Amendments to the Companies Act by virtue of Act LX of 2021

2022-02-08T11:58:50+01:00February 8th, 2022|News and Events|

Through the passing of Act LX of 2021, numerous amendments to the Companies Act of Malta have taken place principally affecting the contents of the Memorandum of association and the appointment and disqualification of directors.

The Formalities of the Memorandum of Association

Via the amendments to article 69 of the Companies Act, some of the formalities required in the memorandum of association of a company have changed.

  • Firstly, in addition to the address of the Company’s registered office, one must now also include the official e-mail address that the company intends to use for its official correspondence.
  • Secondly, with regards to the addresses of the Company’s shareholders, directors and company secretary, it is now possible to submit the service address of the aforementioned persons as opposed to their residential address. This amendment brings Maltese legislation more akin to English legislation on the matter.

However, in consequence to these amendments, article 123A has been introduced to the Companies Act of Malta, which states that a company is obliged to keep a register containing all of the names and residential addresses of its officers and shareholders.

The Appointment of Directors

Additionally, significant amendments have also been made regarding the formalities to be followed when appointing a director. Whereas previously this only applied to public companies, in order to become a director of any company, the prospective director must either sign the memorandum signifying his consent or submit a consent form to the Registrar of companies to that affect.

  • Form K is to be submitted if one is to become a director of an existing company.
  • Form K(1) is to be submitted by those directors appointed upon the formation of a company.

The Removal and Disqualification of Directors

Amendments to articles 140 and 142 of the Comapnies Act have also increased the Registrar’s powers with regards to the removal and disqualification of directors. Namely, where the Registrar becomes aware that a director of a company is disqualified to hold such office or lacks the necessary licence as envisaged by the Company Service Providers Act, the Registrar shall order the company to remove such director and inform the former within 14 days of the removal of the latter via the applicable statutory form.

If the company fails to comply, the director is empowered to file an action before the court which may order the removal of said director, all at the expense of the company.

Furthermore, if the Registrar is aware that a prospective director is disqualified from acting as such in another Member State or that there exists relevant information which would lead to his disqualification in said Member State, the Registrar may refuse to allow said person to act as a director of a company in Malta for the period that such person would be disqualified to act as a director in another Member State.

The article is intended to serve as a general guide on the subject matter. For further information and guidance on the subject matter we recommend seeking professional assistance.

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