COMP ANIES              [CAP. 386.       1
CHAPTER 386
COMPANIES ACT
To regulate, in place of the Commercial Partnerships Ordinance, limited liability
companies and other commercial partnerships.
1st January, 1996
ACT XXV of 1995  as amended by Acts XXIV of 1995 , IX, XXX  of 1997, XVII  of 1998,
XXII of 2000 , XVII of 2002 , IV, IX of 2003, II, XIII  of 2004; Legal Notices 390, 391 of
2005, 181, 186 of 2006; Acts V, XII of 2006, XV of 2007 ; 425 of 2007 ; Acts IX of 2008 ,
III of 2009  and XIX of 2010 ; Legal Notice 561 of 2010 ; Acts X and XVI of 2011; Legal
Notices 171, 337, 338 of 2012; Acts III, XX of 2013, XXII of 2014 ; Legal Notice 478 of
2014 ; Acts XXXI , XXXIII  of 2015, XIX, XXXVI , LIV of 2016, Act XI XXXI of 2017  and
XXXVI of 2018 and XXVI of 2019  and V and XXXI and XLVII of 2020 .
ARRANGEMENT OF ACT
Articles
 Short title 1
PART I  Preliminary Provisions 2-3PART II  General Provisions 4-6PART III  Partnership En Nom Collectif  7-50
PART IV  Partnership En Commandite 51-66A
PART V  Limited Liability Company  67-326
Title I  Formation and Functioning of Companies  67-213
Chapter I  Formation of a company and matters incidental theret o 67-82
Chapter II  Changes to a company’s share capital 83-88Chapter III  Capital issues by public companies 89-96Chapter IV  Allotment of shares and debentures of companies  97- 103
Chapter V  Maintenance of share capital and protection of class rights 104-116
Chapter VI  Miscellaneous provisions about shares and debentures 117-127
Chapter VII  Meetings and resolutions 128-135Chapter VIII  Management and administration 136-150Chapter IX  Auditors 151-162Chapter X  Accounts, audit and annual return 163-191Chapter XI  Distribution of profits and assets 192-208Chapter XII  Private company 209-213
Title II  Dissolution and Consequential Winding up of Companies 214-326
Sub-title I  Winding up by the court 218-264
Chapter I  General provisions 218-224Chapter II  Official receiver 225-227Chapter III  Liquidators in a winding up by the court 228-244Chapter IV  Liquidation committees in a winding up by the court 245-247
Chapter V  General powers of the court in a winding up by the co urt 248-264
Sub-title II  V oluntary winding up 265-294
Chapter I  General provisions 265-268Chapter II  Provisions applicable to a member’s voluntary windin g up 269-276
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Chapter III  Provisions applicable to a creditor’s voluntary win ding up 277-285
Chapter IV  Provisions applicable to every voluntary winding up 286-294
Sub-title III  Provisions applicable to every mode of winding up 295-326
Chapter I  Effect of a ppointment of liquidator and convening of
meetings 295-300
Chapter II  Proof and ranking of claims 301-302Chapter III  Effects of winding up on antecedent transactions 30 3-304
Chapter IV  Qualification of liquidators and prohib ition of certain
transfers by liquidators 305-306
Chapter V  Offences antecedent to dissolution or in course of wi nding
up 307-321
Chapter VI  Supplementary Provisions 322-326
PART VI  Company Reconstructions 327-329BPART VII  Conversion Of Commercial Partnerships 330-335PART VIII  Amalgamation Of Commercial Partnerships 336-359
Title I  Amalgamation Of Partnerships En Nom Collectif And En
Commandite 336-342
Title II  Amalgamation Of Companies 343-359
Chapter I  Merger by acquisition 344-356Chapter II  Merger by formation of a new company 357Chapter III  Ac quisition of one company by another which holds
ninety per cent or more of its shares 358-359
PART IX  Division of Companies 360-375
Chapter I  Division by acquisition 361-373Chapter II  Division by the formation of new companies 374Chapter III  Division by a combination of a division by acquisit ion
with a division by the formation of one or more newcompanies 374A
Chapter IV  Division under the supervision of the court 375
PART X  Association En Participation 376-383
PART XI  Bodies Corporate Constituted Outside Malta 384-399A
Chapter I  Provisions as to establishment of place of business i n
Malta 384-389
Chapter II  Issues by c ompanies constituted or incorporated or to be
constituted or incorporated outside Malta in a non-Member State or non-EEA State 390-398
Chapter III  Provisions as to the winding up of the affairs in M alta of
an oversea company 399-399A
PART XII  General 400-427PART XIII  Transitional and Final Provisions 428-431
SCHEDULES 
First Schedule Model regulations for a limited liability compan y
Second Schedule Matters to be specified in a prospectus and rep orts to be set out
thereinArticles
                    COMP ANIES              [CAP. 386.       3
Third Schedule Additional Provisions Applicable to the Annual Financial Accoun ts of
Large Undertakings, Medium-Sized Undertakings and Certain OtherUndertakings, where applicable and Additional Provisions Applic able to
Consolidated Accounts
Fourth Schedule Report on Payments to governments
Fifth Schedule Individual accounts and directors’ report of an investment company
with variable share capital
Sixth Schedule Contents of directors’ report Seventh Schedule Contents and form of annual returnEighth Schedule Conversion rules applicable on a change in the currency in which the
share capital of a company is expressed and the correspondingreporting currency
Ninth Schedule Explanation of expressions used in sub-article ( 2) of article 2 and
provisions supplementary thereto
Tenth Schedule Partnerships en commandite  or limited partnerships
Eleventh Schedule Penalties
Twelfth Schedule Table of Concordance
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Short title. 1. The short title of this Act is the Companies Act.
PART I - PRELIMINARY PROVISIONS
Interpretation.
Amended by:
XXIV . 1995.362;IV . 2003.26;L.N. 391 of 2005;XV . 2007.2;L.N. 425 of 2007;IX. 2008.4;X. 2011.68;L.N. 338 of 2012;XX. 2013.72;XXII. 2014.15;XXXI. 2015.3;XIX. 2016.16;XI. 2017.2;XXXI. 2017.74;V .2020.19.2.(1) In this Act, unless the context otherwise requires, the
following expressions have the meaning hereby assigned to them - 
S.L. 595.27."Agency" means the agency established by the Malta Business
Registry (Establishment as an Agency) Order ;
"annual accounts" means the individual accounts required by
article 167 and, where applicable, also the consolidated accoun ts
required by article 170;
"appointed day" means the date appointed by the Minister for th e
coming into force of this Act;
"approval" in relation to a prospectus means the positive act a t
the outcome of the scrutiny of the completeness of the prospect us
by the Registrar or the regulatory authority of the Member Stat e or
EEA State, as the case may be, including the consistency of theinformation given and its comprehensibility, within the meaning  of
the Prospectus Directive ;
"associated undertaking" means an under-taking in which
another undertaking has a participating interest, and over whos e
operating and financial policies that other undertaking exercis es
significant influence. An undertaking is presumed to exercise asignificant influence over another undertaking where it has 20%  or
more of the shareholders’ or members’ voting rights in that oth er
undertaking;
Cap. 281."auditor" shall have the meaning assigned to it in the
Accountancy Profession Act or regulations issued in terms thereof;
"body corporate" means any entity having a legal personality
distinct from that of its members, and includes a foreigncorporation;
"central securities depository" means a legal person, that
operates a securities settlement system and is authorised to pr ovide
at least one other of the following services:
(i) initial recording of securities in a book-entry system;
(ii) providing and maintaining securities accounts at the
top tier level;
"certificate of registration" when used in relation to a compan y
                    COMP ANIES              [CAP. 386.       5
means a certificate of registration issued under this Act or un der the
Ordinance and the words "registration", "registered" and theirderivatives shall be construed accordingly;
"commercial partnership" means a company or other commercial
partnership formed and registered under this Act or formed andregistered under the Ordinance where applicable;
"the Community" means the European Community established
by the Treaty of Rome in 1957 and amended institutionally andotherwise in 1986 by the Single European Act, in 1993 by the
Treaty on European Union, in 1997 by the Treaty of Amsterdam
and in 2001 by the Treaty of Nice, and as amended by accessionagreements and as may be further amended from time to time;
"company" means a company formed and registered under Part V
of this Act or the Ordinance;
""company secretary" means a person who holds the office of a
company secretary in terms of article 138;
"consolidated accounts" means the accounts required by article
170;
"contributory" shall, unless otherwise stated, have the meaning
assigned to it by articles 215 to 217; 
"court" means the Civil Court (Commercial Section);
"debenture" includes debenture stock, bonds and any other debt
securities of a company;
"dematerialised form" in relation to securities issued by a com pany
means the form where such securities exist only as book-entry r ecords;
"director" includes any person occupying the position of direct or
of a company by whatever name he may be called carrying outsubstantially the same functions in relation to the direction o f the
company as those carried out by a director;
"directors’ report" in relation to a company, means the directo rs’
report required by article 177;
"EEA State" means a State which is a contracting party to the
agreement on the European Economic Area signed at Oporto on the2nd May, 1992 as amended by the Protocol signed at Brussels onthe 17th March, 1993 and as amended by any subsequent acts; 
"equity securities" means shares and other securities which are
equivalent to shares in companies or which are convertible to s uch
shares, or securities which give such right of conversion, prov ided
such securities of the latter type are issued by the issuer of the
underlying shares or by an entity belonging to the group of the  said
issuer;
"euro" refers to the currency unit of the participating states in the
European Monetary Union;
"exempt company" means a company satisfying the conditions
laid down in sub-article (2 ) of article 211; 
"expert", except where otherwise specifically defined in this A ct,
 6        CAP. 386. ]                         COMP ANIES
means an auditor whether or not assisted by a specialist valuer ;
"extraordinary resolution" has the meaning given to it by artic le
135;
"group company", in relation to any company, means any body
corporate which is that company’s subsidiary or parent company,  or
a subsidiary of that company’s parent company, and the term"group" shall be construed accordingly as well as meaning a par ent
undertaking and all its subsidiary undertakings;
"home Member State" in relation to a prospectus means:
(i) for all Community issuers of securities which are not
mentioned in paragraph (ii) hereof, the Member Statewhere the issuer has its registered office;
(ii) for any issues of non-equity securities whose
denomination per unit amounts to at least one thousandeuro (1,000), and for any issues of non-equity
securities giving the right to acquire any transferablesecurities or to receive a cash amount, as aconsequence of their being converted or the rightsconferred by them being exercised, provided that theissuer of the non-equity securities is not the issuer ofthe underlying securities or an entity belonging to thegroup of the latter issuer, the Member State where theissuer has its registered office, or where the securitieswere offered to the public, at the choice of the issueror the offeror, as the case may be. The same regimeshall be applicable to non-equity securities in acurrency other than the euro, provided that the value of
such minimum denomination is nearly equivalent to onethousand euro (1,000);
(iii) for all issuers of securities incorporated in a third
country, which are not mentioned in paragraph (ii)hereof, the Member State where:
(a) the securities are intended to be offered to the
public for the first time after the date of entryinto force of this provision; or
(b) where the first application for admission to
trading on a regulated market is made, at thechoice of the issuer, the offerer or the personasking for admission, as the case may be, subjectto a subsequent election by issuers incorporatedin a third country in the followingcircumstances:
i. where the home Member State was not
determined by their choice; or
ii. in accordance with point (1)(i)(iii) of Article
2 of 
Directive 2004/109/EC  of the European
Parliament and of the Council of 15December 2004 on the harmonisation oftransparency requirements in relation toinformation about issuers whose securities
                    COMP ANIES              [CAP. 386.       7
are admitted to trading on a regulated
market;
"host Member State" in relation to a prospectus means the State
where an offer to the public is made, when different from the h ome
Member State;
"immobilisation" means the act of concentrating location of
physical certificates relating to securities issued by a compan y in a
central securities depository in a way which enables subsequenttransfers to be made by book-entry;
"individual accounts" means the accounts required by article
167;
"investment company with fixed share capital" means a public
company falling within the terms of article 194;
"investment company with variable share capital" means a
company falling within the terms of article 84;
"issuer" means an entity having a legal personality distinct fr om
that of its members which issues or proposes to issue securitie s;
Cap. 345."Maltese regulated market" means a regulated market duly
authorised by the competent authority in accordance with articl e 4
of the Financial Markets Act;
"member", except where otherwise specifically defined, means a
shareholder of a company and a partner in any other commercialpartnership;
"Member State" means a member state of the European
Community;
"Minister" means, unless otherwise stated, the Minister
responsible for the registration of commercial partnerships;
"money market instruments" means those classes of instruments
which are normally dealt in on the money market, such as treasu ry
bills, certificates of deposit and commercial papers and exclud ing
instruments of payment;
"name" in relation to an individual means that individual’s fir st
name or names and surname;
"notice" shall mean a notice in writing of any kind;"offering programme" means a plan which would permit the
issuance of non-equity securities, including warrants in any fo rm,
having a similar type and, or class, in a continuous or repeate d
manner during a specified issuing period;
"officer" in relation to a company, includes a director, manage r
or company secretary, but does not include an auditor;
Cap. 168. "the Ordinance" means the Commercial Partnerships Ordinance*;
"ordinary resolution" has the meaning given to it by article 13 5;
"oversea company" means a body corporate constituted or
incorporated outside Malta;
*Repealed by this Act.
 8        CAP. 386. ]                         COMP ANIES
"participating interest" means rights in the capital of other
undertakings, whether or not represented by certificates, which , by
creating a durable link with those undertakings, are intended t o
contribute to the activities of the undertaking which holds tho se
rights. The holding of part of t he capital of another undertaki ng is
presumed to constitute a participating interest where it exceed s
twenty per cent of the said capital. An interest in shares incl udes an
interest which is convertible into an interest in shares and an  option
to acquire an interest in shares. Interests in shares held bysubsidiary undertakings or held by third parties on behalf of t he
company or its subsidiary undertakings shall be deemed to be he ld
by the company;
"person making an offer", or "offeror", means a legal entity or
individual which offers securities to the public;
"prescribed" means prescribed by regulations made or deemed to
have been made under this Act, and where no regulation is in fo rce
in respect of a matter which may or is to be prescribed, meansdetermined, approved or allowed by the Minister;
"principal office" means, in relation to an undertaking not hav ing
a registered office, the office which, for the purposes of thatundertaking serves the same or a similar purpose as the registe red
office of a commercial partnership under this Act;
"private company" means a private company as defined in article
209;
"prospectus" means any prospectus, notice, circular,
advertisement or other invitation, offering to the public forsubscription any shares or debentures of a company or othercommercial partnership;
"the Prospectus Directive" means 
Directive 2003/71/EC of the
European Parliament and of the Council of 4 November, 2003 onthe prospectus to be published when securities are offered to t he
public or admitted to trading and amending 
Directive 2001/34/EC,
as may be amended from time to time and includes anyimplementing measures that have been issued or may be issuedthereunder;
"public company" means a company which is not a private
company;
Cap. 281."public-interest entities" means under-takings or entities as
defined in article 2(1) of the Accountancy Profession Act;
"recognised jurisdiction" means:
(a) a Member State;
(b) an EEA State;(c) any country that is a member of the Organisation for
Economic Co-operation and Development (OECD)established in 1961;
(d) any country that is a signatory of the IOSCO
Multilateral Memorandum of Understanding; or
                    COMP ANIES              [CAP. 386.       9
Cap. 345.(e) any other jurisdiction where the competent authority,
as referred to in the Financial Markets Act, has a
memorandum of understanding covering securities;
"Registrar" means the person appointed by the Minister pursuant
to article 400;
Cap. 345."regulated market" means a regulated market as defined in the
Financial Markets Act and includes a Maltese regulated market;
"regulatory authority" means a body or bodies designated by a
Member State other than Malta or an EEA State to carry out duti es
provided for in the Prospectus Directive ;
"resident", for the purposes of this Act, means -
(a) any natural person regardless of nationality who is
ordinarily resident in Malta;
(b) any body corporate established under the law of Malta;
"security" includes a share, debenture or any other similar
instrument issued by a company or other commercial partnership:
Provided that for the purpose of sub-article (3) of this
article and of Chapter III of Part V and Part A of the SecondSchedule of this Act, the definition of "security" does not inc lude
money market instruments having a maturity of less than twelvemonths;
"securities issued in a continuous or repeated manner" means
issues on an ‘as required’ basis (on tap) or at least two separ ate
issues of securities of a similar type and, or class over a per iod of
twelve months;
"share" includes stock except where a distinction between stock
and shares is expressed or implied;
"shareholder" means a person entered in the register of members
of a company pursuant to article 123;
"small and medium-sized enterprises" or "SMEs" means
companies which, according to their last annual or consolidatedaccounts, meet at least two of the following three criteria: anaverage number of employees, during the financial year, of lessthan 250, a total balance sheet not exceeding forty-three milli on
euro (43,000,000) and an annual net turnover not exceeding fift y
million euro (50,000,000);
"system of interconnection of registers" means the system of
interconnection of central, commercial and companies registerscomposed of the registers of Member States and EEA States, theEuropean central platform, and the European e-Justice portalserving as the European electronic access point, in terms of
Directive 2009/101/EC , as amended by Directive 2012/17/EU ;
"third country" means a country that is not a Member State or a n
EEA State;
"true and fair view" refers - 
(a) in the case of individual accounts, to the requirements
of article 167, and
 10        CAP. 386. ]                         COMP ANIES
(b) in the case of consolidated accounts, to the
requirements of article 171;
"undertaking" means a body corporate or unincorporate which
carries on a trade or business.
(2) ( a) For the purposes of this Act "parent company" is a
company which - 
(i) has a majority of the members’ voting rights in
another undertaking (a subsidiary undertaking);or
(ii) has the right to appoint or remove a majority of
the members of the board of directors or personsentrusted with the administration of anotherundertaking (a subsidiary undertaking) and is atthe same time a member of that undertaking; or
(iii) has the right to exercise a dominant influence
over an undertaking (a subsidiary undertaking)pursuant to a contract entered into with thatundertaking or to a provision in thatundertaking’s memorandum or articles ofassociation; or
(iv) is a member of an undertaking and controls
alone, pursuant to an agreement with othermembers of that undertaking (a subsidiaryundertaking), a majority of members’ votingrights in that undertaking; or 
(v) holds a participating interest in another
undertaking and has the power to exercise, oractually exercises a dominant influence over thatundertaking (a subsidiary undertaking) or itmanages the subsidiary undertaking on a unifiedbasis together with it;
and "parent undertaking" shall be construed
accordingly and shall include an undertaking whichcontrols one or more subsidiary undertakings.
(b) For the purposes of the definition in paragraph ( a), the
provisions of the Ninth Schedule shall apply. 
(c) The term "subsidiary undertaking" shall be construed in
accordance with paragraph ( a) and shall include an
undertaking controlled by a parent undertaking includingany subsidiary undertaking of an ultimate parentundertaking.
(d) References to shares of undertakings in this Act shall
include references to beneficial interests inundertakings where the capital of such undertakings isnot divided into shares; and references to "relevantshares", "the issue of equity shares", "the issued sharecapital" and "the nominal value of the equity shares"shall be construed accordingly.
(e) Other terms appropriate to companies shall be
construed, in relation to an undertaking which is not a
                    COMP ANIES              [CAP. 386.       11
company, as references to the corresponding persons,
officers, documents or organs, as the case may be,appropriate to undertakings of that description.
(3) ( a) For the purposes of this Act, "offer of securities to the
public" means a communication to persons in any formand by any means, presenting sufficient information onthe terms of the offer and the securities to be offered,so as to enable an investor to decide to purchase orsubscribe to these securities. This definition shall alsobe applicable to the placing of securities throughfinancial intermediaries.
(b) The following shall not constitute of fers of securities
made to the public:
(i) an offer of securities made only to qualified
investors; or
(ii) an offer made to less than one hundred and fifty
persons per Member State or EEA State, notincluding qualified investors; or
(iii) an offer where the minimum consideration
which may be paid by any person for securitiesacquired pursuant to the offer is at least onehundred thousand euro (100,000.00), for eachseparate offer; or
(iv) an offer of securities  where the nominal value of
each security amounts to at least one hundred
thousand euro (100,000.00), or the totalconsideration of the offer in the European Unionand the EEA shall not exceed one hundred
thousand euro (100,000.00), which limit shall becalculated over a period of twelve months; or
(v) an offer where the total consideration of the
securities for the offer in the European Union andthe EEA does not exceed five million (5,000,000)euro, which limit shall be calculated over a periodof twelve months; or
(vi) an offer in respect of non-equity securities
issued in a continuous or repeated manner bycredit institutions where the total consideration of
the offer in the European Union and the EEA, overa period of twelve months is less than seventy fivemillion euro (75,000,000), provided that these
securities:
(a) are not subordinated, convertible or
exchangeable; and 
(b) do not give a right to subscribe to or
acquire other types of securities and theyare not linked to a derivative instrument: 
Provided that any subsequent resale of securities
which were previously the subject of one or more ofthe types of offer mentioned in sub-paragraphs (i) to
 12        CAP. 386. ]                         COMP ANIES
(iv) shall be regarded as a separate offer and the
definition set out in paragraph ( a) regarding an "offer
of securities to the public" shall apply for the purposeof deciding whether that resale is an offer of securitiesto the public. The placement of shares throughfinancial intermediaries shall be subject to publicationof a prospectus if none of the conditions mentioned insub-paragraphs (i) to (iv) above are met for the finalplacement:
Provided further that in the case of any such subsequent
resale of securities or final placement of securitiesthrough financial intermediaries, it is not necessary todraw up another prospectus as long as a valid prospectusis available in accordance with paragraph 21 of Part A ofthe Second Schedule to this Act and the issuer or theperson responsible for drawing up such a prospectusconsents to its use by means of a written agreement:
Provided further that in respect of offers mentioned in
sub-paragraphs (v) and (vi), an offeror may draw up aprospectus in accordance with the provisions of Part Aof the Second Schedule;
(c) Where the offer is made by a commercial partnership,
not being a company and whether formed or registeredunder this Act or any other Act, the provisions of thisarticle shall apply to such offer mutatis mutandis .
(d) The Minister may by Order published in the Gazette
revise or amend any of the figures or amounts referredto in this article.
(e) For the purposes of this Act "qualified investors" means
persons or entities that are described in points (1) to (4)of Section I of Annex II to 
Directive 2004/39/EC  of the
European Parliament and of the Council of 21 April 2004on markets in financial instruments, and persons orentities who are, on request, treated as professionalclients in accordance with Annex II to 
Directive 2004/
39/EC  or recognised as eligible counterparties in
accordance with Annex II to Directive 2004/39/EC
unless they have requested that they be treated as non-professional clients. Investment firms and creditinstitutions shall communicate their classification onrequest to the issuer without prejudice to the relevantlegislation on data protection. Investment firmsauthorised to continue considering existing professionalclients as such in accordance with article 71(6) of
Directive 2004/39/EC  shall be authorised to treat those
clients as qualified investors under this provision.
