Malta · Share capital, shares and the registers

Transfer shares, register a pledge and keep the registers

the Companies Act, Chapter 386 · articles 115 and 116, articles 117 to 120, articles 121 and 121A, article 122, articles 123 to 127A, and First Schedule, Part I, paragraphs 5, 6, 8, 12 and 18

The register of members is the company's proof of who owns what, and the Act treats it as such. It must be kept at the registered office, kept open to inspection except when duly closed, and the entries required by article 123(1) must actually be made. A register reconstructed after a dispute is worth very little.

The second trap is refusal. A company may not register a transfer without a proper instrument of transfer, and if it refuses to register a transfer it must send notice of the refusal within the period article 119(2) sets. Share warrants to bearer may no longer be issued at all, and any holder had to surrender an existing warrant under article 121A(1).

Where a company duly authorised by its memorandum or articles issues preference shares which are to be redeemed, the conditions in article 115(1)(a) to (e) apply. Preference shares redeemed under that article are treated as cancelled under article 115(3), and a notice of the redemption must be given under article 115(5). Article 79(2) and (4) apply to any consent or resolution given under article 116(4), and where no provision is made by the memorandum or articles for authorising the variation of class rights, article 116(5) applies.

Each share must be distinguished by its appropriate number, subject to the proviso to article 117. A transfer of shares is governed by article 118(1), and it is not lawful for a company to register a transfer except as article 118(2) permits. On the application of the transferor or the transferee, article 119(1) applies, and if a company refuses to register a transfer it must act as article 119(2) requires. Article 119(3) applies notwithstanding the model regulations, and a transmission is dealt with under article 119(4), with refusal under article 119(5). Every company must, within the periods set by article 120(1), deliver the certificates that provision requires, and in the case of a transfer or a transmission causa mortis the company acts under article 120(3).

No company may issue a share warrant to bearer (article 121). A holder of a share warrant had to surrender it before the expiry of nine months from the coming into force of the Companies (Amendment) Act, 2017 (article 121A(1)), and on surrender the company must cancel the warrant, enter the holder in its register and notify the Registrar as required by article 121A(2)(a), (b) and (c).

Securities may be pledged as article 122(1) allows, and notice of the pledge must be delivered by the pledgor or the pledgee to the Registrar under article 122(2). The pledgee's rights are governed by article 122(6), (9), (10), (11), (12) and (13), and notice of termination of the pledge must be delivered by the pledgee to the Registrar under article 122(15).

Every company must keep a register of its members and enter in it the particulars required by article 123(1), kept at the registered office under article 123(3), with the alternative arrangement permitted by article 123(3A). Every company must keep a register of debentures under article 124(1), kept at the registered office under article 124(2), with the same alternative under article 124(3A). Except when duly closed under article 126, the registers are open as article 125 requires. Where shares or debentures are held in the manner described in article 126A(1), that provision applies. Beneficial ownership is governed by article 127(1) and (4)(b) and by article 127A(2)(b).

Under the model regulations, every person whose name is entered as a member in the register is entitled to the certificate described in First Schedule, Part I, paragraph 5. The directors may make calls upon the members under First Schedule, Part I, paragraph 6, and if a sum called is not paid on the date appointed, First Schedule, Part I, paragraph 8 applies. The instrument of transfer must be executed as First Schedule, Part I, paragraph 12 requires, and a person becoming entitled on a transmission who elects to be registered acts under First Schedule, Part I, paragraph 18.

Files 17 to 21 and File 72 of the MT-COMPANY pack cover the shares themselves and the records that prove them. File 17 takes redeemable preference shares and the variation of class rights, File 18 every transfer and transmission, including the notice of refusal and the two-month and one-month certificate deadlines in article 120(1). File 19 asks whether any share warrant to bearer was ever issued and whether it was surrendered under article 121A(1). File 20 walks each pledge of securities and the two notices to the Registrar under article 122(2) and (15). File 21 audits the register of members, the register of debentures and the beneficial ownership entries, and File 72 checks the model regulations on calls, forfeiture and transfer where your articles have not displaced them.

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

• File 17 · Redeemable preference shares and variation of class rights
• File 18 · Transfer and transmission of shares and debentures
• File 19 · Share warrants to bearer and their surrender
• File 20 · Pledges of securities
• File 21 · The register of members, the register of debentures and beneficial ownership
• File 72 · Model regulations: shares, calls, transfer and transmission

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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