by article 59(1). At the end of each accounting period the balance sheet and profit and loss account are dealt with under article 60. Changes in the deed are governed by article 63(2), determinability by article 65(1), and the duties of the partner vested with the administration or representation by article 66(4), (9), (10) and (12)(a).

Files 2 to 6 of the MT-COMPANY pack cover both partnership forms. Files 2 and 3 ask for the date of the deed, the date it was delivered for registration and every subsequent change in the administration, the representation or the membership, then test each against articles 15 and 19. File 4 asks for the date of dissolution and the date of the liquidator's appointment and applies the two fourteen-day limits in articles 36(1) and 37(3). File 5 takes the conduct of the winding up, the prohibition on new transactions, the restriction on distributions to partners and the keeping of the records. File 6 covers the partnership en commandite, the position of the limited partner and the annual balance sheet.

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

• File 2 · Partnership en nom collectif: constitution, name, deed and registration
• File 3 · Partnership en nom collectif: administration, partners' duties and changes in membership
• File 4 · Partnership en nom collectif: dissolution and appointment of a liquidator
• File 5 · Partnership en nom collectif: conduct of the winding up, accounts and records
• File 6 · Partnership en commandite or limited partnership: constitution, limited partners and accounts

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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