For the purposes of sub-paragraph (iv), the criteria are
as follows:
(i) the investor has carried out financial
transactions of a significant size on securitiesmarkets at an average frequency of, at least, ten
                    COMP ANIES              [CAP. 386.       13
per quarter over the previous four quarters;
(ii) the size of the investor’s securities portfolio
exceeds five hundred thousand euro(500,000.00);
(iii) the investor works or has worked for at least one
year in the financial sector in a professionalposition which requires knowledge of securitiesinvestment.
For the purposes of sub-paragraphs (iv) and (v), the
Registrar shall keep a register of natural persons andsmall and medium-sized enterprises considered asqualified investors. The register shall be available toall issuers. Each natural person or small and medium-sized enterprises wishing to be considered as aqualified investor shall request to be included in suchregister and each registered investor may decide to optout at any moment.
Cap. 281.(4) For the purposes of this Act, "generally accepted
accounting principles and practice" shall have the meaningassigned to it in the 
Accountancy Profession Act or regulations
issued in terms thereof.
(5) For the purposes of this Act, where a document required to
be delivered to the Registrar for registration is required to s tate the
name and residence or address of a person, it shall be deemed t o
require further the official identification, by number or other wise
of such person, as may be applicable.
(6) For the purposes of this Act, where any document, which is
required to be delivered or given to or served on the Registrar , is to
be signed by an expert and such expert is a company, partnershi p or
other body corporate, such document shall carry the signature o f an
individual who is a director, partner or equivalent officer, as  the
case may be, duly authorised to sign on its behalf.
(7) In this Act and in any regulations made thereunder, if there
is any conflict between the English and Maltese texts, the Engl ish
text shall prevail.
References in other 
Acts.
Amended by:
IV . 2003.27.3.(1) References in any other law to the Ordinance shall be
construed as a reference to this Act and references in any othe r law
to a provision of the Ordinance shall be construed, insofar asapplicable, as a reference to the corresponding provision of th is
Act; and references in any other law to a partnership formed an d
registered under the Ordinance shall be construed as a referenc e, or
as including a reference, to a commercial partnership formed an d
registered under this Act.
(2) The table of concordance set out in the Twelfth Schedule to
this Act may be used, insofar as applicable, in determining thecorresponding provisions in accordance with sub-article (1).
 14        CAP. 386. ]                         COMP ANIES
Transposition and 
implementation of EU instruments.
Added by:
XX. 2013.73.
Amended by:
XXII. 2014.16;XXXI. 2015.4;XIX. 2016.17;XXXVI. 2016.18;LIV . 2016.3.3A. This Act, in part, seeks to transpose, implement and give
effect to the provisions and requirements of the following Euro pean
Union Directives and Regulations, as may be amended from time t o
time, including any implementing measures that have been or maybe issued thereunder:
(a) Sixth 
Council Directive 82/891/EEC  of 17 December
1982 based on Article 54(3)(g) of the Treaty,concerning the division of public limited liabilitycompanies;
(b) Eleventh 
Council Directive 89/666/EEC  of 21
December 1989 concerning disclosure requirements inrespect of branches opened in a Member State bycertain types of company governed by the law ofanother State;
(c)
Directive 2003/58/EC  of 15 July 2003 amending
Council Directive 68/151/EEC, as regards disclosurerequirements in respect of certain types of companies;
(d)
Directive 2003/71/EC  of the European Parliament and
of the Council of 4 November 2003 on the prospectusto be published when securities are offered to thepublic or admitted to trading and amending Directive2001/34/EC;
(e)
Directive 2004/109/EC  of the European Parliament
and of the Council of 15 December 2004 on theharmonisation of transparency requirements in relationto information about issuers whose securities areadmitted to trading on a regulated market andamending Directive 2001/34/EC;
(f)
Directive 2005/56/EC  of the European Parliament and
of the Council of 26 October 2005 on cross-bordermergers of limited liability companies;
(g)
Directive 2006/43/EC of the European Parliament and
of the Council of 17 May 2006 on statutory audits ofannual accounts and consolidated accounts, amendingCouncil Directives 78/660/EEC and 83/349/EEC andrepealing Council Directive 84/253/EEC, whichDirective was itself amended by Directive 2014/56/EUof the European Parliament and of the Council of 16
April 2014;
(h)
Directive 2006/68/EC  of the European Parliament and
of the Council of 6 September 2006 amending Council
Directive 77/91/EEC  as regards the formation of
public limited liability companies and the maintenanceand alteration of their capital;
(i)
Directive 2007/63/EC  of the European Parliament and
of the Council of 13 November 2007 amendingCouncil Directives 78/855/EEC and 82/891/EEC asregards the requirement of an independent expert’sreport on the occasion of merger or division of publiclimited liability companies;
(j)
Directive 2009/101/EC  of the European Parliament
                    COMP ANIES              [CAP. 386.       15
and of the Council of 16 September 2009 on
coordination of safeguards which, for the protection ofthe interests of members and third parties, are requiredby Member States of companies within the meaning ofthe second paragraph of Article 48 of the Treaty, witha view to making such safeguards equivalent;
(k)
Directive 2009/102/EC of the European Parliament
and of the Council of 16 September 2009 in the area ofcompany law on single-member private limitedliability companies;
(l)
Directive 2009/109/EC  of the European Parliament
and of the Council of 16 September 2009 amendingCouncil Directives 77/91/EEC, 78/855/EEC and 82/891/EEC, and Directives 2005/56/EC as regardsreporting and documentation requirements in the caseof mergers and divisions;
(m)
Directive 2011/35/EU  of the European Parliament and
of the Council of 5 April 2011 concerning mergers ofpublic limited liability companies;
(n)
Directive 2012/17/EU  of the European Parliament and
of the Council of 13 June 2012 amending Council
Directive 89/666/EEC  and Directives 2005/56/EC  and
2009/101/EC  of the European Parliament and of the
Council as regards the interconnection of central,commercial and companies registers;
(o)
Directive 2012/30/EU  of the European Parliament and
of the Council of 25 October 2012 on coordination ofsafeguards which, for the protection of the interests ofmembers and others, are required by Member States ofcompanies within the meaning of the second paragraphof Article 54 of the Treaty on the Functioning of theEuropean Union, in respect of the formation of publiclimited liability companies and the maintenance andalteration of their capital, with a view to making suchsafeguards equivalent;
(p)
Directive 2013/34/EU  of the European Parliament and
of the Council of 26 June 2013 on the annual financialstatements, consolidated financial statements andrelated reports of certain types of undertakings,amending Directive 2006/43/EC of the EuropeanParliament and of the Council and repealing CouncilDirectives 78/660/EEC and 83/349/EEC hereinafter inthis Act referred to as the "Accounting Directive;
(q)
Directive 2013/50/EU  of the European Parliament and
of the Council of 22 October 2013 amending Directive
2004/109/EC  of the European Parliament and of the
Council on the harmonisation of transparencyrequirements in relation to information about issuerswhose securities are admitted to trading on a regulated
market, 
Directive 2003/71/EC  of the European
Parliament and of the Council on the prospectus to be
 16        CAP. 386. ]                         COMP ANIES
published when securities are offered to the public or
admitted to trading and Commission Directive 2007/14/EC laying down detailed rules for theimplementation of certain provisions of 
Directive
2004/109/EC ;
(r)Council Regulation (EEC) No 2137/85  of 25 July 1985
on the European Economic Interest Grouping (EEIG);
(s)Council Regulation (EC) No 2157/2001  of 8 October
2001 on the Statute for a European company (SE);
(t)Regulation (EU) No. 537/2014  of the European
Parliament and of the Council of 16 April 2014 onspecific requirements regarding statutory audit ofpublic-interest entities hereinafter referred to as "the
Audit Regulation;
(u)
Directive 2014/95/EU  of the European Parliament and
of the Council of 22 October 2014 as regardsdisclosure of non-financial and diversity informationby certain large undertakings and groups, amending
Directive 2013/34/EU  of the European Parliament and
of the Council of 26 June 2013 on the annual financialstatements, consolidated financial statements andrelated reports of certain types of undertakingshereinafter in this Act referred to as the "TransparencyDirective",
which shall be interpreted and applied accordingly.
PART II - GENERAL PROVISIONS
Formation of 
commercial partnerships and different kinds of commercial partnerships.
Amended by:
IV . 2003.28.4.(1) A commercial partnership may be of the following
kinds: 
(a) a partnership en nom collectif ; or 
(b) a partnership en commandite or limited partnership; or 
(c) a company.
(2) A commercial partnership other than a company may be
formed for the exercise of one or more acts of trade.
(3) A company may be formed for any lawful purpose and shall
have the status of -
(a) a public company; or 
(b) a private company.
(4) A commercial partnership has a legal personality distinct
from that of its member or members, and such legal personalityshall continue until the name of the commercial partnership isstruck off the register, whereupon the commercial partnership s hall
cease to exist.
Law governing 
commercial partnerships.5. A commercial partnership formed and registered under this
Act or under the Ordinance shall be governed by this Act
irrespective of the place where the management and control of t he
                    COMP ANIES              [CAP. 386.       17
commercial partnership is exercised.
Indication of 
particulars in business letters, order forms, websites etc.
Amended by:
IV . 2003.29;XV . 2007.3.6.(1) In all its business letters and order forms, whether they
are in paper form or in any other medium, as well as on its int ernet
website or websites, if any, a commercial partnership shall men tion
in legible characters its name, kind of commercial partnership,registered office and registration number.
(2) In all its business letters and order forms, whether they ar e
in paper form or in any other medium, as well as on its interne t
website or websites, if any, in respect of the branch or place of
business in Malta, a body corporate registered under Part XI of  this
Act shall mention in legible characters its name, the country o f its
constitution or incorporation, its registration number and regi stered
office in its country of constitution or incorporation, kind ofcommercial partnership, the address of the branch or place ofbusiness in Malta, its registration number under Part XI of thi s Act
and, where applicable, the fact that the oversea company is bei ng
wound up.
(3) In all its business letters and order forms, whether they ar e
in paper form or in any other medium, as well as on its interne t
website or websites, if any, a partnership en nom collectif shall also
state in legible characters the names of its partners in additi on to
the requirements of sub-article (1).
(4) In all its business letters and order forms, whether they ar e
in paper form or in any other medium, as well as on its interne t
website or websites, if any, a partnership en commandite  or limited
partnership shall also state in legible characters the names of  the
partners having unlimited liability in addition to the requirem ents
of sub-article (1).
(5) Every commercial partnership and every body corporate
registered under Part XI of this Act shall mention its name inlegible characters in all its notices and other official public ations,
bills of exchange, promissory notes, cheques and orders for mon ey
or goods purporting to be signed on its behalf and in all its b ills of
parcels, invoices, receipts and letters of credit.
(6) An officer signing a document on behalf of a commercial
partnership or on behalf of a body corporate registered under P art
XI of this Act shall state the capacity in which he is signing.
(7) Where a commercial partnership is being wound up, every
letter, invoice or other document issued by or on behalf of thecommercial partnership, being a document on or in which the nam e
of the commercial partnership appears, shall, in addition to th e
requirements of the preceding sub-articles of this article, con tain a
statement that the commercial partnership is being wound up and ,
in respect of a company it shall also contain the names of theliquidators.
(8) Where a reference is made to the capital of a company in
the documents or internet websites referred to in the preceding  sub-
articles, that reference shall include a reference to both the issued
and the paid up capital.
(9) If default is made in complying with the provisions of sub-
 18        CAP. 386. ]                         COMP ANIES
articles (1) to (6) and of sub-article (8) every officer of the
commercial partnership who is in default shall be liable to apenalty.
(10) If default is made in complying with the provisions of sub-
article (7) every liquidator or partner, as the case may be, wh o is in
default shall be liable to a penalty.
PART III - PARTNERSHIP EN NOM COLLECTIF
Definition.
Amended by:
IV . 2003.30;XXII. 2014.17.7. A partnership en nom collectif  (referred to as a
"partnership" in the following provisions of this Part) may beformed by two or more partners and operates under a partnershipname and has its obligations guaranteed by the unlimited and jo int
and several liability of all the partners:
Provided that no action shall lie against the individual
partners unless the property of the partnership has first beendiscussed:
Provided further that where, and for as long as, none of the
partners is either an individual or a body corporate which has its
obligations guaranteed by the unlimited and joint and severalliability of one or more of its members, the provisions of arti cle 7A
shall also apply to that partnership.
When none of the 
partners is an individual or a body corporate  which has its obligations guaranteed by the unlimited and joint  and several liability of one or more of its members.
Added by:
XXII. 2014.18.7A. (1) The provisions of this article shall apply to a
partnership where, and for as long as, none of the partners is either
an individual or a body corporate which has its obligationsguaranteed by the unlimited and joint and several liability of one or
more of its members.
(2) A partnership which, either on formation or at any time
thereafter, becomes subject to the provisions of this article s hall,
within fourteen days, deliver to the Registrar for registration  a
notice specifying that it is subject to this article and that i t shall
comply with the provisions laid down in this article.
(3) When a partnership ceases to be subject to the provisions of
this article, the partnership shall, within fourteen days of su ch
cessation, deliver to the Registrar for registration a noticespecifying that it is no longer subject to this article and tha t the
provisions of this article shall not apply to such partnership as from
the date that it has ceased to be so subject.
(4) Notwithstanding any other penalties imposed by this Act,
any partner who fails to comply with the provisions of sub-arti cles
(2) and (3) shall be liable to a penalty, and, for every day du ring
which the default continued, to a further penalty.
(5) The provisions of Chapters IX and X of Part V of this Act,
other than the provisions of article 184, shall mutatis mutandis
apply to a partnership subject to this article for as long as s uch
partnership continues to be so subject.
(6) Where a partnership subject to the provisions of this articl e
is dissolved, a liquidator shall be appointed and the provision s of
                    COMP ANIES              [CAP. 386.       19
articles 305 and 306 shall mutatis mutandis  apply. The provisions
of article 37(1) and article 48 shall not apply.
(7) ( a) As soon as the affairs of the partnership are fully
wound up, the liquidator shall make an account of thewinding up, showing how the winding up has beenconducted and how the property of the partnership hasbeen disposed of, and shall draw up a scheme ofdistribution and he shall cause the account to beaudited by one or more auditors appointed by adecision of the partners. The liquidator shall serve oneach of the partners a copy of the accounts and of thescheme of distribution, if any, together with theauditors’ report and any explanation thereof.
(b) The accounts and the scheme of distribution shall be
deemed to have been approved by all the partners if no
objection thereto is lodged by application by any of thepartners within three months of the service referred toin paragraph ( a).
(c) The provisions of article 153 shall apply to an auditor
appointed in terms of paragraph ( a). Such auditor shall
not be a person who has held the office of auditor ofthe partnership at any time during the last three yearsimmediately preceding the date of dissolution.
(8) The Minister may make regulations for the better carrying
out of any of the provisions of this article; and without preju dice to
the generality of the foregoing may, by such regulations, inparticular exempt or provide for the exemption of such partners hip
from any of the provisions of this Act or of any other law in f orce,
subject to such modifications, variations and conditions that m ay
be specified thereunder.
Agreement to pay 
share of profits.8. An agreement to pay a share of the profits of a partnership
to a person in total or partial remuneration for his services s hall
not, of itself, make him a partner.
Partnership name. 9.(1) Subject to the provisions of sub-articles (2) and (3), a
partnership may be designated by any name.
(2) A partnership shall not be registered by a name which -
(a) is the same as the name of another commercial
partnership or so nearly similar as in the opinion of theRegistrar it could create confusion; or
(b) is in the opinion of the Registrar offensive or
otherwise undesirable; or
(c) has been reserved for registration for another
commercial partnership by notice in writing to theRegistrar given not more than three months before thedate of the second request:
Provided that the Registrar shall notify any refusal under
this sub-article without delay to the person requesting theregistration.
 20        CAP. 386. ]                         COMP ANIES
(3) For the purposes of sub-article (2)( b), the Registrar shall
have regard to the names of the  partners, the business or propo sed
business of the partnership and to the protection of the names of
individuals who are not connected in any way with the partnersh ip.
Penalties. 10. Any person who knowingly makes use of a name falsely
implying the existence of a partnership shall be liable to a pe nalty.
Contributions 
deemed to be made in ownership.11. Unless specifically provided in the deed of partnership,
things contributed to the partnership shall be deemed to have b een
transferred in full ownership:
Provided that, where any of the partners has contributed his
own services only, the contributions made by the other partnersshall, unless specifically provided in the deed of partnership,  be
deemed to have been made in usufruct.
Contribution of a 
debt owing to a partner.12. Where a partner has contributed to the partnership a debt
owing to him, he shall not be discharged until the partnershipobtains payment of the amount for which the debt was contribute d
and, in case of non-payment at the due date, he shall be liable ,
jointly and severally with the debtor, for the said amount withinterest from the date the debt contributed fell due.
How a partnership 
is constituted.13. A partnership shall not be validly constituted unless a deed
of partnership is entered into and signed and a certificate ofregistration is issued under this Act in respect thereof.
Contents of deed of 
partnership.14. (1) The deed of partnership shall state: 
(a) the name and residence of each of the partners; 
(b) the partnership-name;
(c) the registered office in Malta of the partnership;
(d) the objects of the partnership, that is to say, whether
the objects are trade in general or a particular branchof trade, and in the latter case, the nature of the trade;
(e) the contribution of each of the partners, specifying the
value of the respective contribution of every partner;
(f) the period if any fixed for the duration of the
partnership. 
(2) The exclusion or omission of any matter from the objects
stated in the deed of partnership may not be set up against thi rd
parties.
Registration of 
deed of partnership.15. (1) The deed of partnership shall be delivered for
registration to the Registrar who, being satisfied that it comp lies
with the requirements of article 14 and of sub-article (2), sha ll
register it.
(2) Where the deed of partnership is a public deed or a private
writing enrolled in the records of a notary public, an authenti c copy
thereof shall be delivered in lieu of the original.
(3) The aforesaid delivery shall be made by any one of the
partners or his authorised agent.
                    COMP ANIES              [CAP. 386.       21
Duty of Registrar 
and effects of registration.
Amended by:
XIII. 2004.95.16. (1) On the registration of the deed of partnership the
Registrar shall certify under his hand that the partnership isregistered and the partnership shall come into existence and sh all
be authorised to commence business under the partnership name a s
from the date of the certificate:
Provided that, if registration is obtained before the date
fixed in the deed of partnership for the commencement of thepartnership, the certificate shall indicate such date, and thepartnership shall come into existence and shall be authorised t o
commence business as from such later date.
(2) A certificate of registration given in respect of a partners hip
is conclusive evidence that the requirements of this Act in res pect
of registration and of matters precedent and incidental to it h ave
been complied with and that the partnership is duly registered,under this Act.
(3) The registration of a partnership by the Registrar under thi s
article shall be without prejudice to any other licence or othe r
authorisation as may be required in respect of the activities t o be
carried on by the partnership under any other law.
Where certificate 
of registration is not issued.17. Unless and until a certificate of registration is issued under
this Act in respect of a partnership or until the date indicate d in a
certificate of registration as the date on which a partnership shall
come into existence -
(a) any two or more persons carrying on business under a
name falsely implying the existence of a partnershipshall have, as against one another and limitedly toproperty acquired from such business, such rights onlyas are by law conferred on joint owners;
(b) any obligation contracted in favour of third parties in
good faith under a name falsely implying the existenceof a partnership shall be jointly and severally bindingon those persons, who, if a certificate of registrationhad been issued, would have been partners carrying onbusiness under that name.
Person holding 
himself out to be a partner.18. (1) A person who holds himself out as being a partner
shall be held liable unlimitedly and jointly and severally with  the
partners for all the obligations contracted by the partnership.
(2) The inclusion in the partnership-name of the name of a
person who is not a partner shall be taken into account by the court
in determining whether such person is holding himself out as be ing
a partner.
Changes in deed of 
partnership.19. (1) Every change relating to the administration or the
representation of a partnership, the dissolution of a partnersh ip
before the period, if any, fixed for its duration, any extensio n of the
said period not expressly provided for in the deed of partnersh ip
and generally any alteration or addition to the deed of partner ship
shall be made in writing and duly signed by the partners author ised
to make that change and, subject to the provisions of article 2 1,
shall not take effect unless and until the relative instrument or,
 22        CAP. 386. ]                         COMP ANIES
where such instrument is a public deed or a private writing enr olled
in the records of a notary public, an authentic copy thereof isdelivered to the Registrar for registration and is registered b y him.
In the case of a change relating to the administration or therepresentation of a partnership, the relative instrument shall specify
the name and residence of the person or persons entrusted with the
said administration or representation.
(2) Where the extension of the period, if any, fixed for the
duration of a partnership is expressly provided for in the deed  of
partnership, the partner or partners having the administration or
representation of the partnership shall, notwithstanding thatprovision in the deed, deliver a notice of extension of the per iod of
duration to the Registrar for registration and such extension s hall
not take effect unless and until the said notice is delivered t o the
Registrar and is registered by him.
(3) Where a partner ceases to be a partner or where a person
whose name does not appear in the deed of partnership or in anyalteration or addition thereto becomes a partner of an alreadyexisting partnership, a notice to that effect, specifying the n ame and
residence of any new partner, shall, within one month, be deliv ered
to the Registrar for registration by the partner or partners ha ving
the administration or the representation of the partnership:
Provided that any assignment of interest in whole or in part
of any partner shall, unless otherwise provided in the deed ofpartnership, require the prior consent in writing of all the ot her
partners.
(4) If default is made in complying with the provisions of sub-
article (3), the partner or partners having the administration or
representation of the partnership shall be liable to a penalty,  and,
for every day during which the default continues, to a furtherpenalty.
Where alteration 
consists in change of partnership-name.20. Where the alteration to the deed of partnership consists in a
change of the partnership-name, the Registrar shall enter the n ew
name on the register in place of the former name and shall issu e a
certificate of registration altered to meet the circumstances o f the
case:
Provided that the provisions of article 9 shall apply to the
registration of such new name.
Reduction in 
contribution of a partner and dissolution of a partnership before period fixed for its duration.
Amended by:
IV . 2003.31;L.N. 181 of 2006;L.N. 186 of 2006.21. (1) Any reduction in the contribution of a partner, other
than a contribution consisting in personal services, any dissol ution
of the partnership on the grounds mentioned in article 35( b) or ( f),
any reduction of the term of duration, if any, of the partnersh ip or
any assignment by a partner of all his interest in the partners hip
shall not be operative until three months from the date ofpublication of the statement in accordance with article 401(1)( e)
relating to the instrument effecting such reduction, dissolutio n or
assignment.
(2) Any creditor of the partnership whose debt existed prior to
the publication referred to in sub-article (1) may object there to by
                    COMP ANIES              [CAP. 386.       23
sworn application, within the period of three months as aforesa id
and, if he shows good cause why it should not take effect, the court
shall either uphold the objection or allow the reduction of thecontribution or the dissolution of the partnership or a reducti on of
the term of duration, if any, or the assignment of the interest  of the
partner, as the case may be, on sufficient security being given  by
the partnership.
