Act LX of 2021 – Amendments to the Companies Act

On the 26^th October 2021 amendments were introduced to the Companies Act, Chapter 386 of the Laws of Malta, by virtue of the enactment of Act LX of 2021 (herein the ‘Act’). These amendments aim to address enhancing transparency of information concerning the shareholders, directors and officers of companies registered in Malta.

THE SERVICE ADDRESS

The Act introduces the concept of providing the Registrar with the service address of the shareholders, directors and/or company secretaries rather than including their personal residential address in the Memorandum & Articles of Association and on any other forms submitted.

In the case such option is availed of then a document is required to be delivered to the Registrar for registration purpose which needs to state the name, service address and the date of birth of the natural person concerned. In the case of legal persons then the company registration number needs to included.

CONTENTS OF THE MEMORANDUM OF ASSOCIATION

In line with the introduction of the service address, Article 69 of the Companies Act was also amended. This Article provides a list of the contents of the Memorandum of Association which now provides that in the case of any documents delivered to the Registrar for registration, even within the memorandum, shareholders, directors and/or the company secretary may opt to either provide their residential address or their service address.

At any rate, the Act moreover imposes a mandatory obligation for all companies to include their electronic mail address in the Memorandum of Association.

REGISTER OF RESIDENTIAL ADDRESSES

The Act has introduced a mandatory obligation on each company to keep a register of the residential addresses of its officers and shareholders, which is to include the following information:

1. The names of each of the company’s officers and shareholders;
2. The usual residential address of each of the company’s officers and shareholders; and
3. The electronic mail address of each of the company’s officers and shareholders.

The register of residential addresses of the company’s officers and shareholders and any changes thereto are to be delivered to the Registrar within 14 days after the date on which the change is recorded with the company, together with the relevant statutory form. It is to be noted that this register will not be registered on the Malta Business Registry website and will not be open for public inspection. Failure to comply shall result in a daily penalty being imposed on every officer in default.

Moreover, the officers of the company are also required to maintain such register updated on a regular basis and to notify the Registrar of any changes to such register within 14 days from the date when the change is recorded by the company. 

APPOINTMENT OF DIRECTORS

The Act has introduced the requirement for the Registrar to receive the personal confirmation of the director desirous of being appointed to the Board of Directors for such appointment to be effected. This procedure was already adopted by directors being appointed to hold office with a public company however the Act has now extended such to the appointment of directors of a private company. Furthermore, such appointment shall also require the director to be appointed to also declare to the Registrar, in the prescribed form, whether he/she is aware of any circumstances which could lead to a disqualification from the appointment as director, or to hold office as a director of the company in terms of the Companies Act or otherwise in any Member State.

DISQUALIFICATION OF OFFICERS

Where the Registrar becomes aware that an officer of a company is disqualified or does not hold a licence issued under the Company Service Providers Act, Chapter 529 of the Laws of Malta, where such licence is required, the Registrar shall inform the company to remove the director in accordance with the provisions of Article 140 of the Act. The company has 14 days to comply from notification by the Registrar. In the case company fails to remove such officer, then the Registrar shall file an application in court requesting the removal of such officer from office.

ADDITIONAL POWERS AND DUTIES OF THE REGISTRAR

The provision of Article 401 of the Act has been amended to vest the Registrar with additional powers and duties. The most salient of which include:

1. Before registering a new company or return, the Registrar may take such steps and require such information or documentation as it may deem necessary in order to ascertain the individuals’ identification and correctness of the information submitted;
2. To provide competent authorities and subject persons, as defined in the Prevention of Money Laundering and Funding of Terrorism Regulations, with full access to the website maintained by the Registrar;
3. To deal with any aspect of online formation of companies, online registration of branches and online filing of documents and information; and
4. To issue, if deemed fit, procedures and guidance to companies and/or their officers as may be required for the carrying into effect of the provisions of the Act and any subsidiary legislation made thereunder.

ANNUAL RETURN

The Annual Return format will also be amended to include the electronic mail address of the company and the principal area of trading activity of the company.