Act LX of 2021 – Amendments to the Companies Act
Author: Sarah Grima, Senior Associate, Fenech & Fenech Advocates
On the 26 October 2021, Act LX of 2021 was enacted, which introduces a number of amendments to the Companies Act (Chapter 386 of the Laws of Malta) (the “Companies Act”), aimed at enhancing transparency of information concerning directors and shareholders of companies registered in Malta.
A list of the substantive amendments in question is being set out here-below:
1. Where a document, that is subject to registration with the Registrar of Companies in Malta (the “Registrar”), is required to state the name and address of a person, such address may be either the residence or service address of such person, and any such document shall be deemed to additionally require the date of birth in the case of a natural person or the company registration number in the case of a body corporate;
2. The Memorandum of Association shall include specific reference to the electronic mail address of the company, and in line with the above, shall furthermore refer to either the residence or service address of the officers and shareholders of the company;
3. The requirement of a new register has been introduced for the purposes of recording the residential addresses of company officers and shareholders, which must include the following particulars:
i.the names of each of the company’s officers and shareholders;
ii.the electronic mail address of each of the company’s officers and shareholders; and
iii.the usual residential address of each of the company’s officers and shareholders, provided that if any such address is the same as the service address, the register of the residential addresses in question need only contain an entry to this effect.
A copy of such register and any changes thereto, is required to be delivered to the Registrar within 14 days after the date on which the change is recorded with the company, accompanied by the relevant statutory form.
Upon failure to comply with the above-stated obligation, every officer of the company who is in default shall be liable to a penalty of EUR465.87, unless the default is remedied within 1 month from the receipt of a notice of default sent by the Registrar, and a daily penalty of EUR23.29 will additionally be payable for everyday until any such default subsists.
It is relevant to note that the register of the residential addresses of the company’s officers and shareholders as submitted to the Registrar shall only be used for regulatory purposes and shall not be open for public inspection.
4. The requirement of the directors’ consent previously imposed solely in respect of persons seeking to act as director on public companies (either via the execution of the memorandum or via a separate consent in writing delivered to the Registrar for registration), shall apply to persons seeking to act as director on all companies generally and without distinction.
5. Upon being appointed director of a company, any such person shall be required to declare to the Registrar, in the prescribed form, whether s/he is aware of any circumstances that could lead to his/her disqualification either from appointment or to hold office as a director of a company under the provisions of the Companies Act or under the laws of another Member State;
6. The disqualifications for appointment or to hold office as a director or company secretary on a company have now increased so as to include the additional new circumstance wherein a person is holding any such office as a company service provider in terms of the Company Service Providers Act (the “CSP Act”) without having obtained the necessary authorisation by the Malta Financial Services Authority to provide such service.
7. Additional powers and duties have been provided to the Registrar, as further detailed below:
-Where the Registrar becomes aware that an officer of a company is disqualified or does not hold a licence under the CSP Act (where so required), the Registrar shall inform the company and the company shall be required to proceed with the removal of such person in accordance with the Companies Act, and to submit the required statutory form to the Registrar for registration within 14 days of the said removal. In default, the Registrar shall file an application in court requesting the removal of such officer from office (with expenses to be borne by the company);
-Any disqualification in force or any information relevant for disqualification in another Member State, shall be taken into account, and the Registrar may refuse the appointment of a person as a director of a company where, at the time, such person would be disqualified from acting as a director in another Member State;
-Prior to registering a new company or statutory return, the Registrar shall take such steps and require such information or documentation as may be deemed necessary, in order to ascertain an individual’s identification, and the correctness of all information submitted;
-If the information required to be submitted to the Registrar in terms of the new register of residential addresses is not submitted, or if the Registrar is not satisfied that the company has provided accurate and up to date information on its officers and shareholders as required in terms of the Companies Act, the Registrar shall refuse to register any change in the officers or shareholders of the company in question;
-The Registrar shall 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, including but not limited to access by an application programming interface;
-The Registrar shall deal with any aspect of the online formation of companies, online registration of branches and online filing of documents and information;
-If the Registrar so deems fit, and after consultation with the Minister responsible for the registration of commercial partnerships, the Registrar may issue procedures and guidance to companies and/or their officers as may be required for the carrying into effect of the provisions of the Companies Act (and any subsidiary legislation made thereunder) and which shall be binding upon companies and/or their officers; and
-Where the Registrar, in his capacity as data controller, is obliged to processes personal data for the purposes of the Companies Act, s/he shall be bound by the principles relating to processing of personal data under Article 5 of Regulation (EU) 2016/679 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing the General Data Protection Regulation (Directive 95/46/EC), and shall accordingly apply such measures and safeguards as are appropriate and necessary to ensure the protection of the rights and freedoms of data subjects in processing any such personal data.
8.Amendments have furthermore been made to the Annual Return (statutory Seventh Schedule), in particular with reference to the paragraphs 1 and 2 thereof, which provisions, as extracted here-below, now necessitate the inclusion of additional information:
"1. Address (Address of the registered office and electronic mail address of the company)";
"2. Principal Area of Trading Activity and Summary of Share Capital".
Evidently, the amendments being brought about by virtue of Act LX of 2021 impose increased obligations on Directors and CSPs, as well as on the Registrar, and we are yet to see whether any sort of transitory period will be granted in order for companies to be able to come into line with same.
©Fenech & Fenech Advocates 2021
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