Right of creditors 
of a partner to oppose extension of duration of a partnership.
Amended by:
L.N. 181 of 2006;L.N. 186 of 2006.22. (1) Where the duration of a partnership is extended
beyond the period, if any, in the deed of partnership, the sepa rate
creditor of a partner may object to such extension by swornapplication filed within three months from the date of thepublication of the statement in accordance with article 401(1)( e)
relating to the instrument effecting such extension and, upon g ood
cause being shown, the court shall direct the partnership toliquidate such partner’s interest in the partnership within thr ee
months of the judgment.
(2) The provisions of sub-article (1) shall apply whether any
extension of the period fixed for the duration of the partnersh ip is
or is not expressly provided for in the deed of partnership.
(3) A separate creditor of a partner may only object in
pursuance of this article if his debt existed prior to the publ ication
of the statement referred to in sub-article (1).
Duties of Registrar 
of Courts.
Amended by:
XXIV . 1995.362;L.N. 181 of 2006;L.N. 186 of 2006.23. The Registrar of Courts shall, without delay, cause a copy
of any sworn application filed und er articles 21 and 22 and of any
judgment given thereon to be served on the Registrar forregistration.
How deed of 
partnership may be altered.24. Unless otherwise provided in the deed of partnership, any
alteration or addition thereto may only be made with the unanim ous
consent of the partners.
Administration and 
representation of a partnership and how partnership may be bound.25. (1) In so far as the deed of partnership does not otherwise
provide, the administration and representation of the partnersh ip
shall vest in each of the partners severally.
(2) A partnership may not be bound in favour of third parties
except by a partner acting under the partnership-name and havin g
the representation of the partnership either by virtue of the d eed of
partnership or by operation of law.
(3) Where any such partner has acted as aforesaid, the
partnership shall be bound even though it derives no benefit.
Keeping of 
accounting records.Cap. 13.26. (1) Notwithstanding the provisions of article 26 of the
Commercial Code, the accounting records of the partnership shall
be kept for a period of ten years:
Provided that where the accounting records are kept in a
bound or unified form, the ten years shall commence to run fromthe date of the last entry made therein.
(2) If default is made in complying with the requirements of
sub-article (1), every partner who is in default shall be liabl e to a
penalty.
 24        CAP. 386. ]                         COMP ANIES
New partners. 27. (1) Where a person becomes a partner of an already
existing partnership, he shall thereby become liable for all th e
obligations of the partnership, even if incurred before the dat e at
which he becomes a partner.
(2) Any agreement to the contrary shall be of no effect with
regard to third parties.
Distribution of 
profits.28. A partnership shall not distribute profits until it has made
good all losses. 
Rights of creditors 
of a partner.29. The separate creditors of a partner may enforce their rights,
during the continuance of the partnership, on the share of theprofits if due to their debtor and, on the dissolution of thepartnership, on such portion of the assets of the partnership a s is
due to their debtor on the partnership being wound up.
Partner may not 
compete with partnership.
Amended by:
XXXVI.2018.118.30. (1) A partner shall not, in competition with the partnership
and without the express consent of the other partners, carry onbusiness on his own account or on account of others or be a par tner
with unlimited liability in another partnership.
(2) If a partner acts in contravention of the provisions of sub-
article (1), the partnership may, at its option, either take ac tion for
damages and interest against the offending partner or demandpayment of any profit made by him in violation of the aforesaidprohibition.
Death of a partner. 31. (1) Saving any provision to the contrary in the deed of
partnership, in the event of death of one of the partners thesurviving partners shall liquidate the deceased partner’s inter est in
the partnership in favour of his heirs, unless the surviving pa rtners
unanimously elect either to dissolve the partnership or to cont inue
the partnership with the heirs, if, in the latter case, such he irs
accept:
Provided that where not all the heirs are in agreement, the
partnership may continue with those who so elect as long as thedissenting heirs’ interest in the partnership is liquidated in their
favour.
(2) Where the deceased partner has bequeathed his interest by
legacy, the provisions of sub-article (1) shall apply as thoughreferences to heirs were references to the legatees of such int erest.
Expulsion of a 
partner.
Amended by:
L.N. 181 of 2006;L.N. 186 of 2006.32. (1) A partner may be expelled from the partnership by a
decision of the majority in number of the other partners unless  a
higher majority is required by the partnership deed - 
(a) if he does not make his contribution in accordance
with the partnership deed;
(b) if he commits a serious breach of duty as a partner;
(c) if he contravenes the provisions of article 30(1);
(d) if he is interdicted or incapacitated;
(e) in such other cases for which provision is made in the
deed of partnership.
(2) Any decision taken as aforesaid shall be notified, together
                    COMP ANIES              [CAP. 386.       25
with the reasons therefor, by judicial act served on the expell ed
partner, and shall not take effect until the lapse of fourteen days
from such notification.
(3) The expelled partner may, by sworn application filed within
fourteen days from the notification as aforesaid, object to thedecision and the court shall have power to stay the execution o f the
said decision pending its judgment.
(4) Where the partnership consists of two partners only, the
expulsion of a partner may only be ordered by the court at the suit
of the other partner.
Discontinuation of 
membership.33. A partner shall not be entitled to continue as a partner if -
(a) he is adjudged bankrupt; or
(b) his interest in the partnership has been liquidated
under the provisions of article 22.
Rights of persons 
ceasing to be partners.34. (1) A partner who is expelled or who by virtue of the
immediately preceding article is not entitled to continue as pa rtner
shall have the right to have his interest in the partnershipliquidated.
(2) There shall be included in the liquidation of the interest o f a
partner who is expelled, or who by virtue of the immediatelypreceding article is not entitled to continue as a partner, a pro rata
share of the profits or losses on all work in progress up to th e date
of the expulsion.
Dissolution of 
partnerships en 
nom collectif.
Amended by:
IV . 2003.32.35. A partnership en nom collectif  is dissolved - 
(a) where the period, if any, fixed for its duration expires; 
(b) if, subject to the provisions of article 21, all the
partners so agree;
(c) if the partnership is adjudged bankrupt;
(d) if in the opinion of the Court there exist grounds of
sufficient gravity to warrant dissolution;
(e) if the number of partners is reduced below two and
remains so reduced for more than six months;
(f) subject to the provisions of article 21, in such other
cases for which provision is made in the deed ofpartnership.
Notice of 
dissolution.
Amended by:
XXIV . 1995.362.36. (1) On the dissolution of a partnership, and in no case later
than fourteen days after such dissolution, the partners having the
administration or the representation thereof shall deliver to t he
Registrar for registration a notice of the dissolution:
Provided that, where a partnership is adjudged bankrupt or
dissolved by order of the court, notice of the dissolution shal l be
given as aforesaid by the Registrar of Courts.
Cap. 13.(2) The following provisions of this Part shall apply to the
dissolution of a partnership except where the partnership isadjudged bankrupt, in which case the provisions of the 
Commercial
 26        CAP. 386. ]                         COMP ANIES
Code  relating to bankruptcy shall apply.
How a partnership 
en nom collectif may be wound up.37. (1) Where the manner in which the partnership is to be
wound up is not provided for in the deed of partnership or is n ot
determined by agreement between the partners, the partnershipshall be wound up by one or more liquidators.
(2) If the partners do not agree as to the person who is to be
appointed liquidator, the appointment shall be made by the cour t,
on the application of any partner, creditor of the partnership or the
Registrar.
(3) The liquidator shall, within fourteen days after his
appointment, deliver to the Registrar for registration a notice  of his
appointment stating his name and residence.
Power to remove 
liquidator.
Amended by:
IV . 2003.33;L.N. 181 of 2006;L.N. 186 of 2006.38. (1) A liquidator, whether appointed by the partners or by
the court, may be removed from office either by the partners, i f
they so agree, or by order of the court, on a demand by swornapplication made by any of the partners, if the court is satisf ied that
there exist sufficient grounds to warrant his removal.
(2) Where the office of a liquidator becomes vacant, the
provisions of article 37(2) shall apply.
Remuneration of 
liquidator.39. The remuneration of the liquidator may be fixed by
agreement between the partners and the liquidator, failing whic h it
shall be fixed by the court.
Costs of winding 
up payable in priority to all other claims.40. All costs, charges and expenses properly incurred in the
winding up, including the remuneration of the liquidator, shall  be
payable out of the assets of the partnership in priority to all  other
claims.
Penalty. 41. If default is made in complying with any of the
requirements of article 36 and of article 37(3), every partner or
liquidator, as the case may be, who is in default, shall be lia ble to a
penalty and, for every day during which the default continues, to a
further penalty.
Powers until 
provision is made for winding up.42. Until such time as provision is made for the winding up of
the partnership, only such acts as are of ordinary administrati on
may be performed.
Duties of partners 
vested with 
administration.43. (1) Where a liquidator is appointed, the partners vested
with the administration of the partnership shall - 
(a) deliver to the liquidator all the assets and all the
accounting records and other documents of thepartnership and shall draw up accounts relating to theiradministration for the period since the precedingaccounts; and
(b) together with the liquidator, draw up a balance sheet
showing the state of affairs of the partnership as at thedate of the dissolution.
(2) Subject to the provisions of sub-article (1), on the
appointment of a liquidator all the powers of administration orrepresentation of the partnership vested in any of the partners  shall
                    COMP ANIES              [CAP. 386.       27
cease.
Powers of 
liquidators.44. (1) The liquidator shall represent the partnership and shall
have power to perform all acts conducive and ancillary to thewinding up of the affairs of the partnership:
Provided that he shall not refer any matter to arbitration or
make any compromise unless so authorised in writing by thepartners.
(2) The liquidator shall not undertake any new transaction. (3) Where more than one liquidator is appointed, they shall act
jointly and shall be jointly and severally liable for their act s, unless
the partners have otherwise provided.
Liquidator not to 
distribute assets before paying debts.45. (1) The liquidator shall not distribute any assets of the
partnership among the partners unless either the debts andliabilities of the partnership have been paid or sufficient fun ds have
been set aside for the payment thereof.
(2) Where the assets of the partnership are insufficient to meet
its liabilities, the liquidator may demand from the partners pa yment
of the contribution, if any, due by them, irrespective of the d ate
when it falls due, and, if necessary, the sums required for thepayment of the aforesaid liabilities in the proportion in which  the
liabilities of the partnership are to be borne by the partners.
(3) The liquidator may furthermore demand from the partners
payment of the contribution, if any, due by them or any part of  it,
irrespective of the date when it falls due, for the purpose ofadjusting the rights of the partners among themselves.
Duty of liquidator 
to give information, to render account and prepare scheme of distribution.46. (1) The liquidator shall, at the request of any of the
partners, inform the partners as to the state and progress of t he
liquidation.
(2) As soon as the affairs of the partnership are wound up, the
liquidator shall render an account of the winding up and of hisreceipts and payments and draw up a scheme of distribution.
Rules applicable to 
distribution of assets.47. In the distribution of the assets of a partnership the
following provisions shall apply, unless otherwise provided in the
deed of partnership, that is to say - 
(a) where a thing has been contributed in usufruct or
enjoyment, it shall be restored to the partnercontributing it and the partnership shall be held liablein damages if the thing has perished or deteriorated forany cause attributable to any of the partners, saving theright of the partnership to the reimbursement of anysums so paid against the partner who is at fault;
(b) the assets of the partnership shall first be applied in
repayment of the contributions of the partners and anybalance shall be distributed among the partners inproportion to their share in the profits of thepartnership;
 28        CAP. 386. ]                         COMP ANIES
(c) where it has been agreed that the distribution of the
assets shall be made in kind, the provisions governingpartition of common property shall apply.
Approval of 
accounts and scheme of distribution.
Amended by:
L.N. 181 of 2006;L.N. 186 of 2006.48. (1) The liquidator shall by judicial act serve on each of the
partners a copy of the accounts and of the scheme of distributi on
mentioned in article  46(2).
(2) The accounts and the scheme of distribution shall be
deemed to have been approved by all the partners if no objectio n
thereto is lodged by sworn application by any of the partners w ithin
three months of the service of the judicial act referred to in sub-
article (1).
Striking of name of 
partnership off register.
Amended by:
IV . 2003.34;XV . 2007.4.49. (1) On the approval of the accounts, the liquidator shall
deliver to the Registrar for registration a notice of such appr oval
and the Registrar shall thereupon register it. Subject to theprovisions of article 21 in relation to the period established in sub-
article (1) thereof and to the rights of creditors under sub-ar ticle (2)
thereof, the Registrar shall strike the name of the partnership  off
the register and shall forthwith publish a notice of completion  of
the winding up and of such striking off.
(2) Where the manner in which the partnership is to be wound
up is provided for in the deed of partnership or is determined by
agreement between the partners, it shall be the duty of the par tners
to deliver to the Registrar for registration a notice, signed b y all of
them, that the winding up has been completed and the Registrarshall thereupon register it. Subject to the provisions of artic le 21 in
relation to the period established in sub-article (1) thereof a nd to
the rights of creditors under sub-article (2) thereof, the Regi strar
shall strike the name of the partnership off the register and s hall
forthwith publish a notice of the completion of the winding up and
of such striking off.
Preservation of 
accounting records and documents after dissolution.50. (1) The accounting records and the documents of the
partnership shall be kept by the liquidator, if any, or by the person
elected for that purpose by the majority of the partners and sh all be
so kept for a period of ten years from the date at which the na me of
the partnership was struck off the register. The election of su ch
person shall take place within fourteen days from the registrat ion of
the notice referred to in article 49 and shall not be effected until
such person has signified his acceptance in writing to the part ners
within fourteen days from his election:
Provided that where there is no liquidator and the partners
fail to elect such person or where such person refuses to accep t his
election, the accounting records and documents shall be deliver ed
to the Registrar within fourteen days of the non-acceptance orfailure to elect as the case may be, and the Registrar shall ke ep such
records for the said period of ten years.
(2) Where a person has been elected to keep the accounting
records and the documents of the partnership, or where the part ners
have failed to elect such a person, the partners shall inform t he
Registrar accordingly within fourteen days of the date when the
                    COMP ANIES              [CAP. 386.       29
election becomes effective or from the failure to elect within the
prescribed period, as the case may be, and in default, the part ners
shall be liable to a penalty.
(3) If the liquidator or the person elected by the partners to
keep the accounting records and documents of the partnership fa ils
to keep them for the period prescribed by sub-article (1), he s hall
be liable to a penalty.
(4) If the liquidator or the person elected by the partners to
keep the accounting records and documents of the partnership di es,
his heirs shall be obliged to deliver the said accounting recor ds and
documents to the Registrar within six months and the Registrarshall keep them for the remainder of the period prescribed by s ub-
article (1).
(5) The heirs referred to in sub-article (4) shall be liable to a
penalty if they do not comply with the provisions of that sub-article. 
Amended by:
IV . 2003.35.PART IV - PARTNERSHIP EN COMMANDITE
OR LIMITED PARTNERSHIP
Definition.
Amended by:
IV . 2003.35, 36;XXII. 2014.19.51. A partnership en commandite  or limited partnership
operates under a partnership-name and has its obligationsguaranteed by the unlimited and joint and several liability of one or
more partners, called general partners, and by the liability, l imited
to the amount, if any, unpaid on the contribution, of one or mo re
partners, called limited partners:
Provided that where, and for as long as, none of the general
partners is either an individual or a body corporate which has its
obligations guaranteed by the unlimited and joint and severalliability of one or more of its members, the provisions of arti cle
51A shall also apply to that partnership en commandite  or limited
partnership.
When none of the 
general partners is an individual or  a body corporate which has its obligations guaranteed by  the unlimited and joint and several liability of one or more of its members.
Added by:
XXII. 2014.20.51A. (1) The provisions of this article shall apply to a
partnership en commandite  or limited partnership where, and for as
long as, none of the general partners is either an individual o r a
body corporate which has its obligations guaranteed by theunlimited and joint and several liability of one or more of itsmembers.
(2) A partnership en commandite  or limited partnership which,
either on formation or at any time thereafter, becomes subject to the
provisions of this article shall, within fourteen days, deliver  to the
Registrar for registration a notice specifying that it is subje ct to this
article and that it shall comply with the provisions laid down in this
article.
(3) When a partnership en commandite  or limited partnership
ceases to be subject to the provisions of this article, the par tnership
shall, within fourteen days of such cessation, deliver to theRegistrar for registration a notice specifying that it is no lo nger
subject to this article and that the provisions of this article  shall not
 30        CAP. 386. ]                         COMP ANIES
apply to such partnership as from the date that it has ceased t o be so
subject.
(4) Notwithstanding any other penalties imposed by this Act,
any partner of the partnership en commandite  or limited partnership
who fails to comply with the provisions of sub-articles (2) and  (3)
shall be liable to a penalty, and, for every day during which t he
default continued, to a further penalty.
(5) The provisions of Chapters IX and X of Part V of this Act,
other than the provisions of article 184, shall mutatis mutandis
apply to a partnership en commandite  or limited partnership subject
to this article for as long as such partnership continues to be  so
subject.
(6) Where a partnership en commandite  or limited partnership
subject to the provisions of this article is dissolved, a liqui dator
shall be appointed and the provisions of articles 305 and 306 s hall
mutatis mutandis apply. The provisions of article 37(1) and art icle
48 shall not apply.
(7) ( a) As soon as the affairs of the partnership en commandite
or limited partnership are fully wound up, theliquidator shall make an account of the winding up,showing how the winding up has been conducted andhow the property of such partnership has been disposedof, and shall draw up a scheme of distribution and heshall cause the account to be audited by one or moreauditors appointed by a decision of the generalpartners. The liquidator shall serve on each of thepartners a copy of the accounts and of the scheme ofdistribution, if any, together with the auditors’ reportand any explanation thereof.
(b) The accounts and the scheme of distribution shall be
deemed to have been approved by all the partners if no
objection thereto is lodged by application by any of thepartners within three months of the service referred toin paragraph ( a).
(c) The provisions of article 153 shall apply to an auditor
appointed in terms of paragraph ( a). Such auditor shall
not be a person who has held the office of auditor ofthe partnership en commandite or limited partnershipat any time during the last three years immediatelypreceding the date of dissolution.
(8) The Minister may make regulations for the better carrying
out of any of the provisions of this article; and without preju dice to
the generality of the foregoing may, by such regulations, inparticular exempt or provide for the exemption of such partners hip
en commandite  or limited partnership from any of the provisions of
this Act or of any other law in force, subject to such modifica tions,
variations and conditions that may be specified thereunder.
                    COMP ANIES              [CAP. 386.       31
Applicability of 
provisions governing partnerships en 
nom collectif.
Amended by:
IV . 2003.35.52. The provisions governing partnerships en nom collectif
shall apply to partnerships en commandite  or limited partnership
except insofar as they are inconsistent with the provisions of this
Part.
Partnership-name.
Amended by:
IV . 2003.37.53. (1) A person, including a limited partner, who holds
himself out as being a general partner shall be held liableunlimitedly and jointly and sever ally with the general partners  for
all the obligations contracted by the partnership.
(2) The inclusion in the partnership-name of the name of a
person who is not a general partner shall be taken into account  by
the court in determining whether such person is holding himself  out
as being a general partner.
Contribution of 
limited partner not to include personal services.54. The contribution of a limited partner shall not include
personal services.
Contents of deed of 
partnership.
Amended by:
IV . 2003.35.55. The deed of partnership of a partnership en commandite  or
limited partnership, in addition to the particulars prescribed by
article 14, shall specify which of the partners are general par tners
and which of them are limited partners, and in default thepartnership shall resolve itself into a partnership en nom collectif.
Rights and duties 
of partners.56. (1) Unless otherwise provided in the other provisions of
this Part the rights and duties of the general partners shall b e the
same as those of partners in a partnership en nom collectif .
(2) Unless otherwise provided in the deed of partnership but
subject to the provisions of this Part, limited partners shall have
only the rights and duties provided by this Part.
Administration and 
representation.
Amended by:
IV . 2003.35.57. The administration and representation of the partnership en
commandite  or limited partnership shall vest in the general
partners, and unless the deed of partnership otherwise provides ,
such administration and representation shall vest in each of th e
general partners severally.
Appointment of 
partners to administer and represent partnerships en 
commandite or 
limited partnership .
Amended by:
IV . 2003.35, 38.58. The general partners shall by unanimous decision have the
right to appoint the partners from amongst themselves who are t o
administer and represent the partnership en commandite  or limited
partnership and to dismiss from office the partners so appointe d:
Provided that the deed of partnership may provide that the
limited partners shall have the right to participate in theappointment of general partners to, or the dismissal of generalpartners from the office of administration and representation o f the
partnership.
Limited partner 
cannot take part in management of partnership en 
commandite or 
limited partnership .
Amended by:
IV . 2003.35.59. (1) A limited partner shall not perform any act of
administration nor transact business on behalf of the partnersh ip en
commandite  or limited partnership except by virtue of a power of
attorney given for specified acts or transactions.
(2) If a limited partner acts in contravention of the aforesaid
prohibition, he shall be bound, in regard to third parties,unlimitedly and jointly and sever ally with the general partners  for
 32        CAP. 386. ]                         COMP ANIES
all the obligations of the partnership en commandite  or limited
partnership and shall moreover be liable to be expelled from th e
partnership in accordance with the provisions of article 32: 
Provided that a limited partner acting in contravention of
the prohibition contained in sub-article (1) shall not be expel led
from the partnership if he proves that he had been acting on th e
instructions of the general partners.
Communication of 
yearly accounts to limited partners.
Amended by:
IV . 2003.35.60. At the end of each accounting period the balance sheet and
profit and loss account of the partnership en commandite  or limited
partnership shall be communicated to the limited partners, who,  for
the purpose of ascertaining their correctness, shall have a rig ht of
access to the accounting records and other documents of thepartnership.
Non-applicability 
of certain articles to limited partners.61. The provisions of article 30 and of article 32(1)( c) shall not
apply to a limited partner.
Limited partner not 
bound to restore profits received in good faith.62. Notwithstanding the provisions of article 28, a limited
partner shall in no case be bound to restore profits received i n good
faith.
Assignment of 
interest by limited partner and rights of limited partners.
Amended by:
IV . 2003.35.63. (1) Unless the deed of partnership otherwise provides, a
limited partner may assign his interest in the partnership en
commandite  or limited partnership: 
Provided that, if the contribution of a limited partner is not
fully paid up, any assignment of his interest in the partnershi p shall
not have effect, with regard to the partnership, unless it is m ade
with the consent of all the general partners.
(2) Unless the deed of partnership otherwise provides, any
changes in the deed of partnership which deprive limited partne rs
of any of their rights shall require the unanimous consent of a ll the
general partners and of all the limited partners.
Death or expulsion 
of limited partner.
Amended by:
IV . 2003.35.64. (1) Unless the deed of partnership otherwise provides, in
the event of death of a limited partner, the partnership en
commandite  or limited partnership shall continue with his heirs.
(2) Notwithstanding the provisions of article 32, interdiction o r
incapacitation shall not be grounds for expulsion of a limitedpartner.
