Amendments to the Companies Act: Increased transparency requirements and enhanced powers of the Registrar.

On the 26^th of October 2021, Act LX of 2021, duly titled the “Companies (Amendment) Act, 2021)” (the “Amendment Act”) was duly published, bringing about new obligations for companies incorporated in Malta. The salient features of the Amendment Act are the following:

1. Enhanced identification details for documents delivered to the Registrar;

The Amendment Act imposes a new condition on companies to include identification details pertaining to date of birth, in the case of natural persons and to the company registration number, in the case of companies. This shall apply to all documents which are to be delivered to the Registrar for registration.

2. Possibility to include a service address and identification of an email address;

A new possibility to include detail related to a service address, rather than a residential address, of the subscribers, company secretary and directors has now been included. The Amendment Act has also included an obligation on companies to have stated within the memorandum and articles of association an electronic mail address along with the registered office in Malta.

3. Addition of an obligation to maintain a register of officers’ and shareholders’ residential addresses;

The Amendment Act introduces a new obligation on companies to ensure that the residential addresses of its officers and shareholders are maintained in a register which is to include the following detail (a) the names of each of the company’s officers and shareholders (b) the usual residential address of each of the company’s officers and shareholders and (c) the electronic mail address of each of the company’s officers and shareholders. It is to be noted that directors and company secretaries shall be bound to deliver to the Registrar a copy of the register and any changes made thereto, within 14 days after the date on which a change is recorded with the company. Such change in register shall also be accompanies with the statutory form provided in the Amendment Act. Penalties for late filing shall apply.

4. Amendments to the procedure by which a company may appoint directors;

A new obligation covering both private and public companies to ensure that directors consent to their appointment by way of signature of the memorandum and articles of association or by way of written consent delivered to the Registrar has been included. Whilst this obligation was already in force for public companies, the procedure has now been extended to private companies.

A new obligation of newly appointed directors to declare to the Registrar, in a prescribed form, whether such director is aware of any circumstances which may lead to his/her disqualification from appointment and/or to hold office of director, in Malta and/or in any other Member State has also been included.

5. Introduction of the Registrar’s right to order the removal of a director in specific instances;

The Amendment Act also introduces new provisions whereby the Registrar may order to the removal of a director of a company on the basis of disqualification and/or lack of authorisation as a company service provider in terms of the Company Service Providers Act. Such power is vested in the Registrar on an ongoing basis, that is, beyond initial incorporation stage, and accordingly, upon order of the Registrar, a company must proceed with the removal in question. A company shall also be bound to file a statutory form notifying the Registrar of such removal within 14 days of the respective date of removal.

In the event that a company does not comply with such order from the Registrar, the Amendment Act has vested the Registrar with the power to file an application in court to request the removal of the same, and the court is duly bound to convene a sitting within 30 days from such application and a conclusion must be reached within 5 working days from the original first hearing date. Adjournments of sitting shall also not be possible except with the consent of both parties or in exceptional circumstances as recorded by the court. Expenses in relation to such court hearings shall be borne by the company.

6. Addition of grounds upon which a person may be disqualified form holding office as a director or company secretary;

A new ground upon which disqualification of a director or company secretary may take place has been added, which pertains to instances when a person would be holding such officer without the relevant authorisation as a company service provider in terms of the Company Service Providers Act, when such authorisation is duly required at law.

The Amendment Act also introduces a new provision whereby the Registrar shall take into account disqualifications in another Member State, with the Registrar being vested with the power to refuse such appointment if so necessary.

7. Added duties pertaining to the office of the Registrar;

The duties of the Registrar have also been enhanced such that, the Registrar has now been vested with statutory duty to, inter alia:

1. Take all steps necessary and to ask for documentation as necessary to ascertain individuals’ identification and the correctness of such information;
2. Ensure that competent authorities and subject persons in terms of the Prevention of Money Laundering and Funding of Terrorism Regulations are provided with full access to the Registry’s website;

About the Author

This article has been authored by Kyle Scerri, CSB Group Assistant Manager - Regulated Industries and Compliance. For any additional information or support required please contact us on [email protected].