Company Formation in Malta
Limited liability companies are regulated in terms of the Companies Act, Cap 386 of the Laws of Malta, which is largely modelled on the UK Companies Act of 1995 and in line with the European Union Directives on Company Law.
Limited liability companies are formed by means of a capital divided into shares held by its members, and the members’ liability is limited to the amount, if any, unpaid on the shares held. For a company to be validly constituted, a memorandum of association must be entered into, subscribed by at least two persons and registered.
Such a memorandum of association would include among others whether the company is public or private, the objects of the company, share capital amounts and details of directors. There is no requirement for any director of the company to be a Maltese national or resident.
Minimum Authorised & Issued Share Capital:
The minimum authorised and issued share capital of a company must be subscribed by at least two persons as follows:
- €46,587.47 in the case of a public company, and
- €1,164.69 in the case of a private company.
Where the authorised share capital is equal to the abovementioned minimum, it must be fully subscribed by shareholders in the memorandum, and where it exceeds such minimum, at least that minimum shall be subscribed in the memorandum.
The percentage of the nominal value of each share taken up to be paid up upon the signing of the memorandum must be:
- in the case of a public company, not less than 25%, and
- in the case of a private company, not less than 20%
Private Companies
A private company, besides the above requirements, is also required by its memorandum or articles to:
- restrict the right to transfer its shares;
- limit the number of members to fifty; and
- prohibit any invitation to the public to subscribe for any shares or debentures of the company.
Apart from the standard private company, a private company may be registered as a private exempt vehicle which allow less detailed financial information to be made public. A private exempt company may be formed if it, in addition to the conditions for it be considered to be a private company, contains the following conditions in its memorandum and articles of association:
- that the number of persons holding debentures of the company is not more than fifty; and
- that no body corporate is a director of the company, and neither the company nor any of the directors is party to an arrangement whereby the policy of the company is capable of being determined by persons other than the directors, members or debenture holders thereof.
Such a company may have a single member (either on registration, or through the acquisition of all its shares by one person), if, besides the above two conditions, the objects of the company specify the main activity of the company and the business of the company shall consist principally of that activity.
Public Companies
A public company may offer shares or debentures to the public but it may not issue any form of application for its shares or debentures unless the company is registered and the issue is accompanied by a prospectus (specific exemptions apply).
Investment Companies
Companies may also be established as investment companies with fixed or variable share capital. These vehicles are used for the purpose of establishing and licensing collective investment schemes.
Different Classes of Shares
Different classes of shares giving rise to different rights to the relevant shareholder may be established provided that a company must always ordinary shares in issue.
Process
Upon the filing of the necessary documents and the payment of necessary fees for the purpose of registration, the Registrar of Companies reviews all information and, if satisfied that it is complete and in accordance with Maltese law, issues a certificate of registration showing that the company has been officially registered. The time required for registration may be as little as 48 hours from the moment the said filing and payment occurs.