Dissolution of 
partnership en 
commandite or 
limited partnership .
Amended by:
IV . 2003.35.65. (1) A partnership en commandite  or limited partnership,
besides being determinable for any of the causes mentioned inarticle 35, shall be dissolved if no general partner or no limi ted
partner remains, unless, within six months, the partner who hasceased to be a partner shall have been substituted.
(2) Where no general partner remains, the limited partners may,
for the said period of six months, appoint one of their number for
the performance of acts of ordinary administration.
(3) A limited partner appointed as aforesaid shall not be subjec t
to the provisions of article 59.
                    COMP ANIES              [CAP. 386.       33
Division of capital 
into shares.
Amended by:
IV . 2003.35, 39;L.N. 181 of 2006;L.N. 186 of 2006;IX. 2008.5.66. (1) Without prejudice to the foregoing provisions of this
Part, the capital of a partnership en commandite  or limited
partnership may be divided into shares.
(2) The provisions of this Act relating to shares in a company
other than the provisions of article 72 shall apply to the shar es in a
partnership en commandite  or limited partnership in so far as they
are not inconsistent with the foregoing provisions of this Part .
(3) The provisions of Chapters IX and X of Part V of this Act,
other than for the provisions of article 184, shall apply to apartnership en commandite  or limited partnership, the capital of
which is divided into shares.
(4) It shall be the duty of the partner vested with the
administration or representation of a partnership en commandite  or
limited partnership, the capital of which is divided into share s, to
deliver to the Registrar for registration the instrument or a c opy
thereof as required by article 19 altering or adding to the dee d of
partnership within fourteen days from the date of the said alte ration
or addition, together with a printed copy of the deed of partne rship,
as amended; and any previous amended text of the deed ofpartnership may be discarded by the Registrar when a subsequentamended text is delivered to him for registration:
Provided that in the event of a discrepancy between the text
of any amended deed of partnership and the text of the originaldeed of partnership registered in accordance with the provision s of
article 16, the latter text together with any instruments regis tered in
accordance with the provisions of sub-article (4), shall prevai l.
(5) The provisions of article 78, of article 137(4), (5) and (6)
and of article 142(2) shall apply to a partnership en commandite  or
limited partnership, the capital of which is divided into share s, with
the substitution of references to partners vested with administ ration
or representation for references to directors, officials or the  Board
of directors; with the substitution of references to partnershi p en
commandite  or limited partnership, the capital of which is divided
into shares, for references to company; with the substitution o f
references to deed of partnership for references to memorandum or
memorandum and articles; with the substitution of partners forreferences to shareholders; and,  with regard to article 137(5),  with
the substitution of the term "a decision of the partners" for t he term
"any resolution of the general meeting or from a decision of th e
Board of directors".
(6) If default is made in complying with the provisions of sub-
article (4), every partner vested with the administration orrepresentation of a partnership en commandite  or limited
partnership the capital of which is divided into shares who is in
default shall be liable to a penalty, and for every day during which
the default continues, to a further penalty.
(7) A partnership en commandite  or limited partnership, the
capital of which is not divided into shares, may change its sta tus to
a partnership en commandite  or limited partnership, the capital of
which is divided into shares, by a decision taken in accordance  with
the provisions of the deed of partnership, or, in the absence o f any
 34        CAP. 386. ]                         COMP ANIES
such provision, with the consent of all the partners, both gene ral
and limited:
Provided that where one or more limited partners, holding
in the aggregate not more than one-fourth of the total contribu tion
of the limited partners, have not given their consent the partn ership
en commandite  or limited partnership may nevertheless proceed
with the change of its status, but it shall be required, for th e
purpose of such change, to liquidate and re-imburse to everypartner who has not given his consent, if he so requests, his i nterest
in the partnership en commandite  or limited partnership on such
terms as may be agreed, or as the court, on a demand of either the
partnership or the limited partner, may deem fit to order.
(8) A partnership en commandite  or limited partnership, the
capital of which is divided into shares, may change its status to a
partnership en commandite  or limited partnership, the capital of
which is not divided into shares, by a decision taken in accord ance
with the provisions of the deed of partnership or, in the absen ce of
any such provision, with the consent of all the partners, bothgeneral and limited:
Provided that where one or more limited partners, holding
in the aggregate not more than one-tenth of the share capital o f the
partnership, have not given their consent, the partnership en
commandite  or limited partnership may nevertheless proceed with
the change of its status, but it shall be required, for the pur pose of
such change, to redeem the shares held by every partner in thepartnership en commandite  or limited partnership who has not
given his consent, if he so requests, on such terms as may be a greed
or as the court on a demand of either the partnership or of thelimited partner may deem fit to order.
(9) It shall be the duty of the partner vested with the
administration or representation of a partnership en commandite  or
limited partnership, which has decided to change its status inaccordance with sub-article (7), to deliver to the Registrar fo r
registration the instrument or a copy thereof as required by ar ticle
19, altering or adding to the deed of partnership together with  a
printed copy of the deed of partnership as amended, and theprovisions of sub-article (4) shall thereafter apply to thepartnership.
(10) It shall be the duty of the partner vested with the
administration or representation of a partnership en commandite  or
limited partnership which has decided to change its status inaccordance with sub-article (8), to deliver to the Registrar fo r
registration, the instrument or a copy thereof as required by a rticle
19, altering or adding to the deed of partnership together with  a
printed copy of the deed of partnership as amended, and theprovisions of sub-article (4) shall thereafter no longer apply to the
partnership.
(11) The change of status referred to in sub-article (7) or in s ub-
article (8) shall not take effect unless and until it is regist ered as
required by sub-article (9) or by sub-article (10) respectively , of
this article.
                    COMP ANIES              [CAP. 386.       35
(12) ( a) Where a partnership en commandite or limited
partnership, the capital of which is divided into shares,is dissolved and a liquidator has been appointed, assoon as the affairs of the partnership are fully woundup, the liquidator shall make an account of the windingup, showing how the winding up has been conductedand how the property of the partnership en commandite
or limited partnership has been disposed of, and shalldraw up a scheme of distribution and he shall cause theaccount to be audited by one or more auditorsappointed by a decision of the partners. The liquidatorshall by judicial act serve on each of the partners acopy of the accounts and of the scheme of distribution,
if any, together with the auditors’ report and giving anyexplanation thereof.
(b) The accounts and the scheme of distribution shall be
deemed to have been approved by all the partners if noobjection thereto is lodged by sworn application by anyof the partners within three months of the service ofthe judicial act referred to in paragraph ( a).
(c) The provisions of article 153 shall apply to an auditor
appointed in terms of paragraph ( a). Such auditor shall
not be a person who has held the office of auditor ofthe partnership en commandite  or limited partnership at
any time during the last three years immediatelypreceding the date of dissolution.
Partnership en 
commandite  or 
limited partnership.
Added by:
IV . 2003.40.
Amended by:
XV . 2007.5;
XIX. 2010.29;XX. 2013.74;V .2020.20.
Cap. 370.66A. (1) This article shall apply to a partnership en
commandite  or limited partnership the capital of which may or may
not be divided into shares, which in the deed of partnership ex pressly
limits its object either to the collective investment of its fu nds in
securities and in other movable and immovable property, or in a ny of
them, with the aim of giving the partners the benefit of the results of
the management of its funds, and to matters ancillary or incide ntal
thereto, and which qualifies as a collective investment scheme and
is duly licensed, recognised, exempted or otherwise regulated i n
terms of the Investment Services Act, or otherwise to any other
purpose as may be prescribed in the Tenth Schedule or as the Mi nister
may from time to time prescribe by regulations.
Cap. 13.(2) A partnership en commandite  or limited partnership within the
meaning of sub-article (1) shall be regulated by the provisionscontained in the Tenth Schedule and by any regulations made by the
Minister in terms of this article; the provisions of this Part of this Act,
other than this article, and articles 13 to 18, article 21 and Part III of
the 
Commercial Code, shall not apply to any such partnership except
and to the extent that they are expressly made applicable by me ans of
the said Schedule or by means of any such regulations.
(3) The Minister may make regulations for the better carrying
out of the provisions of this article and of any of the provisi ons of
the Tenth Schedule, and may, without prejudice to the generalit y of
the foregoing, by such regulations make provisions as to any of  the
following matters:
 36        CAP. 386. ]                         COMP ANIES
(a) the forms and returns to be used  in respect of such
partnerships en commandite  or limited partnerships
within the meaning of sub-article (1), for the purposesof this Act or such other purposes as may beprescribed therein;
(b) the registration of such partnerships en commandite  or
limited partnerships under this Act within the meaningof sub-article (1) and any matters incidental thereto;
(c) the records and accounts to be kept by such
partnerships en commandite  or limited partnerships
within the meaning of sub-article (1) and any matterincidental thereto;
(d) the prescription of fees payable under this Act in
respect of such partnerships en commandite  or limited
partnerships within the meaning of sub-article (1);
(e) the exemption of partnerships en commandite  o r
limited partnerships within the meaning of sub-article(1) or any category thereof from any of the provisionsof the Tenth Schedule or of this Act or of any other law
which may otherwise be applicable thereto, as the case
may be, subject to such modifications, variations andconditions as may be specified;
(f) any other matters to be prescribed under this Act or the
Tenth Schedule in respect of such partnerships en
commandite  or limited partnerships within the meaning
of sub-article (1), or any other matters to better regulatethe provisions of the Tenth Schedule in respect of suchpartnerships en commandite  or limited partnerships
within the meaning of sub-article (1) or any categorythereof.
PART V - LIMITED LIABILITY COMPANY 
TITLE I - FORMATION AND FUNCTIONING OF 
COMPANIES
Chapter I - Formation of a company and matters incidental 
thereto
Definition. 67. A company is formed by means of a capital divided into
shares held by its members. The members’ liability is limited t o the
amount, if any, unpaid on the shares respectively held by each of
them.
How a company is 
constituted.
Amended by:
XX. 2013.75.68. A company shall not be validly constituted under this Act
unless a memorandum of association is entered into and subscribed
by at least two persons, or in the case of a single member comp any
constituted in terms of article 212, by the single member, and a
certificate of registration is issued in respect thereof. Compa nies
formed and registered under the Ordinance shall comply with thi s
Act in accordance with the provisions of article 428.
                    COMP ANIES              [CAP. 386.       37
Contents of 
memorandum.
Amended by:
IV . 2003.41;XXXI. 2017.75.69. (1) The memorandum of every company shall state:
(a) whether the company is a public company or a private
company;
(b) the name and residence of each of the subscribers
thereto;
(c) the name of the company;
(d) the registered office in Malta of the company; 
(e) the objects of the company;
(f) the amount of share capital with which the company
proposes to be registered (hereinafter referred to as"the authorised capital"), the division thereof intoshares of a fixed amount, the number of shares takenup by each of the subscribers and the amount paid upin respect of each share and, where the share capital isdivided into different classes of shares, the rightsattaching to the shares of each class;
(g) the number of the directors, the name and residence of
the first directors and, where any of the directors is abody corporate, the name and registered or principaloffice of the body corporate, the manner in which therepresentation of the company is to be exercised, andthe name of the first person or persons vested withsuch representation;
(h) the name and residence of the first company secretary
or secretaries, or where a company secretary is a bodycorporate, the name, registration number and registeredoffice of the body corporate;
(i) the period, if any, fixed for the duration of the
company. 
(2) In the case of a public company, there shall be annexed to
the memorandum a document providing:
(a) the total amount or an estimate of all the costs payable
by the company or chargeable to it by reason of itsformation up to the time it is authorised to commencebusiness, and of all the costs relating to transactionsleading to such authorisation; and
(b) a description of any special advantage granted prior to
the time the company is authorized to commencebusiness to anyone who has taken part in the formationof the company or in transactions leading to suchauthorisation:
Provided that, where in accordance with the proviso to
article 77(1), a company is authorised to commence business at a
date later than the date of its registration, the said document  shall
be delivered to the Registrar for registration within fourteen days
from the date the company is authorised to commence business.
(3) Companies formed and registered before the coming into
force of this sub-article shall comply with the provisions of s ub-
 38        CAP. 386. ]                         COMP ANIES
article (1)( f) on the disclosure, in the memorandum of association
of the company, of the rights attaching to the shares of eachdifferent class, within twelve months from the coming into forc e of
this sub-article:
Provided that companies formed and registered before the
coming into force of this sub-article shall be deemed to satisf y the
requirements of sub-article (1)( f) on the disclosure, in the
memorandum of association, of the rights attaching to the share s of
each different class, if such provision or equivalent thereof i s
already incorporated in the articles of association of the comp any.
Name of company.
Amended by:
IV . 2003.42;XIII. 2004.96;XX. 2013.76.70. (1) Subject to the provisions of sub-articles (3) to (6), a
public company may be designated by any name, but such namemust end with the words "public limited company" or theirabbreviation "p.l.c.":
Provided that where the public company is a ‘societas
europaea’ in accordance with 
Council Regulation (EC) No 2157/
2001  of 8 October 2001 on the Statute for a European company, in li eu
of the words "public limited company" or their abbreviation "p. l.c.",
the name of the public company shall be preceded or followed by  the
abbreviation "SE".
(2) Subject to the provisions of sub-articles (3) to (6), a priv ate
company may be designated by any name, but such name shall endwith the words "private limited company" or the word "limited" or
its abbreviation "ltd.".
(3) ( a) Where a private company is an investment company
with variable share capital, the name of the companyshall be followed by the words "investment companywith variable share capital" or by "SICA V", followedby the words "private limited company", "limited" orits abbreviation.
(b) Where a public company is an investment company
with fixed share capital or an investment companywith variable share capital, the name of the companyshall be followed by the words "investment companywith fixed share capital" or "investment company withvariable share capital", as the case may be, followedby the words "public limited company", or itsabbreviation. The words "investment company with
fixed share capital" may be replaced with theabbreviation "INVCO" and the words "investment
company with variable share capital" may be replacedwith "SICA V".
(4) A company shall not be registered by a name which -
(a) is the same as a name of another commercial
partnership or so nearly similar as in the opinion of theRegistrar it could create confusion; or
(b) is in the opinion of the Registrar offensive or
otherwise undesirable; or
(c) has been reserved for registration for another
                    COMP ANIES              [CAP. 386.       39
commercial partnership by a notice in writing to the
Registrar given not more than three months before thedate of the second request:
Provided that the Registrar shall notify any refusal under
this sub-article without delay to the person requesting theregistration: 
Provided further that in applying paragraph ( b), the
Registrar shall have regard, inter alia , to the business or proposed
business of the company, to the protection of the names of pers ons
who are not connected in any way with the company, and, in thecase of a private company, to the names of the members.
(5) A company shall not be registered by a name which
includes the word "fiduciary", "nominee" or "trustee", or anyabbreviation, contraction or derivative thereof, unless suchcompany is authorised to act as a trustee in terms of the appli cable
laws of Malta, or unless otherwise permitted to do so by therelevant competent authority.
(6) A person or persons trading or carrying on business or other
activity - 
(a) under a name or title which ends with the words
"public limited company" or "p.l.c." or "private limitedcompany" or "limited" or "ltd." or a contraction orimitation thereof and which is not the name of a dulyregistered company; or
(b) under a name or title which contains the words
"fiduciary", "nominee" or "trustee", or anyabbreviation, contraction or derivative thereof, whichis not the name of a company which is authorised touse such name as provided in sub-article (5); or
(c) under a name or title which contains the words
"investment company with fixed share capital" or"INVCO" or a contraction or imitation thereof when the
person or persons are not a public company which isan investment company with fixed share capital; or
(d) under a name or title which contains the words
"investment company with variable share capital" or"SICA V" or a contraction or imitation thereof when theperson or persons are not an investment company withvariable share capital,
shall be liable to a penalty, and, for every day during which t he
default continues, to a further penalty.
Objects of 
company.71. The objects of a company may not be simply stated to be
any lawful purpose or trade in general.
Minimum share 
capital.
Amended by:
XV . 2007.6;L.N. 425 of 2007;XI. 2017.3.72. (1) The authorised share capital of a company shall be -
not less than forty-six thousand and five hundred and
eighty-seven euro and forty-seven cents (46,587.47)subscribed by at least two persons in the case of apublic company; or 
 40        CAP. 386. ]                         COMP ANIES
not less than one thousand and one hundred and sixty-
four euro and sixty-nine cents (1,164.69) subscribedby at least two persons in the case of a privatecompany.
(2) Where the authorised share capital is equal to the minimum
aforesaid, it shall be fully subscribed in the memorandum, andwhere it exceeds such minimum, at least that minimum shall besubscribed in the memorandum.
(3) In the case of a public company, not less than twenty-five
per cent, and in the case of a private company, not less than t wenty
per cent, of the nominal value of each share taken up shall be paid
up on the signing of the memorandum.
(4) The ordinary shares of a company shall not be redeemable,
and every company shall at all times have ordinary shares.
(5) Only preference shares which are to be redeemed or are
liable to be redeemed by the terms of their issue shall beredeemable, and other shares in a company may not be convertedinto redeemable shares.
Consideration for 
acquisition of shares.73. (1) The consideration for the acquisition of shares in a
company whether on the original subscription or a subsequentissue, may only consist of assets capable of economic assessmen t,
and furthermore, future personal services and in general anyundertakings to perform work or supply services may not be give n
by way of consideration.
(2) Where, on original subscription, the shares are issued for a
consideration other than in cash, the full consideration shall be
transferred to the company within five years from the date thecompany is authorised to commence business.
(3) Where shares are issued other than on original subscription
for a consideration other than in cash, the full consideration shall
be transferred within five years from the date of the decision to
issue the shares.
(4) A report on any consideration other than in cash shall be
drawn up before the company is registered or before the shares are
issued, as the case may be, by one or more experts who areindependent of the company and approved by the Registrar.
(5) The expert’s report shall contain at least a description of
each of the assets comprising the consideration as well as themethods of valuation which have been used and shall state wheth er
the values arrived at by the application of these methodscorrespond at least to the number and nominal value, and, whereapplicable, to the premium on the shares to be issued for them.
(6) The report shall be delivered to the Registrar for
registration before the company is registered or before the sha res
are issued, as the case may be; and, in default, the Registrar shall
accordingly refuse to register the company or the return of theallotments of the shares so issued, and, in the latter case, th e issue
shall be considered null and void.
                    COMP ANIES              [CAP. 386.       41
(7) Where an amount standing to the credit of any of a
company’s reserve accounts or of its profit and loss account isapplied in paying up to any extent any shares allotted to membe rs
of the company or any premiums on shares so allotted, the amoun t
applied shall not be considered as consideration other than in cash
for the purposes of this article.
Transfer to 
company of non- cash asset in first two years.
Amended by:
IV . 2003.43;IX. 2008.6.74. (1) A company shall not acquire, within two years of its
authorisation to commence business, any asset belonging to aperson who subscribed the company’s memorandum or who is amember of the company for a consideration which is equivalent t o
at least one tenth of the issued capital of the company unless the
following conditions are satisfied:
(a) the asset to be received by the company, and any
consideration other than cash to be given by thecompany, shall have been valued by one or moreexperts who are independent of the company andapproved by the Registrar;
(b) a report with respect to the matters specified in
paragraph ( a) shall have been made to the company
during the six months immediately preceding the dateof the agreement;
(c) the terms of the agreement shall have been approved
by ordinary resolution; and
(d) not later than the giving of notice of the meeting at
which the resolution is proposed, copies of theresolution and of the report shall have been circulatedto the members of the company entitled to receivenotice of the meeting and, if the person with whom theagreement in question is proposed to be made is notthen a member of the company so entitled, to thatperson.
(2) The report referred to in sub-article (1)( b) shall be delivered
to the Registrar for registration at the same time as it is cir culated
in accordance with sub-article (1)( d). If the company fails to
comply with this sub-article, every officer of the company who is
in default shall be liable to a penalty.
(3) If a company enters into an agreement in contravention of
this article and either - 
(a) the person with whom the company made the
agreement has not received the expert’s report requiredfor compliance with the conditions of this article; or
(b) there has been some other contravention of this article
which that person knew or ought to have knownamounted to a contravention,
the company shall be entitled to recover from that person any
consideration given by it under the agreement, or an amount equ al
to the value of the consideration at the time of the agreement,  and
the agreement, so far as not carried out, shall be void.
(4) The provisions of this article shall not apply -
 42        CAP. 386. ]                         COMP ANIES
(a) where it is part of the company’s ordinary business to
acquire, or arrange for other persons to acquire, assetsof a particular description, to an agreement enteredinto by the company in the ordinary course of itsbusiness for the transfer of an asset of that descriptionto it or to such person, as the case may be; or
(b) to acquisitions made by the company at the instance or
under the supervision of the court; or
(c) to acquisitions made on a regulated market or on an
equivalent market in a non-Member State or non-EEAState.
Articles of 
association.75. (1) There may be registered with the memorandum,
articles of association (hereinafter referred to as "articles")  which
shall be signed by the subscribers to the memorandum andprescribing regulations for the company.
(2) If articles are not registered, or, if articles are register ed, in
so far as the articles do not exclude or modify the regulationscontained in the First Schedule, such regulations shall be theregulations of the company in the same manner and to the sameextent as if they were contained in duly registered articles.
Registration of 
memorandum and articles.
Amended by:
IV . 2003.44.76. (1) The memorandum and articles, if any, shall be
delivered for registration to the Registrar who, being satisfie d that
all the requirements of articles 68 to 73 and of articles 75 an d 139
have been complied with, shall register them.
(2) Where the memorandum or the articles are drawn up in a
public deed or in a private writing enrolled in the records of a
notary public, an authentic copy thereof shall be delivered in lieu of
the original.
(3) The aforesaid delivery shall be made by any one of the
subscribers to the memorandum, or the authorised agent of suchsubscriber.
(4) Notwithstanding the provisions of sub-article (1), and
without prejudice to the provisions of article 77(2), theresponsibility for ensuring that the articles of association, i f any, of
a company, are correct, complete and in full compliance with th is
Act and any other applicable law shall lie with the persons who
have entered into and subscribed to the memorandum ofassociation.
Duty of Registrar 
and effects of registration.
Amended by:
XIII. 2004.97.77. (1) On the registration of the memorandum and articles, if
any, of a company, the Registrar shall certify under his hand t hat
the company is registered, and the company shall come intoexistence and shall be authorised to commence business as from the
date of registration which date shall be indicated in the certi ficate:
Provided that if registration is obtained before the date, if
any, fixed in the memorandum for the commencement of thecompany, the certificate shall indicate such date and the compa ny
shall come into existence and shall be authorised to commencebusiness as from such later date.
                    COMP ANIES              [CAP. 386.       43
(2) A certificate of registration given in respect of a company
is conclusive evidence that the requirements of this Act in res pect
of registration and of matters precedent and incidental to it h ave
been complied with and that the company is duly registered as apublic or private company under this Act.
(3) The registration of a company by the Registrar under this
article shall be without prejudice to any other licence or othe r
authorisation as may be required in respect of the activities t o be
carried on by the company under any other law.
