Amendments to the Companies Act (Act LX of 2021)
Author: Dr Lina Klesper - Legal Assistant at PKF Malta
Some of the Amendments to the Companies Act (Act LX of 2021) are now in force, primarily the provisions related to the use of digital tools and processes as well as the appointment and the holding of the office of directors. More specifically, the following have to be highlighted as they are salient features amended by the Act:
Information required to be included in the Memorandum of Association (Article 69)
- With this amendment the requirement to indicate the electronic email address of the company used for all official correspondence by the Registrar alongside the physical address is established - article 69(1)(d).
- Another introduction is that there is now the option that the memorandum of association includes a service address for directors, the company secretary and the shareholders rather than their residential address. The service address will also be the one published in the online records of the Malta Business Registry and available to the public.
The requirement to maintain a new register of officers and shareholders
- Companies are now required to create and maintain on a regular basis a separate Register of Officers and Shareholders, that is required to include up to date information about the residential address and e-mail address of officers and shareholders of the Company. This register and any update of it needs to be submitted to the Registry of Companies but will not be accessible to the public.
Requirements for appointment and qualification of directors (Article 139)
- This amendment establishes the requirement that an applying director must sign the memorandum of the company or otherwise submits a declaration in writing to show explicit consent to be appointed director of such company – article 139(1).
- It is also a requirement to declare to the Registrar whether the person being appointed director is aware of circumstances that could lead to disqualification from holding the office. Such circumstances need to take into consideration company law provisions in Malta, particularly the disqualification provisions as contained in the Act as well as any other disqualification arising from other Member States – article 139(5).
Statutory company directorship reporting requirements (Form K & Form K(1))
- In order to facilitate the foregoing requirements, the Registrar has published two statutory forms accepted exclusively as from 1st February 2022. The improved Form K is now divided into two sections (A and B), whereby Section B provides for newly appointed directors following a change in the company’s directorship, to indicate their consent and confirm their declaration as required in article 139.
- For electronic filing, Section B of the amended Form K is required to be submitted separately and this will be uploaded under Private Documents – ‘Declaration of Director/s in terms of Law’ as a scanned copy together with Section A. The latter (Section A) is generated through the online system. Every scanned copy of Section B will need to be signed in wet ink or using a qualified digital signature by the respective director/s.
- A new Form K(1) is being introduced in order to facilitate the same reporting requirements under article 139 by those proposed directors upon the formation of companies.
- This Form K(1) would then need to be uploaded under Private Documents as a scanned copy when filing a company registration through the online system. Every scanned copy of Form K(1) will need to be signed in wet ink or using a qualified digital signature by the respective director/s.
- The relevant forms can be downloaded from https://mbr.mt/promo/official-registry-forms/
Disqualification of Directors (Articles 140 & 142)
- In the instance that a director is disqualified or as amended does not hold the necessary license to act as a company service provider (Article 142(1)(e)), and provided that no exceptions under the law applicable to such a case, the Registrar shall inform the company accordingly – article 140(7). The company is then to remove such a director and submit the necessary statutory form within 14 days from such a removal. If the company fails to proceed according to this provision, the Registrar may apply before the competent court asking for the removal of such an officer.
- The Registrar may also take into account any disqualifications that already bar the respective person from being appointed to or from holding the office of director in another Member State.
Additional Legislative Powers of the Registrar (Article 401)
- The duties of the Registrar are also being widened and include the responsibility to take any measures granted under the law to ascertain the individuals’ identity and correctness of information; to co-operate with competent authorities and provide free access to the website maintained by the Registrar, and to deal with any aspect of digitalization of processes in company law procedures and consult with the Minister responsible for commercial partnerships in issuing guidance notes to the public.
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Author: Dr Lina Klesper - Legal Assistant at PKF Malta
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