Where certificate 
of registration is not issued.78. (1) All persons carrying on business or entering into
agreements in the name of or on behalf of a company in respect of
which a certificate of registration has not been issued under t his
Act, or before the date indicated in the certificate of registr ation as
the date on which the company shall come into existence, shall,unless otherwise agreed, be personally and jointly and severall y
liable for their dealings with third parties entered into by th em in
the aforementioned capacity.
(2) Failing agreement to the contrary , the persons referred to i n
sub-article (1) shall have, as against one another and in respe ct of
the assets and liabilities arising out of the business carried on in the
company’s name or on its behalf, the rights and obligations of joint
owners.
(3) Notwithstanding the provisions of sub-article (1), the
dealings referred to in that sub-article shall, with respect to  a third
party who has dealt in good faith with persons purporting to ac t in
the name of or on behalf of a company in respect of which acertificate of registration has not been issued under this Act or
which has not yet come into existence, with effect from the dat e on
which the company shall come into existence, be treated as havi ng
been undertaken by the company; provided that in such an event the
provisions of sub-article (1) shall not apply. The company shal l be
entitled to be indemnified by the persons who had acted in its name
or on its behalf in respect of its liability under this sub-art icle
towards the said third party.
Alterations and 
additions to memorandum and articles.
Amended by:
IV . 2003.45.79. (1) A company may by extraordinary resolution alter or
add to its memorandum or articles:
   Provided that - 
(i) where the alteration consists in a change of the
registered office in Malta of the company suchalteration may be effected by a resolution of thedirectors; and
(ii) where the alteration consists in the conversion of
any shares into stock or in the reconversion ofthat stock into shares, such alteration may onlybe made if the shares to be converted are paid upshares and if the stock is reconverted into paidup shares, but, if the company is so authorisedby its memorandum or articles, it may byordinary resolution convert any paid up shares
 44        CAP. 386. ]                         COMP ANIES
into stock and reconvert that stock into paid up
shares of any denomination.
(2) It shall be the duty of the directors and of the company
secretary to deliver to the Regi strar for registration a printe d copy
of any resolution as aforesaid within fourteen days after the d ate of
the resolution, together with a revised and updated copy of thememorandum, and of the articles, if any, as amended by the saidresolution and incorporating all the changes effected to daterelating to the directors, company secretary, the representatio n of
the company, change in registered office of the company, or anytransfer or transmission of shares or any allotment of shares. Any
previous amended text of the memorandum and articles, if any, m ay
be discarded by the Registrar when a subsequent amended text isdelivered to him for registration:
Provided that in the event of a discrepancy between the text
of any amended memorandum and articles, if any, and the text ofthe original memorandum and articles, if any, registered inaccordance with the provisions of article 76, the latter text t ogether
with resolutions registered in accordance with the provisions o f
sub-article (2) shall prevail.
Notwithstanding the provisions of sub-article (2), where the
alteration consists in a change in the registered office in Mal ta of
the company, the directors or company secretary shall send to t he
Registrar for registration a return of any change in the regist ered
office, specifying the date of the change, together with the ne w
registered office, within fourteen days from the happening ther eof.
(3) Any alteration or addition to the memorandum or articles of
a company shall not take effect, unless and until it is registe red as
provided in sub-article (2).
(4) The responsibility for ensuring that any proposed
amendments to the articles of association, if any, of a company , are
correct, complete and in full compliance with this Act and anyother applicable law shall lie with the directors of the said c ompany
(5) If default is made in complying with the provisions of sub-
article (2), every officer of the company who is in default sha ll be
liable to a penalty, and, for every day during which the defaul t
continues, to a further penalty.
Change of name of 
company.80. Where a company changes its name under the provisions of
article 79, the Registrar shall enter the new name on the regis ter in
place of the former name and shall issue a certificate of regis tration
altered to meet the circumstances of the case.
Alteration in 
memorandum or articles increasing liability to contribute to share capital not to bind existing members without consent.81. Notwithstanding anything in the memorandum or articles
of a company no member shall be bound by any alteration made inthe memorandum or articles after the date on which he became amember if and so far as the alteration requires him to subscrib e for
more shares than the number held  by him at the date on which th e
alteration is made, or in any way increases his liability as at  that
date to contribute to the share capital of, or otherwise pay mo ney
to, the company:
                    COMP ANIES              [CAP. 386.       45
Provided that this article shall not apply in any case where
the member agrees in writing, either before or after the altera tion is
made, to be bound thereby.
Authentication of 
documents.
Amended by:
XV . 2007.7;XX. 2013.77.82. (1) A document or proceeding requiring authentication by
a company may be signed by a director, the company secretary orother authorised officer of the company.
(2) All documents supplied to the Registrar shall be
authenticated in accordance with this article:
Provided that where documents are supplied to the
Registrar by electronic means, such documents may beauthenticated by a director, the company secretary, an authoris ed
officer of the company or by an individual specifically authori sed for
such purpose by the memorandum, or by a resolution of the board of
directors, or by an extraordinary resolution of the company.
Authentication of documents supplied to the Registrar by electr onic
means shall be made by an electronic signature duly recognised by
the Registrar.
Chapter II - Changes to a company’s share capital
Reduction of 
issued share capital.
Amended by:
XXIV . 1995.362;IV . 2003.46;L.N. 181 of 2006;L.N. 186 of 2006;IX. 2008.7.83. (1) Notwithstanding the provisions of article 79(3), where
the alteration consists in the reduction of the issued share ca pital,
any such reduction shall not take effect until three months fro m the
date of the publication of the statement referred to in article401(1)( e) relating to the resolution effecting such alteration:
Provided that if a creditor of the company whose debt
existed prior to the publication of the statement mentioned in this
sub-article objects thereto by sworn application filed within t he
period of three months reckoned as aforesaid and satisfies the Court
that due to the proposed reduction in the issued share capital the
satisfaction of his claims would be prejudiced and that no adeq uate
safeguards have been obtained from the company, the court shalleither uphold the objection or allow the reduction on sufficien t
security being given:
Provided further that a reduction in share capital shall be
void to the extent that it reduces the capital to less than theminimum prescribed by article 72.
(2) The Registrar of Courts shall without delay cause a copy of
any application filed under sub-article (1) and of any judgmentgiven thereon to be served on the Registrar for registration.
(3) The total or partial waiving of the unpaid part of the issue d
shares and the release of the holders of those shares from thei r
obligation to pay up that unpaid part shall, notwithstandinganything contained in the memorandum or articles of a company, in
all cases be considered as a reduction in share capital.
(4) Where there are different classes of shares the decision by
the general meeting concerning a reduction in the issued sharecapital shall be subject to a separate vote for each class of
 46        CAP. 386. ]                         COMP ANIES
shareholders whose rights are affected by the reduction, and fo r
every separate vote taken the same majority shall be required a s
where the shares are not divided into different classes.
(5) An alteration consisting in the reduction of the issued shar e
capital whose purpose is to offset losses incurred or to includ e
sums of money in a reserve shall take effect immediately on theregistration of the resolution concerning such a reduction and the
provisions of sub-article (1) relating to the rights granted tocreditors of the company shall not apply:
Provided that, following this operation, the amount of such
reserve is not more than ten per cent of the reduced issued sha re
capital: 
Provided further that any such reserve shall be used only
for offsetting losses incurred or for increasing the issued sha re
capital by the capitalisation of such reserve.
(6) In the cases referred to in sub-article (5) the amounts
deriving from the reduction of the issued share capital may not  be
used for making payments or distributions to shareholders or todischarge shareholders from the obligation to pay calls on thei r
shares:
Provided that if the provisions of sub-articles (1) and (2)
relating to the rights granted to the creditors of the company are
followed for the purpose of reducing any sum of money containedin any such reserve, as is referred to in sub-article (5), the amounts
deriving therefrom may be used for making payments ordistributions to shareholders.
(7) The notice convening the general meeting at which the
extraordinary resolution for the reduction of issued share capi tal is
to be taken, shall, in addition to the requirements laid down i n
article 135(1)( a), also specify the purpose of the reduction and the
way in which it is to be carried out.
Investment 
companies with variable share capital.
Amended by:
IV . 2003.47;
IX. 2003.84;IX. 2008.8;XVI. 2011.59.84. (1) A company may, by complying with the provisions of
this article, be formed as an investment company with variableshare capital.
(2) ( a) The memorandum of an investment company with
variable share capital shall, in respect of the sharecapital of the company, state in lieu of the mattersspecified in article  69(f) that - 
(i) the share capital of the company shall be equal
to the value for the time being of the issuedshare capital of the company; and
(ii) such share capital shall be divided into a
specified number of shares without assigningany nominal value thereto; and
(b) furthermore, the memorandum of the company shall
limit the object of the company to either one of thefollowing -
(i) the collective investment of its funds in
                    COMP ANIES              [CAP. 386.       47
securities and in other movable and immovable
property, or in any of them, with the aim ofspreading investment risk; and givingshareholders of the company the benefit of theresults of the management of its funds, and inthe fulfilment of that object, it shall be entitledto perform any act which is connected with orancillary thereto; or
Cap. 514.(ii) to act and operate as a retirement scheme or
retirement fund within the meaning of article 2of the 
Retirement Pensions Act; and
(c) the memorandum or articles of the company shall
provide - 
(i) that the actual value of the paid up share capital
of the company shall be at all times equal to thevalue of the assets of any kind of the companyafter the deduction of its liabilities; and
(ii) that the shares of the company shall be
purchased by the company directly or indirectlyout of the assets of the company, at the requestof any of the holders thereof or as otherwiseprovided by the memorandum or articles of thecompany.
(3) Action taken by a company to ensure that the value of its
shares as quoted on a regulated market or any equivalent market  in
a non-member State or non-EEA State does not deviate from its n et
asset value by more than a percentage specified in its articles ,
which deviation shall not be greater than five per cent, shall be
regarded as action taken for the purposes of sub-article (2)( c)(ii).
(4) An investment company with variable share capital shall
not issue partly paid up shares.
(5) The purchase by an investment company with variable
share capital of its own shares shall be on such terms and in s uch
manner as may be provided by its articles.
(6) Shares of an investment company with variable share
capital which have been purchased by the company itself shall b e
cancelled and the amount of the company’s issued share capitalshall be reduced by the amount of the consideration paid by thecompany for the purchase of the shares, and nothing in this Actshall require an investment company with variable share capital  to
create any reserve.
(7) Without prejudice to any requirements that may be imposed
on an investment company with variable share capital pursuant t o
any other enactment, the provisions of article 70(1) and (2), articles
72, 83, 85 to 88, 97, 103, 105 to 113, 115 and Chapter XI of Pa rt V
of this Act, shall not apply to such a company.
(8) Notwithstanding any other provision of this Act, an
investment company with variable share capital shall not beobliged to give any of the details in Parts 2 and 3 of the form  of
annual return set out in the Seventh Schedule, other than the s hare
 48        CAP. 386. ]                         COMP ANIES
capital of the company and the number of shares issued.
(9) Any reference in this Act to the nominal value of an issued
or allotted share in, or of the issued or allotted share capita l of, a
company shall be construed, in the case of an investment compan y
with variable share capital, as a reference to the net asset va lue.
Cap. 370.(10) The Minister, in consultation with the Minister responsible
under the Investment Services Act, acting on the advice of the
competent authority under the said Act, may make regulations fo r
the better carrying out of any of the provisions of this articl e; and
without prejudice to the generality of the foregoing may, by su ch
regulations, in particular:
(a) make further provision regarding the contents of the
memorandum and articles of the company, includingprovision for the issue of fractional shares;
(b) exempt or provide for the exemption of such company,
or any category thereof, from any of the provisions ofthis Act or of any other law in force, subject to suchmodifications, variations and conditions as may bespecified;
(c) provide for the constitution and regulation of
investment companies with variable share capital asumbrella or multi-class companies, and provide for theconstitution of sub-funds, and the different classes ofshares that may be issued by such companies; providefor the possibility of apportioning and allocating assetsand liabilities between the different sub-funds orclasses, for considering individual sub-funds or classesas separate and distinct entities for such purposes asmay be established, and provide for the currency orcurrencies in which such sub-funds or different classes
of shares may be designated;
Cap. 370.(d) apply and extend mutatis mutandis  the provisions of
this article to other forms of commercial partnershipswhich constitute collective investment schemes for thepurposes of the 
Investment Services Act and subject to
such variations or modifications as may be prescribed;
(e) provide for any matter incidental to or connected with
the above.
Cap. 514.(11) The Minister, in consultation with the Minister responsible
under the Retirement Pensions Act, acting on the advice of the
Malta Financial Services Authority, may make regulations to app ly
and extend mutatis mutandis  the provisions of this article to
investment companies with variable share capital established fo r
the purpose of acting and operating as a retirement scheme or aretirement fund within the meaning of article 2 of the 
Retirement
Pensions Act; and without prejudice to the generality of the
foregoing may, by such regulations, provide for any matter refe rred
to in the immediately preceding sub-article.
                    COMP ANIES              [CAP. 386.       49
Power to make 
regulations regarding cell companies.
Added by:
XVII. 1998.70.
Amended by:
IV . 2003.48;IX. 2008.9;XXXIII. 2015.104;V .2020.21.Cap. 403.84A. (1) The Minister, in consultation with the Minister
responsible for finance and acting on the advice of the  competent
authority under the Insurance Business Act, may make regulations
which provide for the formation, constitution, authorisation an d
regulation of cell companies, make it possible for a companyauthorised under the Insurance Business Act, to carry on busine ss
of insurance, or any other business as may be prescribed, to co nvert
into a cell company, and for all matters that may arise in conn ection
therewith; and for the better carrying out of the provisions of  this
article, and without prejudice to the generality of the foregoi ng,
may, by such regulations, in particular -
(a) make provision regarding the contents of the
memorandum and articles of association of a cellcompany, including provision for the creation by thecell company of any one or more cells, and forsegregating and protecting the cellular and other assetsof the company, and establish reporting and otherdisclosure requirements;
(b) exempt or provide for the exemption of such company
from any of the provisions of this Act or of any otherlaw in force, subject to such modifications, variationsand conditions as may be specified; and that in so far as
any of the provisions of such regulations are inconsistentwith the provisions of this Act or of any other law, suchprovisions in any such regulations shall prevail;
(c) make provision for the manner and the form whereby a
cell company may create and issue cell shares and tomake any provision relating to the assets of the cellcompany, including the requirement that the assets of acell company should be of a specified class ordescription, or any other requirements in respect of thequality, nature or extent of such assets;
(d) make provision allowing cells or the cellular assets
attributable to any cell of a cell company to betransferable to any other person;
(e) make provision for considering individual cells as
separate and distinct entities for such purposes as maybe established;
(f) provide for any matter consequential, incidental to or
connected with any of the above matters.
Cap. 403. (1A) Where any such regulations have been issued, the
competent authority as defined in the Insurance Business Act ma y
issue rules in terms of article 4 of the Insurance Business Act as
may be required for the better carrying out and to better imple ment
the provisions of any such regulations.
(2) For the purpose of this article -
 50        CAP. 386. ]                         COMP ANIES
Cap. 403.
Cap. 487.(a) "business of insurance" has the same meaning as
assigned to it in article 2(1) of the Insurance Business
Act and shall include the business carried on by a
captive insurance undertaking and captive reinsuranceundertaking in terms of the said Act, the business of aninsurance manager and the business of insurancebroking under the 
Insurance Distribution Act;
(b) "cell" means a cell created by a cell company for the
purpose of segregating and protecting the cellularassets of the company in such manner as may beprescribed and includes a reference to segregatedaccounts, compartments or units within a companyhaving multiple accounts, compartments or units, bywhatever name designated, and the word "cellular"shall be interpreted and applied accordingly;
(c) "cellular assets" of a cell company means the assets of
the company attributable to any cell of the company asmay be prescribed; and
(d) "cell company" is a company formed or constituted as
such or converted into a cell company and creatingwithin itself one or more cells for the purpose ofsegregating and protecting the cellular assets of thecompany in such manner as may be prescribed; and inrelation to the business of insurance manager, as wellas the business of insurance broking, reference to a"company" shall include reference to a partnership en
commandite  or similar or equivalent body corporate,
the capital of which is divided into shares.
Application of 
article 84(10)( c) to 
collective investment schemes.
Added by:
IV . 2003.49.Cap. 370.84B.  Nothing in article 84 shall be deemed to prohibit a
company, which is not a company with variable share capital butwhich qualifies as a collective investment scheme and is dulylicensed under the 
Investment Services Act, from being constituted
as an umbrella or multi-class company and the provisions of art icle
84(10)( c) shall apply mutatis mutandis to such company.
Minister may make 
regulations relating to securitisation vehicles.
Added by:
V . 2006.27.
Amended by:
V .2020.22.Cap. 484.84C. (1) The Minister, in consultation with the Minister
responsible for finance and acting on the advice of the compete nt
authority under the Securitisation Act, may make regulations which
provide for the formation, constitution, authorisation andregulation of cell companies, and which make it possible for asecuritisation vehicle to convert into a cell company and for a ll
matters that may arise in connection therewith.
(2) For the better carrying out of the provisions of this articl e,
and without prejudice to the generality of the foregoing, theMinister, acting as aforesaid, may, by such regulations, inparticular:
(a) make provision regarding the contents of the
memorandum and articles of association of a cellcompany, including provision for the creation by thecell company of any one or more cells, and forsegregating and protecting the cellular and other assetsof the company, and establish reporting and other
                    COMP ANIES              [CAP. 386.       51
disclosure requirements;
(b) exempt or provide for the exemption of such company
from any of the provisions of this Act or of any otherlaw in force, subject to such modifications, variationsand conditions as may be specified;
(bA)  provide for the applicability or inapplicability of any
provision of this Act or of any other law to matters fallingunder such regulations, subject to such modifications,variations and conditions as may be specified, and that inso far as any of the provisions of such regulations areinconsistent with the provisions of this Act or of anyother law, such provisions in any such regulations shallprevail;
(c) make provision for the manner and the form whereby a
cell company may create and issue cell shares and tomake any provision relating to the assets of the cellcompany, including the requirement that the assets of acell company should be of a specified class ordescription, or any other requirements in respect of thequality, nature and extent of such assets;
(d) make provision allowing cells or the cellular assets
attributable to any cell of a cell company to betransferable to any other person;
(e) make provision for considering individual cells as
separate and distinct entities for such purposes as maybe established;
(f) provide for any matter consequential, incidental to or
connected with any of the above matters.
Cap. 484.(2A) Where any such regulations have been issued in terms of
this article, the competent authority as defined in the Securit isation
Act may issue rules in terms of article 20 of the Securitisation Act
as may be required for the better carrying out and to betterimplement the provisions of any such regulations.
Cap. 484.(3) For the purposes of this article, "securitisation vehicle" h as
the same meaning assigned to it in the Securitisation Act.
Minister may make 
regulations relating to formation, etc., of incorporated cell companies and cells.
Added by:
XIX. 2010.30.Cap. 403.Cap. 370.84D. The Minister, in consultation with the Minister responsible
for finance and acting on the advice of the competent authorityunder the 
Insurance Business Act or the competent authority under
the Investment Services Act, may make regulations which provide
for the formation, constitution, authorisation and regulation o f
incorporated cell companies and incorporated cells as limitedliability companies with separate legal personality under this Act,
and which make it possible for such companies to carry on anyfinancial services business as may be prescribed, and for all m atters
ancillary thereto or that may arise in connection therewith.Regulations issued in terms of this article may also provide fo r the
applicability or inapplicability of, or the total or partial ex emption
from, any of the provisions of this Act or of any other law in force
to incorporated cell companies and incorporated cells subject t o
any modifications, variations or conditions as may be specified .
 52        CAP. 386. ]                         COMP ANIES
Power to make 
regulations regarding cell companies carrying on or engaged in shipping or aviation business.84E. (1) (a) The Minister may make regulations in order to:
(i) provide for the formation, constitution,
authorisation and regulation of cell companiescarrying on or engaged in shipping or aviationbusiness;
(ii) make it possible for a company carrying on or
engaged in shipping or aviation business to convertinto a cell company;
(iii) provide for all other matters that may arise in
connection therewith; and
(iv) provide for the better carrying out of the
provisions of this sub-article,
and, without prejudice to the generality of the foregoing, may ,  by
such regulations, in particular regulate the matters referred t o in
article 84A(1)(a) to (f), which shall apply also to this articl e.
(b) For the purposes of this article, the term "shipping or
aviation business" shall mean all or any of the following:
(i) the ownership, operation (under charter,
lease or otherwise), administration and management(including personnel engagement, employment ormanagement whether on board or otherwise) of any shipor of any aircraft or aircraft engine and the carrying on ofall ancillary financial, security , commercial and otheractivities in connection therewith; or
(ii) the holding of shares or other equity
interests in any undertaking, whether Maltese orotherwise, established solely or mainly for the carryingon or carrying out of any one or more of the activitiesreferred to in this definition and the carrying on of allancillary financial, security , commercial and otheractivities in connection therewith; or
(iii) the activities of a parent company which
holds shares or other equity interests in undertakings,whether Maltese or otherwise, where any one or some of
these undertakings is established solely or mainly for thecarrying on or carrying out o f any one or more of the
activities referred to in this definition and the carrying onof all ancillary financial, security, commercial and otheractivities in connection therewith; or
(iv) the raising of capital through loans, the
issue of guarantees or the issue of securities by anundertaking when the purpose of such activity is toachieve the objects or activities stated in the precedingsub-paragraphs for the undertaking itself or for anyother undertaking within the same group; or
                    COMP ANIES              [CAP. 386.       53
(v) the carrying on of such other objects or
activities within the maritime or the aviation sector andrelated or connected matters which the Minister may, onthe advice of the Authority, from time to timeprescribe by regulations.
For the purposes of this paragraph the terms "group", "parent
company" and "undertaking" shall have the same meaning as is gi ven
to them in article 2.
(c) For the purposes of this article the terms "cell",
"cellular assets" and "cell company" shall have the samemeaning, mutatis mutandis , as is given to them in terms of
article 84A(2):
Provided that for the purposes of this article
references to a "company" shall also include references to apartnership en commandite or similar or equivalent body
corporate, the capital of which is divided into shares.
(2) The Minister may furthermore make regulations which
provide for the formation, constitution, authorisation and regu lation of
incorporated cell companies and incorporated cells as limited l iability
companies with separate legal personality under this Act, and w hich
make it possible for such companies to carry on or be engaged i n
shipping or aviation business, and for all other matters relate d,
connected or ancillary thereto or that may arise in connectiontherewith.
(3) Regulations made in terms of this article may also provide
for the applicability or inapplicability of, or the total or pa rtial
exemption from, any of the provisions of this Act or of any oth er law
in force to incorporated cell companies and incorporated cells subject
to any modifications, variations or conditions as may be specif ied.
Increase in issued 
share capital and directors’ authority to issue shares.
Amended by:
IV . 2003.50;
XX. 2013.78.85. (1) Any increase in the issued share capital of a company
shall be decided upon by an ordinary resolution of the company,unless the memorandum or articles require a higher percentage t han
that required for an ordinary resolution by article  135(2):
Provided that the memorandum or articles, or an
extraordinary resolution of a company may permit either:
(a) the board of directors to issue shares up to a maximum
amount as may be specified in the same memorandumor articles, or extraordinary resolution, whichpermission shall be for a maximum period of fiveyears, renewable by ordinary resolution for furthermaximum periods of five years each; or
(b) the general meeting to authorise by ordinary resolution
the board of directors to issue shares up to a maximumamount as may specified in the same memorandum orarticles, or in the extraordinary resolution, which
 54        CAP. 386. ]                         COMP ANIES
permission shall be for a maximum period of five years,
renewable by ordinary resolution for further maximumperiods of five years each.
(2) Where there are several classes of shares, any resolution
referred to in sub-article (1) shall be subject to a separate v ote for each
class of shareholders whose rights are affected by such resolut ion, and
the provisions relating to the majority required for the resolu tion shall
apply for each class.
(3) A copy of any such ordinary or extraordinary resolution
referred to in sub-articles (1) and (2) shall be delivered to t he
Registrar for registration, within fourteen days after the date  of the
relative resolution, failing which every officer of the company  who
is in default shall be liable to a penalty, and for every day d uring
which the default continues, to a further penalty.
(4) The provisions of sub-articles (1) to (3) shall apply to the
issue of all securities which are convertible into shares or wh ich
carry the right to subscribe for shares, but not to the convers ion of
such securities, nor to the exercise of the right to subscribe.
(5) Where an increase in the issued share capital is not fully
taken up, that issue shall be deemed not to have taken effect:
Provided that if the conditions of the issue so provide, the
issued share capital shall be increased by the amount of subscr iptions
received.
Amount paid up on 
allotment of shares in a public company.86. Shares shall be paid up on allotment to at least twenty-five
per cent of their nominal value in the case of a public company .
Amount paid up on 
allotment of shares in a private company.87. Shares shall be paid up on allotment to at least twenty per
cent of their nominal value in the case of a private company.
Offering of shares 
on a pre-emptive 
basis on issue.
Amended by:
IV . 2003.51;XIII. 2004.98;XI. 2017.4.88. (1) Whenever shares of a public company are proposed to
be allotted for consideration in cash, those shares shall be of fered
on a pre-emptive basis to shareholders in proportion to the sha re
capital held by them:
Provided that shares in a company, whether public or
private, shall not be offered on a pre-emptive basis to the com pany
itself, notwithstanding any other provision of this Act empower ing
the company to hold its own shares.
(2) Where the issued share capital of a company as referred to
in sub-article (1) having several classes of shares carrying di fferent
rights with regard to voting, or participation in distributions , or
sharing in assets in the event of a winding up, is increased byissuing new shares for allotment in only one of these classes, the
right of pre-emption of shareholders of the other classes is to  be
exercised only after the exercise of this right by the sharehol ders of
the class in which the new shares issued are to be allotted.
(3) A copy of any offer of subscription on a pre-emptive basis
indicating the period within which this right shall be exercise d
shall be delivered to the Registrar for registration:
                    COMP ANIES              [CAP. 386.       55
Provided that such registration shall not be required as long
as all the shareholders of the company are informed in writing of
the offer of subscription on a pre-emptive basis and of the per iod
within which this right shall be exercised.
(4) The right of pre-emption referred to in sub-article (3) shal l
be exercised within a period of not less than fourteen days fro m the
date of publication of the offer in the Gazette or on a websitemaintained by the Registrar in accordance with article 401(1)( e), or
from the date of dispatch of the letters to the shareholders re ferred
to in the same sub-article.
(5) The right of pre-emption shall not be restricted or
withdrawn by the memorandum or articles:
Provided that, for a particular allotment as referred to in
this article, the right of pre-emption may be restricted or wit hdrawn
by extraordinary resolution of the general meeting. In such cas e the
Board of directors shall be required to present to that generalmeeting a written report indicating the reasons for restriction  or
withdrawal of the right of pre-emption and justifying the propo sed
issue price.
(6) A copy of the resolution referred to in sub-article (5), sha ll
be delivered by the directors or by the company secretary to th e
Registrar for registration.
(7) The memorandum or articles or an extraordinary resolution
of the general meeting may authorise the Board of directors torestrict or withdraw the right of pre-emption if the Board isauthorised to issue shares in accordance with article 85 and fo r as
long as the Board remains so authorised.
(8) A copy of the resolution referred to in sub-article (7) shal l
be delivered to the Registrar for registration.
(9) The provisions of sub-articles (1) to (8) shall apply to the
issue of all securities which are convertible into shares or wh ich
carry the right to subscribe for shares, but not to the convers ion of
such securities, nor to the exercise of the right to subscribe.
(10) The right of pre-emption shall not be excluded for the
purposes of sub-articles (5) to (8) where, in accordance with t he
decision to allot shares, shares are issued to banks or financi al
institutions with a view to their being offered to shareholders  of the
company in accordance with sub-article (1).
(11) If default is made in complying with sub-articles (6) or (8 ),
every officer of the company who is in default shall be liable to a
penalty, and, for every day during which the default continues,  to a
further penalty.
Chapter III - Capital issues by public companies
 56        CAP. 386. ]                         COMP ANIES
Issue of 
applications for shares in or debentures of a public company to be made with a prospectus.
Amended by:
IV . 2003.52;L.N. 391 of 2005;IX. 2008.10;L.N. 338 of 2012;XX. 2013.79.89. It shall not be lawful for a public company to issue any
form of application for its shares or debentures unless the com pany
is registered and the form is issued with a prospectus whichcomplies with the requirements of article 90:
Provided that the provisions of this Chapter, including the
obligation to draw up a prospectus, shall not apply to a form o f
application issued - 
(a) in connection with a bona fide  invitation to a person to
enter into an underwriting agreement with respect tothe shares or debentures; or
(b) in relation to securities which do not constitute an
"offer of securities to the public" within the meaningof article 2(3); or
Cap. 370.(c) by a holder of a collective investment scheme licence
within the meaning of the Investment Services Act
provided such issue is made in accordance with rulesor regulations made under that Act; or
(d) in relation to dividends paid out to existing shareholders
in the form of shares of the same class as the shares inrespect of which such dividends are paid provided that adocument is made available containing information onthe number and nature of the shares and the reasons forand details of the offer; or
(e) in connection with an offer where securities are allotted
to existing or former directors or employees by theiremployer or by an affiliated undertaking provided thatthe company has its head office or registered office in the
Community and provided that a document is madeavailable containing information on the number andnature of the securities and the reasons for and details ofthe offer; or
(f) in relation to shares issued on the redemption or
reduction of shares of the same class already issued, ifthe issuing of such new shares does not involve anyincrease in the issued capital; or
(g) in relation to an offer made in connection with a take-
over bid, provided that a document is availablecontaining information which is regarded by theRegistrar as being equivalent to that of the prospectus;or
(h) in relation to an offer made in connection with or
pursuant to a proposed merger or division, provided thata document is available containing information which isregarded by the Registrar as being equivalent to that ofthe prospectus:
Provided further that paragraph ( e) shall also apply to a
company established outside the European Union and the EEA andwhose securities are admitted to trading either on a regulated market
or on a third country market. In the latter case, the exemption  shall
apply provided that adequate information, including the documen t
                    COMP ANIES              [CAP. 386.       57
referred to in paragraph ( e), is available in English provided that
the European Commission has adopted an equivalence decisionregarding the third-country market concerned.
Dating of 
prospectus and matters to be stated therein.
Amended by:
L.N. 391 of 2005.90. (1) Every prospectus shall be dated and shall state the
matters specified in Part A of the Second Schedule.
(2) A condition requiring or binding an applicant for shares or
debentures to waive compliance with any requirement of thisarticle or purporting to effect him with notice of any contract ,
document or matter not specifically referred to in the prospect us
shall be void.
Penalty.
Amended by:
L.N. 391 of 2005.91. Any person responsible for the issue, circulation or
distribution of a prospectus or for the issue of a form of appl ication
for shares or debentures, in contravention of any of the provis ions
of article 89 or of article 90(1) shall be liable to a penalty:
Provided that a director or other person responsible for the
prospectus shall not incur liability if - 
(a) as regards any matter not disclosed he proves that he
was not cognizant thereof; or
(b) he proves that the contravention arose from an honest
mistake of fact on his part; or
(c) the contravention was in respect of matters which, in
the opinion of the court, were immaterial or otherwisesuch as ought, having regard to all the circumstancesof the case, reasonably to be excused.
Prospectus 
including a statement by experts.92. (1) A prospectus including a statement purporting to be
made by an expert shall not be issued unless - 
(a) the expert has given and has not, before delivery of a
copy of the prospectus for registration, withdrawn hiswritten consent to the issue thereof; and
(b) a statement that he has given and has not withdrawn
his consent as aforesaid appears in the prospectus.
(2) If any prospectus is issued in contravention of the
provisions of this article, every person who is knowingly a par ty to
the issue thereof shall be liable to a penalty.
Registration of 
prospectus.
Amended by:
L.N. 391 of 2005.93. (1) No prospectus shall be issued unless, on or before the
date of its publication as specified in article 99, a copy ther eof,
signed by every person named therein as a director of the compa ny
or his agent authorised in writing, has been delivered to theRegistrar. Upon being satisfied that the requirements of thisChapter and Part A of the Second Schedule have been compliedwith, the Registrar shall register it. Such prospectus must hav e
endorsed thereon or attached thereto any consent to the issue o f the
prospectus required by article 92 from any person as an expert.
(2) If a prospectus is issued in contravention of this article,
every person who is knowingly a party to the issue of theprospectus shall be liable to a penalty, and, for every day fro m the
 58        CAP. 386. ]                         COMP ANIES
date of the issue of the prospectus until a copy thereof is del ivered
as aforesaid with the required documents endorsed thereon orattached thereto, to a further penalty.
Civil liability for 
misstatements in prospectus.
Amended by:
L.N. 391 of 2005;L.N. 338 of 2012.94. (1) The persons who are responsible for or who have
authorised the issue of a prospectus shall be jointly and sever ally
liable for any damage sustained by a person subscribing for sha res
or debentures on the faith of that prospectus, by reason of anyuntrue statement included therein:
Provided that a person who has given the consent required
by article 92 shall not be liable as a person who has authorise d the
issue of a prospectus except in respect of an untrue statement made
by him as an expert.
(2) No person shall be liable under this article if - 
(a) he proves that he had reasonable grounds to believe
and did, up to the time of the allotment of the shares ordebentures believe, that the statement was true; or
(b) he proves, as regards an untrue statement made by an
expert, that he had reasonable grounds to believe anddid, up to the time of the allotment of the shares ordebentures believe, that the person making thestatement was competent to make it; or
(c) on becoming aware of the untrue statement before any
allotment is made under the prospectus, he gavereasonable public notice of the untruthfulness of thestatement.
(3) No person shall be liable for statements made in the summary
referred to in Part A of the Second Schedule, including the tra nslation
thereof, except when such statements are misleading, inaccurate  or
inconsistent, when read together with the other parts of the pr ospectus,
or if it does not provide, when read together with the other pa rts of the
prospectus, key information in order to aid investors when cons idering
whether to invest in such securities. The summary shall contain  a clear
warning to that effect.
Document 
containing offer of shares or debentures for sale to be deemed prospectus.
Amended by:
IV . 2003.53.95. (1) Where a company allots or agrees to allot any shares in
or debentures of the company with a view to all or any of thoseshares or debentures being offered for sale to the public, anydocument by which the offer for sale to the public is made shal l for
all purposes be deemed to be a prospectus and all the rules rel ating
to prospectuses shall apply and have effect accordingly.
(2) It shall be presumed, unless the contrary is proved, that th e
allotment or agreement to allot was made with a view to the sha res
or debentures being offered for sale to the public if it is sho wn - 
(a) that an offer for sale to the public was made within six
months after the allotment; or agreement to allot; or
(b) that at the date when the offer was made the whole
consideration to be received by the public company inrespect of the shares or debentures had not been soreceived.
                    COMP ANIES              [CAP. 386.       59
(3) The provisions of article 93 as applied by this article shal l
have effect - 
(a) as if that article further required a prospectus to have
attached thereto a copy of any contract under whichthe said shares or debentures have been or are to beallotted or, in the case of a contract not reduced inwriting, a memorandum giving full particulars thereof;and
(b) as though the persons making the offer were persons
named in the prospectus as directors of a company.
Interpretation of 
provisions relating to prospectus.
Amended by:
L.N. 391 of 2005.96. (1) For the purposes of the provisions of articles 89 to 95 - 
(a) a statement included in a prospectus shall be deemed
to be untrue if it is misleading in the form and contextin which it is included or otherwise inaccurate orinconsistent; and
(b) a statement shall be deemed to be included in a
prospectus if it is contained therein or in any documentappearing on the face thereof or by referenceincorporated therein or issued therewith.
(2) In this Chapter the term "expert" includes engineer, valuer,
accountant and any other person whose profession gives authorit y
to a statement made by him.
Offer of securities 
to the public in third countries.
Added by:
V .2020.29.96A.  (1) Where a public company makes an offer of securities
to the public in a third country, its directors shall, within o ne month
of the registration of the issued securities with the company, deliver
to the Registrar for registration a notice specifying the follo wing
information, together with a copy of the offering document, if any:
(a) the country or countries where the offer is made;
(b) the purpose of the offer;
(c) the amount of the offer;
(d) the type of securities offered;
(e) the name of the authority or other body in the
third country which was responsible for the approval of theoffering document, if any.
(2) In default of complying with the provisions of sub-article
(1), every officer of the company who is in default shall be li able to a
penalty, and for every day during which the default continues, to a
further penalty.
(3) It shall be the responsibility of the issuer and the directo rs of
the company to comply with the laws and regulations of the thir d
country in which the securities are offered to the public.
(4) For the purpose of this article:
 60        CAP. 386. ]                         COMP ANIES
(a) "an offer of securities to the public in a third country"
shall mean an offer of securities in such third country:
(i) to more than one hundred and fifty
persons; or
(ii) where the total consideration of the offer
exceeds one hundred thousand euro (€100,000),calculated over a period of twelve months;
(b) "offering document" includes a prospectus or other
invitation to acquire securities.
Chapter IV -Allotment of shares and debentures of companies
No allotment 
unless minimum subscription received.97. (1) No allotment shall be made of any share capital of a
public company offered to the public for subscription - 
(a) unless there has been subscribed and paid in cash the
amount stated in the prospectus as the minimumamount which, in the opinion of the directors, shall beraised by the issue of share capital in order to providefor the preliminary expenses, purchase of property andworking capital as specified in the prospectus; and
(b) unless the capital is subscribed in full, whether or not
in cash, or the conditions stated in the offer forallotment, where the offer is not fully subscribed, aresatisfied.
(2) If the conditions referred to in sub-article (1) have not be en
complied with on the expiration of forty days after the issue o f the
prospectus, all money received from applicants for shares shall  be
forthwith repaid to them without interest.
(3) If any of the money is not repaid within forty-eight days
after the issue of the prospectus, the directors of the company  shall
be jointly and severally liable to repay it with annual interes t at the
rate of two percentage points over the Central Bank of Maltaminimum discount rate from the expiration of the fortieth day;except that a director shall not be so liable if he proves that  the
default in the repayment of the money was not due to anymisconduct or negligence on his part.
(4) Any condition requiring or binding an applicant for shares
to waive compliance with any requirement of this article shall be
void.
(5) All money received from applicants in pursuance of the
prospectus shall remain the property of the applicants until su ch
time as the allotment is made in an irrevocable manner and shal l
not be available for the satisfaction of any debts of the compa ny.
Such money shall be kept in a separate bank account so long as the
company may become liable to repay it under sub-article (2); an d if
default is made in complying with this sub-article, the company  and
every officer of it who is in default shall be liable to a pena lty, and,
                    COMP ANIES              [CAP. 386.       61
for every day during which the default continues, to a further
penalty.
Effect of irregular 
allotment.
Amended by:
L.N. 181 of 2006;L.N. 186 of 200698. (1) An allotment made by a company in contravention of
article 97 shall be voidable at the instance of the applicant f or
shares referred to in the same article by sworn application fil ed
within one month after the date of the allotment:
Provided that the proceedings may be commenced even if
the company has been dissolved and is being wound up.
(2) If a director knowingly contravenes or permits or authorises
the contravention of article 97, he shall be liable to compensa te the
company and the allottee respectively for any loss, damages orcosts which the company or the allottee may have sustained orincurred by the contravention:
Provided that proceedings to recover any such loss,
damages or costs shall only be commenced by sworn applicationwithin two years from the date of allotment.
Time of the 
opening of the subscription lists.
Amended by:
L.N. 391 of 2005.99. (1) No allotment shall be made of any shares in or
debentures of a public company in pursuance of a prospectus andno proceedings shall be taken on applications made in pursuance  of
a prospectus until at least the beginning of the sixth working day or
such later time, if any, as may be specified in the prospectus,  after
the publication in a daily newspaper circulating wholly or main ly in
Malta of a notice stating that a prospectus has been issued,indicating therein where the issuer or offeror has made availab le,
free of charge, a paper copy of the full prospectus.
(2) The beginning of the said sixth working day or such later
time as aforesaid is hereinafter in this Act referred to as "th e time
for the opening of the subscription lists".
(3) In the application of this article to a prospectus offering
shares or debentures for sale, sub-articles (1) and (2) shall h ave
effect with the substitution of references to sale for referenc es to
allotment.
Revocability of 
application for shares or debentures.100.  An application for shares in or debentures of a public
company which is in pursuance of a prospectus shall not berevocable until after the expiration of the third working day a fter
the time of the opening of the subscription lists, or the givin g,
before the expiration of the said third working day, by some pe rson
responsible under article 94 for the prospectus, of a public no tice
having the effect under that article of excluding the responsib ility
of the person giving it.
Allotment of 
shares, etc., to be dealt in on stock exchange.
Amended by:
IV . 2003.54;IX. 2008.11.101. (1) The following provisions of this article shall apply
where a prospectus issued by or on behalf of a public companystates that application has been or will be made for permission  for
the shares or debentures offered by it to be listed on a regula ted
market or on an equivalent market in a non-Member State or non-EEA State.
(2) An allotment made on an application in pursuance of the
prospectus shall, whenever made, be void if the permission has not
been applied for before the third working day after the first i ssue of
 62        CAP. 386. ]                         COMP ANIES
the prospectus or if the permission has been refused before the
expiration of twenty-one days from the date of the closing of t he
subscription lists or such longer period, not exceeding forty-t wo
days, as may be notified by or on behalf of the regulated marke t or
the equivalent market in a non-Member State or non-EEA State tothe applicant for permission, within those twenty-one days.
(3) Where permission has not been applied for as required by
sub-articles (1) and (2), or has been refused, the company shal l
forthwith repay, without interest, all money received fromapplicants in pursuance of the prospectus.
(4) If any of the money is not repaid within eight days after th e
company becomes liable to repay it, the directors of the compan y
shall be jointly and severally liable to repay the money with a nnual
interest at the rate of two perc entage points over the Central Bank
of Malta minimum discount rate from the day the companybecomes liable to repay it, except that a director shall not be  liable
if he proves that the default in the repayment of the money was  not
due to any misconduct or negligence on his part.
(5) All money received from applicants in pursuance of the
prospectus shall remain the property of the applicants until su ch
time as the allotment is made in an irrevocable manner and shal l
not be available for the satisfaction of any debts of the compa ny.
Such money shall be kept in a separate bank account so long as the
company may become liable to repay it under sub-article (3): and if
default is made in complying with this sub-article, the company  and
every officer of it who is in default shall be liable to a pena lty, and,
for every day during which the default continues, to a furtherpenalty.
(6) Any condition requiring or binding an applicant for shares
or debentures to waive compliance with any requirement of thisarticle shall be void.
(7) For the purposes of this article, permission shall not be
deemed to be refused if it is intimated that the application fo r it,
though not at present granted, will be given further considerat ion.
(8) The provisions of this article shall have effect in relation  to
shares or debentures agreed to be taken by a person underwritin g an
offer of them by a prospectus as if he had applied for them inpursuance of the prospectus.
Operation of article 
101 where prospectus offers shares for sale.102. (1) The provisions of article 101, other than sub-article
(4) thereof, shall apply to a prospectus offering shares for sa le,
otherwise than by allotment, subject to the following provision s of
this article.
(2) Sub-articles (1) and (2) of article 101 shall apply, as though
the reference in the said sub-article (2) of article 101 to all otment
were a reference to sale.
(3) Sub-article (3) of article 101 shall apply as though the
reference therein to company were a reference to the offeror. 
(4) If any of the money is not repaid within eight days after th e
offeror becomes liable to repay it, he shall become liable to p ay
                    COMP ANIES              [CAP. 386.       63
annual interest on the money due, at the rate of two percentage
points over the Central Bank of Malta minimum discount rate fro m
the end of the eighth day.
(5) Sub-articles (5) to (8) of article 101 shall apply, except that
in sub-article (5) thereof -
(a) the first reference to the company shall be construed as
a reference to the offeror; and
(b) the reference to the company and every officer of the
company who is in default shall be construed as areference to any person by or through whom the offeris made and who knowingly and wilfully authorises orpermits the default.
Return as to 
allotments.103. (1) Whenever a company makes any allotment of its
shares, the company shall, within one month thereafter, deliver  to
the Registrar for registration -
(a) a return of the allotments stating the number and the
nominal amount of the shares comprised in theallotment, the names and addresses of the allottees andthe amount paid and that due, and payable, on eachshare, whether on account of the nominal value of theshare or by way of premiums; and
(b) in the case of shares allotted as fully or partly paid up
otherwise than in cash, a contract in writing or, wherethe contract is not reduced to writing, a documentcontaining the particulars of the contract, constitutingthe title of the allottee to the allotment, together withany contract of sale, or for services rendered or otherconsideration in respect of which the allotment wasmade, and a return stating the number and nominalvalue of shares so allotted, the extent to which they areto be treated as paid up, and the consideration forwhich they have been allotted; and
(c) where applicable, a declaration that the requirements
of article 97 have been complied with.
(2) If default is made in complying with the provisions of this
article, every officer of the company who is in default shall b e
liable to a penalty, and, for every day during which the defaul t
continues, to a further penalty.
Chapter V - Maintenance of share capital and protection of 
class rights
Duty of directors 
on serious loss of capital.104. (1) Where the net assets of a public company are half or
less of its called-up issued share capital, the directors shall , not
later than thirty days from the earliest day on which that fact  is
known to any director of the company, duly convene a generalmeeting of the company by means of a notice to that effect for a
date not later than forty days from the date of the notice for the
purpose of considering whether any, and if so, what steps shoul d be
 64        CAP. 386. ]                         COMP ANIES
taken to deal with the situation, including consideration as to
whether the company should be dissolved.
In this sub-article, "net assets" shall have the same meaning
assigned to it under article  193(2).
(2) In a meeting convened in pursuance of sub-article (1), only
the steps mentioned in the said sub-article may be considered.
(3) If a general meeting as required by sub-article (1) is not
convened, each of the directors of the company in default shall  be
liable to a penalty, and, for every day during which the defaul t
continues, to a further penalty.
Company may not 
subscribe for its own shares.105. (1) A company shall not subscribe for any of its own
shares, whether on original subscription or on any subsequentsubscription, and if any of its shares have been subscribed for  by a
person acting in his own name but on behalf of the company thesubscriber shall be deemed to have subscribed for them for his own
account.
(2) On the registration of a company, the subscribers to the
memorandum shall be jointly and severally liable to pay for theshares subscribed in contravention of sub-article (1).
(3) In the case of an increase in the issued share capital, the
members and directors shall be liable jointly and severally to pay
for the shares subscribed in contravention of sub-article (1)provided that any member or director may be released from suchliability if he proves that the breach occurred through no faul t of
his own.
Conditions in 
which a company may acquire its own shares.
Amended by:
IX. 2008.12;XX. 2013.80.Cap. 476.106. (1) Without prejudice to the principle of equal treatment
of the shareholders who enjoy the same rights in respect of theshares held by them and to any relevant provisions of the
Prevention of Financial Markets Abuse Act, a company may
acquire any of its own shares otherwise than by subscription,provided all the following conditions are respected -
(a) provision is made by the memorandum or articles of
the company for authorising the acquisition by thecompany of its own shares;
(b) authorisation is given by an extraordinary resolution,
which resolution shall determine the terms andconditions of such acquisitions and in particular themaximum number of shares to be acquired, theduration of the period for which the authorisation isgiven and which may not exceed eighteen months and,in the case of acquisition for valuable consideration,the maximum and minimum consideration;
(c) the provisions of article 135 shall apply in respect of
the extraordinary resolution referred to in paragraph(b) above subject however to the condition that shares
already held by the company itself shall be treated ascarrying no voting rights;
(d) the nominal value of the acquired shares, including
                    COMP ANIES              [CAP. 386.       65
shares previously acquired by the company and held
by it shall not exceed fifty per cent of the issued sharecapital;
(e) no acquisitions by a company of its own shares shall
be made when on the closing date of the lastaccounting period the net assets as set out in thecompany’s annual accounts are, or following suchdistribution, would become lower than the amount ofcalled up issued share capital plus those reserveswhich may not be distributed under the provisions ofthis Act or the company’s memorandum or articles;and in any case it shall not be possible for the companyto acquire any of its own shares except out of theproceeds of a fresh issue of shares made specificallyfor the purpose, or out of profits available fordistribution;
(f) the shares acquired shall be fully paid up shares; and 
(g) a company may not as a result of the acquisition of any
of its shares become the only holder of its ordinaryshares.
(2) The company shall deliver to the Registrar for registration a
copy of the resolution mentioned in sub-article (1). If default  is
made in complying with the provisions of this sub-article, ever y
officer of the company who is in default shall be liable to a p enalty,
and, for every day during which the default continues, to a fur ther
penalty.
(3) The provisions of sub-article (1)( b) shall not apply where
the acquisition of a company’s own shares is necessary to preve nt
serious and imminent harm to the company.
(4) The provisions of sub-article (1)( b) shall furthermore not
apply to shares acquired either by the company itself or by a p erson
acting in his own name but on the company’s behalf for distribu tion
to that company’s employees or to the employees of its parentcompany or of any of its subsidiary undertakings. Such shares s hall
be distributed within one year of their acquisition.
(5) References in this article and in articles 107 to 110 to a
company holding, acquiring or otherwise dealing in its own shar es
shall be deemed to include references to the company so doingeither itself or through a person acting in his own name but on  the
company’s behalf.
Acquisition of own 
shares by a company without application of article 106.
Amended by:
IV . 2003.55;XX. 2013.81.107. (1) A company may acquire any of its own shares
otherwise than by subscription without complying with theprovisions of article 106, other than sub-article (1)( g) thereof,
where the shares are -
(a) acquired by the company in the course of a reduction
of the issued share capital made in accordance witharticle 83; or
(b) the subject of an application which is revoked in
accordance with the provisions of article 100; or
 66        CAP. 386. ]                         COMP ANIES
(c) forfeited or surrendered in accordance with the
provisions of article 112; or
(d) acquired in any procedure for the conversion, the
amalgamation or the division of companies pursuant tothe provisions contained in Part VII, Part VIII and PartIX, respectively, of this Act; or
(e) acquired in any procedure for the change of status of a
company pursuant to the provisions of article 213; or 
(f) acquired by the company pursuant to an order of the
court made under the provisions of this Act for the re-purchase of shares held by dissenting shareholders,including any order made in terms of article 402(3)( d);
or
(g) fully paid up and acquired by an investment company
with fixed share capital or by another companyforming part of the same group at the member’srequest provided that such acquisitions shall not havethe effect of reducing the company’s net assets belowthe amount of the issued share capital plus anyreserves the distribution of which is forbidden by law;
(h) acquired by the company during a redemption of
preference shares in accordance with article 115.
(2) Where shares acquired pursuant to sub-article (1)( b) to ( f)
are retained by the company and are not disposed of within thir ty
months of their acquisition the company shall by extraordinaryresolution cancel such shares within six months of the expiry o f the
said thirty months.
(3) The provisions of article 83 dealing with the reduction of
issued share capital shall apply where shares are cancelled pur suant
to sub-article (2):
Provided that the court may not disallow the cancellation
but, if good cause is shown, it shall only order that sufficien t
security be given to the creditor who had objected to thecancellation, and if sufficient security is not immediately ava ilable,
the court shall order the provision of such security immediatel y it
becomes available to the company and no distribution of dividen d
may be effected by the company in the meantime:
Provided further that this sub-article shall not apply where th e
company has acquired the shares otherwise than for valuableconsideration.
(4) If the company fails to comply with sub-article (2) within
the time limit prescribed, any member or director of the compan y
may apply to the court for an order that such shares be cancell ed.
(5) Where the nominal value of the shares held by the company
in pursuance of any of the provisions of sub-article (1), inclu ding
shares which the company may have acquired through a personacting in his own name but on behalf of the company, does notexceed ten per cent of the issued share capital thereof, theprovisions of sub-articles (2) to (4) shall not apply.
                    COMP ANIES              [CAP. 386.       67
Shares acquired or 
held in contravention of articles 106 and 107.108. (1) If shares acquired or held in contravention of article
106 and of article 107(1) are not disposed of within one year o f
their acquisition, the company shall cancel such shares within six
months of the expiry of the said year.
(2) Where shares are cancelled pursuant to sub-article (1) the
provisions of article 83 shall apply subject to the proviso to article
107(3).
(3) If the company fails to comply with sub-article (1) within
the time limit prescribed, any member or director of the compan y
may apply to the court for an order that such shares be cancell ed.
Conditions for 
acquisition by a company of its own shares where permitted by law.
Amended by:
IV . 2003.56.109. During the time that a company holds any of its own
shares -
(a) they shall carry no voting rights notwithstanding any
provisions to the contrary in the company’smemorandum or articles; and
(b) if the shares are included among the assets of the
company shown in the balance sheet, a reserve of thesame amount, unavailable for distribution, shall beincluded among the reserves. 
Undertaking may 
not subscribe for or acquire shares in its parent company or provide financial assistance for the purchase of, or subscription for, its own or its parent company’s shares.
Amended by:
IV . 2003.57;IX. 2008.13.110. (1) It shall not be lawful for an undertaking -
(a) to subscribe for, hold, acquire or otherwise deal in
shares in a company which is its parent company; or
(b) to give, whether directly or indirectly, and whether by
means of a loan, guarantee, the provision of security orotherwise, any financial assistance for the purpose ofan acquisition or subscription made or to be made byany person of or for any shares in the company or itsparent company.
(2) The provisions of sub-article (1) shall not apply to
transactions effected with a view to the acquisition of shares by or
for the company’s employees or the employees of a groupcompany:
Provided that such transactions shall not have the effect of
reducing the net assets of the company below the amount specifi ed
in article 106(1)( e).
(3) Sub-article (1) shall not apply to the provision of financia l
assistance by an investment company with fixed share capital fo r
the purpose of or in connection with the acquisition of its ful ly paid
up shares by another undertaking:
Provided that such provision of financial assistance may
not have the effect of reducing the net assets of the company b elow
the amount specified in article 106(1)( e).
(4) The provisions of sub-article (1)( b) shall not apply if the
company granting the financial assistance is a private company and
the following requirements are fulfilled:
(a) the Board of Directors has, after taking into account
the financial position of the company and the
 68        CAP. 386. ]                         COMP ANIES
obligations of the directors as set out in article 136A,
resolved by the affirmative vote of a majority of all thedirectors forming the Board at the time of theparticular resolution, to authorize the grant of financialassistance for a specific transaction;
(b) an extraordinary resolution has been passed affirming
the resolution taken pursuant to paragraph ( a); and
(c) a declaration in the prescribed form signed by two
directors confirming that the requirements set out inparagraphs ( a) and ( b) have been satisfied is duly filed
with the Registrar prior to the granting of the financialassistance, and the signature of one director shallsuffice where the Board is composed of only onedirector.
Effect of 
acceptance of a company’s own shares as security.111.  The acceptance of a company’s own shares by way of
pledge or other form of security shall be treated as an acquisi tion
by the company of such shares for the purposes of articles 106,  107
and 109.
Forfeiture or 
surrender of shares.112. (1) Any share in a company may be forfeited from any
shareholder in favour of the company and any shareholder maysurrender any or all of his shares in a company in favour of th at
company if the shareholder fails  to pay any call or instalment of a
call on the day appointed for payment thereof and as long asprovision to that effect is contained in the memorandum or arti cles
of the company.
(2) The provisions of article 109 shall apply to a forfeiture or
surrender of shares until such time as the company disposes of or
otherwise cancels them.
Conditions for 
payment of commissions, discounts, etc.
Amended by:
IV . 2003.58113. (1) It shall be lawful for a company to pay a commission
or make a discount or allowance to any person in consideration for
his subscribing or agreeing to subscribe, whether absolutely orconditionally for any shares in the company, or procuring oragreeing to procure subscriptions, whether absolute or conditio nal,
for any shares in the company, provided that -
(a) authority therefor is given by the memorandum or
articles; and
(b) the commission, discount or allowance does not
exceed ten per cent of the price at which the shares areissued or the amount authorised by the memorandumor articles, whichever is the less; and
(c) the amount or rate per cent of the commission,
discount or allowance and the number of shares whichpersons have agreed in consideration thereof tosubscribe absolutely shall be disclosed in the mannerrequired by sub-article (3): and
(d) in no event may the value of such shares be reduced to
below their nominal value as a result of the payment ofsuch commission, discount or allowance.
                    COMP ANIES              [CAP. 386.       69
(2) If shares are issued in contravention of the provisions of
this article the holder thereof shall be bound to pay the compa ny an
amount equal to the amount of the commission, discount orallowance given in excess of that permitted by this article, wi th
annual interest at the rate of two percentage points over the C entral
Bank of Malta minimum discount rate.
(3) The conditions specified in sub-article (1) shall, in the ca se
of shares offered to the public for subscription, be disclosed in the
prospectus and in the case of shares not so offered -
(a) they shall be disclosed in a statement signed by every
director of the company or by any other person inrepresentation of any director so authorised in writingand delivered to the Registrar for registration beforethe actual payment of the commission, discount orallowance; and
(b) where a circular or notice, not being a prospectus,
giving subscription for the shares is issued, they shallalso be disclosed in such circular or notice.
(4) If default is made in complying with sub-article (3)( a),
every officer of the company who is in default shall be liable to a
penalty.
Application of 
premium received on issue of shares.114. (1) Where a company issues shares at a premium whether
for cash or otherwise, a sum equal to the aggregate amount or v alue
of the premiums on those shares shall be immediately paid in fu ll
and transferred to an account, to be called "the share premiumaccount", and the provisions of this Act relating to the reduct ion of
the issued share capital of a company shall, except as provided  in
this article, apply as if the share premium account were paid u p
share capital of the company.
(2) The share premium account may, notwithstanding anything
contained in the foregoing sub-article, be applied by the compa ny -
(a) in paying up unissued shares of the company to be
issued to members of the company as fully paid bonusshares; or
(b) in writing off the preliminary expenses of the company
or the expenses of or the commission paid or discountallowed on, any issue of shares or debentures of thecompany; or
(c) in providing for the premium payable on redemption
of any redeemable preference shares or of anydebentures of the company.
Group 
reconstruction relief.
Added by:
XV . 2007.8.114A.  (1) Where a company issues shares (the "issuing
company") and the issuing company -
(a) is a qualifying subsidiary of another company ("the
holding company"); and
(b) allots shares -
(i) to the holding company; or
 70        CAP. 386. ]                         COMP ANIES
(ii) to another qualifying subsidiary of the holding
company,
in consideration for the transfer to the issuing
company of non-cash assets of a company that is amember of the group of companies that comprises theholding company and all its qualifying subsidiaries(the "transferor company"),
the issuing company shall not be required in terms of article 1 14 to
transfer any amount in excess of the minimum premium value tothe share premium account.
(2) For the purposes of this article the "minimum premium
value" means the amount, if any, by which the base value of theconsideration for the shares allotted exceeds the aggregate nom inal
value of the shares.
(3) The base value of the consideration for the shares allotted is
the amount by which the base value of the assets transferredexceeds the base value of any liabilities of the transferor com pany
assumed by the issuing company as part of the consideration for  the
assets so transferred.
(4) For the purposes of this article:
(a) the base value of assets transferred is taken as -
(i) the cost of those assets to the transferor
company; or
(ii) the amount at which those assets are stated in the
transferor company’s accounting recordsimmediately before the transfer; or
(iii) the fair market value of the assets,
whichever is less;
(b) the base value of the liabilities assumed is taken as the
amount at which they are stated in the transferorcompany’s accounting records immediately before thetransfer.
(5) For the purposes of this article the term "qualifying
subsidiary" shall mean a company in which the holding companyholds at least an eighty per cent equity holding. The term "eig hty
per cent equity holding" shall have the meaning assigned to it in
article 114B(5).
Takeover relief.
Added by:
XV . 2007.8.114B.  (1) The provisions of article 114 shall not apply when the
company issuing shares ("the issuing company") has secured atleast an eighty per cent equity holding in another company inpursuance of an arrangement providing for the allotment of equi ty
securities in the issuing company on terms that the considerati on
for the shares allotted is to be provided:
(a) by the issue or transfer to the issuing company of
equity securities in the other company; or
(b) by the cancellation of any such shares not held by the
issuing company.
                    COMP ANIES              [CAP. 386.       71
(2) The provisions of article 114 shall not apply when the
equity securities in the issuing company allotted in pursuance of
the arrangement in consideration for the acquisition or cancell ation
of equity securities in the other company are issued at a premi um.
(3) The provisions of article 114 shall not apply where the
arrangement also provides for the allotment of any shares in th e
issuing company on terms that the consideration for those share s is
to be provided:
(a) by the issue or transfer to the issuing company of non-
equity securities in the other company; or
(b) by the cancellation of any such shares in that company
not held by the issuing company.
(4) The provisions of this article shall not apply in cases fall ing
under article 114A.
(5) For the purposes of this article an "eighty per cent equity
holding" means a holding of eighty per cent of the nominal valu e of
the company’s issued equity securities:
Provided that in determining the existence of "eighty per
cent equity holding" it shall be immaterial whether any of thos e
securities were acquired in pursuance of the arrangement:
Provided further that shares held by the other company in
itself shall be excluded in determining the nominal value of th e
company’s issued equity securities.
(6) Where the issued share capital of the issuing company is
divided into various classes of shares the requirement in sub-a rticle
(5) must subsist in relation to each of those classes of shares .
(7) For the purpose of this article, shares held by a group
company of the issuing company or their nominees shall be treat ed
as if they were held by the issuing company itself.
Relief may be 
reflected in company’s balance sheet.
Added by:
XV . 2007.8.114C.  An amount corresponding to the amount representing the
premiums, or part of the premiums, on shares issued by a compan y
that by virtue of any relief under articles 114A or 114B is notincluded in the company’s share premium account may also bedisregarded in determining the amount at which any shares or ot her
consideration provided for the shares issued is to be included in the
company’s balance sheet.
Power to make 
further provisions by regulations.
Added by:
XV . 2007.8.114D.  (1) The Minister may, by regulations published in the
Gazette, make such provision as appears to him to be appropriat e -
(a) for relieving companies from the requirements of
article 114 in relation to premiums other than cashpremiums;
(b) for restricting or otherwise modifying any relief from
those requirements provided for in this Chapter.
(2) The regulations referred to in sub-article (1) may make
different provision for different cases or classes of cases and  may
contain such incidental and supplementary provisions as theMinister may think fit.
 72        CAP. 386. ]                         COMP ANIES
Redeemable 
preference shares.
Amended by:
IV . 2003.59.115. (1) Where a company, duly authorised by its
memorandum or articles, issues preference shares which are to b e
redeemed or are liable to be redeemed at the option of the comp any
or the shareholder -
(a) no such shares shall be redeemed except out of the
profits of the company which would otherwise beavailable for dividend or, in accordance with sub-article (4), out of the proceeds of a fresh issue ofshares made for the purpose of the redemption;
(b) no such shares shall be issued after 1st June 2003
unless the following conditions are satisfied as regards
the terms and manner of redemption -
(i) the date on or by which, or dates between which,
the shares are to be or may be redeemed must bespecified in the company’s memorandum orarticles or, if the memorandum or articles soprovide, fixed by the directors, and in the lattercase the date or dates must be fixed before theshares are issued;
(ii) any other circumstances in which the shares are
to be or may be redeemed must be specified inthe company’s memorandum or articles;
(iii) the amount payable on redemption must be
specified in, or determined in accordance with,the company’s memorandum or articles, and inthe latter case the memorandum or articles mustnot provide for the amount to be determined byreference to any person’s discretion or opinion;and
(iv) any other terms and conditions of redemption
shall be specified in the company’smemorandum or articles;
(c) no such shares shall be redeemed unless they are fully
paid up and the terms of redemption shall require fullpayment on redemption;
(d) the premium, if any, payable on redemption shall have
been provided for out of the profits of the company orout of the company’s share premium account beforethe shares are redeemed;
(e) where any such shares are redeemed otherwise than
out of the proceeds of a fresh issue, there shall, out ofprofits, which would otherwise have been available fordistribution as dividend, be transferred to a reserve tobe called "the capital redemption reserve", a sum equalto the nominal amount of the shares redeemed, and the
provisions of this Act relating to the reduction of theissued share capital of a company shall, except asprovided in this article, apply as if the capitalredemption reserve were paid up share capital of thecompany.
                    COMP ANIES              [CAP. 386.       73
(2) The capital redemption reserve may, notwithstanding
anything contained in this article, be applied by the company i n
paying up unissued shares of the company to be issued to member s
of the company as fully paid bonus shares.
(3) Preference shares redeemed under this article shall be
treated as cancelled on redemption, and the amount of thecompany’s issued share capital shall be diminished by the nomin al
value of those shares accordingly:
Provided that a redemption of preference shares by a
company shall not to be taken as reducing the amount of thecompany’s authorised share capital.
(4) Without prejudice to the provisions of sub-article (3), wher e
a company is about to redeem preference shares, it shall have t he
power to issue shares up to the nominal value of the preferenceshares to be redeemed as if those preference shares had never b een
issued.
(5) A notice of the redemption of preference shares referred to
in the preceding sub-articles of this article shall be delivere d by the
company to the Registrar for registration, within fourteen days  after
the date of redemption.
(6) If default is made in complying with the provisions of sub-
article (5) every officer of the company who is in default shal l be
liable to a penalty, and, for every day during which the defaul t
continues, to a further penalty.
Rights of holders 
of special classes of shares and changes or variations thereof.
Amended by:
XXIV . 1995.362;L.N. 181 of 2006;
L.N. 186 of 2006.116. (1) If, in the case of a company the share capital of which
is divided into different classes of shares, provision is made by the
memorandum or articles for authorising the change of any shares  in
the company from one class into another or for the variation of  the
rights attached to any class of shares in the company, subject to the
consent of any specified proportion of the holders of the issue d
shares of that class and of any other class affected thereby or  the
sanction of a resolution passed at a separate meeting of the ho lders
of those shares and of the holders of any other shares affectedthereby, and in pursuance of the said provision the shares arechanged from one class into another or the rights attached to a ny
such class of shares are at any time varied, the holders of not  less in
the aggregate than fifteen per cent either of the issued shares  of that
class or of any other class affected thereby, being persons who  did
not consent to or vote in favour of the resolution for the chan ge or
variation, may by sworn application filed within twenty-one day s
of the consent or the resolution, demand that the change orvariation shall not have effect.
(2) On any such demand the court, if it is satisfied, having
regard to all circumstances of the case, that the change or var iation
would unfairly prejudice the holders of shares, the class of wh ich is
being changed or the rights of which are being varied, or theholders of any other class of shares affected thereby, shall di sallow
the change or variation.
(3) The Registrar of Courts shall without delay cause a copy of
any sworn application filed under sub-article (1) and of any
 74        CAP. 386. ]                         COMP ANIES
judgment given thereon to be served on the Registrar for
registration, and the said sworn application shall, on pain of nullity,
include a demand to that effect.
(4) Article 79(2) and (4) shall apply in respect of any consent or
resolution given or taken in terms of sub-article (1).
(5) Where no provision is made by the memorandum or articles
for authorising the change or variation referred to in sub-arti cle (1),
no such change or variation may be made
Chapter VI - Miscellaneous provisions about shares and 
debentures 
Numbering of 
shares.117.  Each share in a company shall be distinguished by its
appropriate number:
Provided that, if at any time all the issued shares in a
company, or all the issued shares therein of a particular class , are
fully paid up and rank pari passu  for all purposes, none of those
shares need thereafter have a distinguishing number so long as they
remain fully paid up and rank pari passu  for all purposes with all
shares of the same class for the time being issued and fully pa id up.
Transfer of shares 
or debentures.
Amended by:
XIX. 2010.31;XI.2017.5;XXXI. 2017.76.118. (1) Notwithstanding any provisions contained in any
other law, a transfer of shares in or debentures of a company s hall
be made in writing.
(2) It shall not be lawful for a company to register a transfer of
shares in or debentures of the company unless a proper instrume nt
of transfer or an authentic copy thereof has been delivered to the
company:
Cap. 364.Provided that, without prejudice to any obligation arising
under the provisions of the Duty on Documents and Transfers Act,
nothing in this article shall prejudice any power of the compan y to
register as shareholder or debenture holder any person to whom the
right to any shares in or debentures of the company has beentransmitted causa mortis .
Substituted by:
XXXI. 2017.76.(3) This article shall not apply to shares or debentures of a
company held or evidenced in a dematerialised form or represent ed in
book-entry form as immobilisation.
Registration of 
transfer or transmission of shares or debentures.119. (1) On the application of the transferor or of the
transferee of any share in or debenture of a company, the compa ny
shall enter in its register of members or of debentures, as the  case
may be, the name and address of the transferee and where theapplication is made by the transferor the entry shall be made i n the
same manner and subject to the same conditions as if theapplication for the entry were made by the transferee.
(2) If a company refuses to register a transfer of shares or
debentures, it shall, within two months after the date on which  the
transfer was lodged, send to the transferee notice of the refus al.
(3) Notwithstanding the provisions of the regulations contained
in Part I of the First Schedule and notwithstanding anythingcontained in a public company’s memorandum or articles, the
                    COMP ANIES              [CAP. 386.       75
directors of a public company shall be obliged to register the
transfer of any shares in the company in favour of any person w ho
has acquired those shares as a result of a judicial sale thereo f.
(4) On the application of the person to whom the right to any
shares in or debentures of a company has been transmitted causa
mortis , the company shall register in its register of members or
debentures, as the case may be, the name and address of suchperson.
(5) If a company refuses to register a transmission as is
referred to in sub-article (4), it shall, within two months aft er the
date on which the transmission is lodged, send to the person towhom the right to any shares or debentures of a company has bee n
transmitted causa mortis , notice of the refusal.
(6) If default is made in complying with the provisions of sub-
articles (2) or (5), every officer of the company who is in def ault,
shall be liable to a penalty, and, for every day during which t he
default continues, to a further penalty.
Issue of 
certificates.
Amended by:
XIX. 2010.32. 120. (1) Every company shall, within two months after the
allotment of any of its shares or debentures and within two mon ths
after the date on which a transfer of any such shares or debent ures
is registered with the company, and within one month from the d ate
on which any such shares or debentures transmitted causa mortis
have been registered in the name of the person entitled to beregistered as the holder thereof, deliver the certificates of a ll
shares, debentures or debenture stock allotted, transferred ortransmitted causa mortis  to the persons entitled thereto, unless the
conditions of issue of the shares or debentures otherwise provi de.
(2) The expression "transfer" for the purposes of this article
means a transfer on which the relevant duty, if any, has been p aid
and is otherwise valid, and does not include such a transfer as  the
company is for any reason entitled to refuse to register and do es not
register.
(3) In the case of a transfer or of a transmission  causa mortis of
shares the company shall within fourteen days after the date onwhich a transfer of any such shares is registered with the comp any,
and within one month from the date on which any such sharestransmitted causa mortis  have been registered in the name of the
person entitled to be registered as the holder thereof, deliver  to the
Registrar for registration a notice of the transfer or the tran smission
causa mortis  stating the names and addresses of the transferees or
the names and addresses of the persons entitled to the sharestransmitted causa mortis , as the case may be:
Provided that in the case of public companies whose shares
are admitted to listing on a regulated market or on an equivale nt
market in a non-Member State or non-EEA State, the delivery tothe Registrar shall take place within ninety days after the dat e on
which a transfer of any such shares is registered with the comp any,
and within ninety days from the date on which any such sharestransmitted causa mortis  have been registered in the name of the
person entitled to be registered as the holder thereof.
 76        CAP. 386. ]                         COMP ANIES
(4) If default is made in complying with any of the provisions
of this article, every officer of the company who is in default  shall
be liable to a penalty, and, for every day during which the def ault
continues, to a further penalty.
Prohibition of 
share warrants.Substituted by:XI.2017.6.121. No company may issue a share warrant to bearer
notwithstanding anything contained in its memorandum andarticles of association.
Transitory 
provisions. 
Added by:
XI. 2017.7.121A.  (1)  A holder of a share warrant shall, before the expiry of
nine months from the coming into force of the Companies(Amendment) Act, 2017 surrender the share warrant to thecompany which had issued such warrant.
(2) Upon the surrender of a share warrant the company shall:
(a) cancel any share warrant issued by it;
(b) enter in its register of members the name of the
persons requesting that their names and addresses beentered in the register of members in lieu of sharewarrants surrendered, and in this regard the provisionsof article 123(1)( a), (1)( b) and (2) shall apply; and
(c) notify the Registrar of any changes in the register of
members made consequently to that provided in sub-article (1) and paragraphs ( a) and ( b).
(3) Any share warrant which is not surrendered to the issuing
company as aforesaid by the end of the period mentioned in sub-article (1) shall, after the end of the said period, no longer be
recognised by the company and such share warrants shall bedeemed to have been cancelled.
Pledging of 
securities.
Amended by: 
XXIV .1995.362;IX. 1997.7;IV . 2003.60;IX. 2008.14;XI. 2017.8;V .2020.32.122. (1) Securities may, unless otherwise provided in the
memorandum or articles of the company or under the conditions o f
issue of those securities, be pledged by their holder in favour  of any
person as security for any obligation. The pledge of securities  shall
be constituted by means of an instrument in writing entered int o
between the pledgor and the pledgee:
Provided that in the case of a private company, securities
may not be pledged unless the memorandum or articles of thecompany specifically so provide; and in relation to transfers o f
shares by members of the company any restriction resulting fromthe memorandum or articles of the company shall, subject to theprovisions of sub-article (10), be deemed not to apply to trans fers
by the pledgee in terms of sub-article (6) or resulting from an y
judicial sale.
(2) Notice of the pledge shall be delivered by the pledgor or th e
pledgee to the Registrar for registration within fourteen days of the
granting of the pledge. The company whose securities have beenpledged, shall also be notified of the pledge in writing within  the
said period and the company shall record that fact in the regis ter of
holders of the respective securities.
(3) The pledge of securities shall be effective in relation to a
                    COMP ANIES              [CAP. 386.       77
third party only after the registration by the Registrar of the  notice
referred to in sub-article (2).
(4) Saving the provisions of sub-article (3), during the
existence of a pledge of securities, any transfer or otherassignment, made by the pledgor, whether by onerous or gratuito us
title, of the pledged securities shall be null and void.
(5) Notwithstanding the provisions of sub-article (4), any
transfer or other assignment of securities made with the consen t of
the pledgee shall be valid and the securities to be transferred  shall
continue to be subject to the pledge.
Cap. 16.(6) Without prejudice to the right of the pledgee to apply for
the judicial sale of the securities and notwithstanding theprovisions of the 
Civil Code or of the memorandum or articles of
the company, in the event of a default under the agreement ofpledge and upon giving notice by judicial act to the pledgor an d the
company, the pledgee shall be entitled to -
(i) dispose of the securities which are pledged in his
favour; or
(ii) appropriate and acquire the securities himself, in
settlement of the debt due to him or of partthereof.
(7) For the purposes of sub-article (6) the value of the
securities may be established by agreement between the pledgorand the pledgee after notice of default has been given by thepledgee to the pledgor in terms of the said sub-article (6), an d no
prior agreement thereon shall be valid:
Provided that, in case of disagreement, the fair value for the
sale or appropriation of the securities shall be determined by a
certified public accountant or a certified public accountant an d
auditor appointed by the Civil Court, First Hall, on the applic ation
of the pledgee.
(8) For the purposes of sub-article (7), the fair value of the
securities shall be that obtaining on the date of the notice re ferred
to in sub-article (6).
(9) The pledgee shall, in selling the securities in accordance
with the provisions of sub-article (6), be obliged to seek the best
price being not less than their fair value as determined inaccordance with sub-article (7). In the event that a buyer cann ot be
found for the securities at their fair value, the pledgee shall  apply to
the court for the securities to be sold at less than their fair  value as
aforesaid subject to such conditions as the court may deem fit.
(10) In the case of a pledge of shares in a private company, the
pledgee shall be obliged, prior to the exercise of the right gr anted
by sub-article (6), to offer the shares to other shareholders o f the
company in accordance with any pre-emption rights relating to t he
transfer of shares as laid down in the memorandum or articles o f
that company, and, failing such pre-emption rights, to all the other
shareholders of the company in proportion to their holdings. Ineither case the shareholders shall be entitled to purchase the shares
at the price determined in accordance with sub-article (7). Suc h
 78        CAP. 386. ]                         COMP ANIES
offer shall be kept open for at least ten working days.
(11) In the case of a pledge of shares in a public company the
memorandum or articles of which require any shareholder wishingto transfer shares in the company to offer them on a pre-emptiv e
basis to other shareholders of the company, the pledgee shallaccordingly be obliged, prior to the exercise of the right gran ted by
sub-article (6), to offer the sha res to those shareholders, who  shall
be entitled to purchase the shares at the price determined inaccordance with sub-article (7). Such offer shall be kept open for at
least ten working days.
(12) ( a) In the case of a pledge of securities in a company which
are listed on a Maltese regulated market and in respect of
which securities arrangements have been made for themaintenance by such Maltese regulated market of therelevant register of holders thereof, the provisions ofsub-articles (2) to (11) and (15) shall not apply for suchquoted securities. The following provisions shall applyinstead:
(i) the pledgor or the pledgee shall deliver within
fourteen days of the granting of the pledge of aquoted security a certified copy of the signedpledge agreement to the Maltese regulatedmarket, which shall also be served with a noticeof termination of the pledge by the pledgeewithin fourteen days of the termination of thepledge;
(ii) the company whose listed securities have been
pledged shall also be notified of the pledge or ofits termination within the said periods and thecompany shall record that fact in the register ofholders of the respective securities;
(iii) such pledge of securities shall be effective in
relation to a third party only from the date ofdelivery of the signed pledge agreement to theMaltese regulated market and any transfer orother assignment made therefrom by the pledgor,whether by onerous or gratuitous title, of thepledged securities shall be null and void; and
Cap. 370.(iv) the pledgee shall, in the event of a default under
the agreement of pledge and upon giving noticeby judicial act to the pledgor, the Malteseregulated market and the company, have thesecurities sold through a person duly licensedunder the 
Investment Services Act.
(b) In the case of a pledge of securities in a public company
which are listed on a regulated market other than a
Maltese regulated market or on an equivalent marketin a non-Member State or non-EEA State, theprovisions of sub-articles (7) to (11) shall not applyand in the event of a default under the agreement ofpledge, the pledgee shall, upon notice to the pledgorand the company in accordance with sub-article (6)
                    COMP ANIES              [CAP. 386.       79
have the securities sold through a person duly
authorised for this purpose.
(13) In the exercise of his rights under this article, the pledg ee
shall only sell or appropriate such number of securities as areneeded to raise sufficient proceeds to repay the debt due. Allremaining shares shall be released to the pledgor.
(14) It shall be lawful for the parties to an agreement of pledg e
of securities to agree on the person or persons who shall exerc ise
all the rights belonging to the holder of securities including voting
rights and the right to receive dividends and interest payments :
Provided that, should the agreement between the parties not
make provision for such matters, all rights pertaining to a hol der of
securities shall, for the duration of the pledge, be exercised by the
pledgor until such time as he defaults under the agreement ofpledge or until the pledgee enforces his security; and in any s uch
case, upon giving notice by a judicial act to the pledgor and t he
company, all the rights belonging to the pledgor shall immediat ely
become exercisable by the pledgee:
Provided further that, unless the pledgor and the pledgee
have otherwise agreed in the pledge agreement and notice thereo f
has been given to the company, dividends or interests payments due
on securities which are pledged shall, during such time as thepledge is registered in the register of holders of the respecti ve
securities, be paid by the company to the pledgee who shallappropriate any such amounts received to the interest due on th e
debt secured by the pledge, and, if there is an excess, to the capital.
(15) Notice of termination of the pledge shall be delivered by
the pledgee to the Registrar for registration within fourteen d ays of
the termination of the pledge. The company, securities in whichhave been pledged, shall also be notified in writing of thetermination of the pledge within the said period and the compan y
shall record that fact in the register of holders of the respec tive
securities.
(16) Subject to the provisions of sub-articles (6) to (9) and (1 3),
the terms and conditions of the pledge of a debenture warrant s hall
be determined by agreement betwee n the pledgor and the pledgee.
The pledge f a debenture warrant shall be effective in relation  to a
third party from the date of delivery of the share warrant ordebenture warrant to the pledgee.
Register of 
members.
Amended by:
XXXI. 2017.77.123. (1) Every company shall keep a register of its members
and shall enter therein the following particulars:
(a) the names and addresses of the members and a
statement of the shares held by each member,distinguishing each share by its number, so long as theshare has a number, and of the amount paid or agreedto be considered as paid on the shares of each member;
(b) the date at which each person was entered in the
register as a member; and
(c) the date at which any person ceased to be a member.
 80        CAP. 386. ]                         COMP ANIES
(2) Where two or more persons hold one or more shares in a
company jointly, they shall, for the purposes of this Act, be t reated
as a single member; and, unless otherwise provided in thememorandum or articles, the name of only one of such personsshall be entered in the register of members. Such person shall be
elected by the joint holders and shall for all intents and purp oses be
deemed vis-à-vis  the company to be the member of the company in
respect of all the shares so held.
(3) The register of members shall be kept at the registered
office of the company or at such other place as may be specifie d in
the memorandum or articles.
(3A) Notwithstanding the provisions of this article, a company may
make arrangements for the register of its members to be kept in  a
dematerialised form or represented in book-entry form asimmobilisation with a central securities depository established  in a
recognised jurisdiction:
Provided that the company shall remain responsible for the
proper keeping of the register and shall keep a copy of all ent ries
relating to registered shareholders held by the central securit ies
depository .
(4) If default is made in complying with any requirement of
this article, every officer of the company who is in default sh all be
liable to a penalty, and, for every day during which the defaul t
continues, to a further penalty.
Register of 
debentures.
Amended by:
XXXI. 2017.78.124. (1) Every company shall keep a register of debentures
and shall enter therein the names and addresses of the register ed
holders and particulars of the debentures held by them respecti vely.
(2) The register of debentures shall be kept at the registered
office of the company or at such other place as may be specifie d in
the memorandum or articles.
(3) Where two or more persons hold one or more debentures
jointly, they shall for the purposes of this Act be treated as a single
debenture holder; and, unless otherwise provided in thememorandum or articles, the name of only one of such personsshall be entered in the register of debentures. Such person sha ll be
elected by the joint holders and shall for all intents and purp oses be
deemed vis-à-vis  the company to be the holder of all the debentures
so held.
(3A) Notwithstanding the provisions of this article, a company may
make arrangements for the register of its members to be kept in  a
dematerialised form or represented in book-entry form asimmobilisation with a central securities depository established  in a
recognised jurisdiction:
Provided that the company shall remain responsible for the
proper keeping of the register and shall keep a copy of all ent ries
relating to registered shareholders held by the central securit ies
depository .
(4) If default is made in complying with any requirement of
this article, every officer of the company who is in default sh all be
                    COMP ANIES              [CAP. 386.       81
liable to a penalty and, for every day during which the default
continues, to a further penalty.
Inspection of 
registers.125.  Except when duly closed in accordance with the
provisions of article 126, and subject to such reasonablerestrictions as the company in general meeting may impose -
(a) the register of members shall be open to the inspection
of any member of the company without charge; and
(b) the register of debentures shall be open to the
inspection of any person without charge.
Power to close 
registers.126. (1) A company may, on giving notice by advertisement in
a daily newspaper circulating wholly or mainly in Malta, close the
register of members to inspection for any period or periods notexceeding in the whole thirty days in each year.
(2) The register of debentures may be closed to inspection in
accordance with provisions contained in the memorandum orarticles or in the debentures or, in the case of debenture stoc k, in
the stock certificates, during such period or periods, not exce eding
in the whole thirty days in any one year, as may be thereinspecified.
(3) The memorandum or articles may provide that, during such
time as the register of members or the register of debentures i s
closed in accordance with the provisions of sub-articles (1) an d (2),
no new particulars may be entered therein.
Proper keeping of 
register in certain instances.
Added by:
XIX. 2010.33.
Amended by:
XI. 2017.9.Cap. 345.126A. (1) Notwithstanding the provisions of articles 123 and
124, where shares or debentures of a company are held orevidenced in a dematerialised or uncertificated form within themeaning of the 
Financial Markets Act, the company shall remain
responsible for the proper keeping of the register and shall ke ep a
copy of all entries relating to registered shareholders and reg istered
holders of debentures held by the central securities depository  or by
an overseas central securities depository.
Cap. 345.(2) For the purposes of this article "central securities
depository" and "overseas central securities depository" shall have
the same meaning assigned to them in article 2 of the Financial
Markets Act.
Trustees and 
nominees.
Amended by:
XIII. 2004.99.127. (1) Unless otherwise provided in its articles, a company
formed and registered in Malta shall not recognise any nomineerelationship or trust in respect of any security issued by it, and the
company shall not recognise, even when having notice thereof, a ny
interest or other right in such security, but shall only recogn ise the
registered holder thereof.
(2) Notwithstanding anything contained in this article, the
persons beneficially entitled to a security shall be taken intoaccount, and any nominee or any trust relationship shall bedisregarded, for determining the status of the company for thepurpose of Chapter XII of this Title:
Provided that the company shall not be obliged to obtain or
 82        CAP. 386. ]                         COMP ANIES
to record any information on the number of beneficiaries and it
shall be the sole duty of the trustee to inform the company of the
number of beneficiaries if it appears to the trustee that, havi ng
regard to the number of beneficiaries, it may result in the agg regate
number of persons interested exceeding fifty. The Registrar may  at
any time order any trustee to declare in writing to the company  the
number of beneficiaries and in su ch a case reference shall only  be
made to beneficiaries who enjoy a fixed interest in the shares under
the trust.
(3) Where a trustee holds shares in a company for the benefit of
beneficiaries:
(a) the memorandum of association and articles of
association, if any, shall be deemed to be validlyentered into for the purposes of articles 68 and 75 ifthey are signed only by the trustee when all the sharesin the company are subscribed by the trustee;
(b) the memorandum of association, the register of
members, share certificates, returns of allotments andany annual return of a company may specify thenumber of shares held by the trustee on its ownaccount, if any, and the amount of shares held undertrusts or each trust if more than one, and the provisionsof article 123(1)( a), (b) and ( c) shall be construed
accordingly;
(c) a resolution in writing pursuant to article 210 shall be
deemed to be valid and effective if it is signed only bythe trustee when all the shares in the company aresubscribed by the trustee.
Cap. 364.
Cap. 123.(4) ( a) Where a beneficial owner of shares in a company
which are held by a trustee, transfers or otherwisedisposes of the beneficial ownership of such sharesinter vivos to a third party, such a transaction shall be
deemed to constitute a transfer of shares for thepurposes of the 
Duty on Documents and Transfer Act,
and for the purposes of article 5(1) of the Income Tax
Act.
Cap. 364.
Cap. 123.(b) Where a change in the registered holder of shares in a
company does not involve a change in the beneficialownership thereof, such change shall not be deemed toconstitute a transfer of shares for the purposes of the
Duty on Documents and Transfers Act, and for the
purposes of article 5(1) of the Income Tax Act, but
shall nevertheless be noted in the register of members.
Cap. 364. (c) For the purposes of article 49 of the Duty on
Documents and Transfers Act, "transferor" and
"transferee" in a transfer of shares  inter vivos  shall be
deemed to include a trustee acting on behalf of eitherthe transferor or the transferee of the beneficialownership of such shares, or of both such transferorand transferee.
(5) In this article:
                    COMP ANIES              [CAP. 386.       83
"beneficial owner" means the person beneficially entitled to th e
shares under a trust or a fiduciary agreement;
Cap. 331."trustee" shall mean a person who may act as a trustee in
accordance with the Trusts and Trustees Act and shall include any
fiduciary holding shares on behalf of another person.
(6) Except where expressly permitted under article 212,
nothing in this article shall be deemed to imply that a company  may
have less than two members.
Shares in 
companies held by private foundations, including those with segregated cells.
Added by:
XXXVI.2018.119 .127A.  (1)  Except as provided for in this article, the provisions of
the preceding article shall not apply to foundations and -
(a) a private foundation as an organisation with legal
personality; or
(b) when the foundation is a multi-cell foundation, a
segregated cell in a private foundation whichconstitutes a distinct patrimony administered by theprivate foundation,
shall be considered to be the holder of any shares registered i n the
name of the private foundation or in the name of the foundation  with
reference to a cell, and beneficial owners shall not be taken i nto
account and shall be disregarded for determining the status of the
company for the purpose of Chapter XII of this Title.
Cap. 364.
Cap. 123.(2) ( a) Where a beneficial owner of shares in a company,
which are held by a private foundation, transfers or otherwisedisposes of the beneficial ownership of such shares inter vivos  to a
third party, such a transaction shall be deemed to constitute atransfer of shares for the purposes of the 
Duty on Documents and
Transfer Act, and for the purposes of article 5(1) of the Income Tax
Act.
Cap. 364.
Cap. 123.(b) Where a change in the registered holder of shares in a
company does not involve a change in the beneficialownership thereof, such change shall not be deemed toconstitute a transfer of shares for the purposes of the
Duty on Documents and Transfers Act, and for the
purposes of article 5(1) of the Income Tax Act, but
shall nevertheless be noted in the register of members.
Cap. 364. (c) For the purposes of article 49 of the Duty on
Documents and Transfers Act, "transferor" and
"transferee" in a transfer of shares inter vivos shall bedeemed to include a private foundation acting for thebenefit of either the transferor or the transferee of thebeneficial ownership of such shares, or of both suchtransferor and transferee.
Cap. 16.(3) When a transaction takes place relating to a cell of an
organisation under article 20A or under article 20B of the Seco nd
Schedule to the Civil Code and the relevant private foundation, or
the foundation with reference to a cell, is the registered hold er of
any shares in a company, any such transaction shall be treated as a
change in the registered holder of the shares in a company with out
 84        CAP. 386. ]                         COMP ANIES
any change in the beneficial owner of the shares. As such
transactions result in a change in legal ownership of any share s in a
company, the administrators, or their delegates, of -
(a)the transferring organisation and, if different, those of
recipient organisation under the said article 20A; or
(b) the organisation of which the cell formed part and
those of the new organisation under the said article20B,
as the case may be, shall, within fifteen (15) days from the
date of the act, deliver to the Registrar a formnotifying him of the transfer of such shares from onefoundation to the other, or from the foundation to anew organisation, as the case may be.
(4) The same principles above stated shall apply when the
transferor and, or transferee are involved in a partnership en
commandite  the capital of which is divided into shares.
(5) In this article:
"beneficial owner" means the person beneficially entitled to
the shares under a private foundation;
Cap. 16."private foundation" shall mean a foundation as defined in
article 31B of the Second Schedule of the Civil Code .
Chapter VII - Meetings and Resolutions
Holding of annual 
general meeting.128. (1) Every company shall in each year hold a general
meeting as its annual general meeting in addition to any othermeetings in that year, and shall specify the meeting as such in  the
notices calling it, and not more than fifteen months shall elap se
between the date of one annual general meeting of the company a nd
that of the next:
Provided that so long as a company holds its first annual
general meeting within eighteen months of its registration it n eed
not hold it in the year of its registration or in the following  year.
(2) Every general meeting other than an annual general meeting
shall be an extraordinary general meeting.
(3) If default is made in complying with the provisions of sub-
article (1), every officer of the company who is in default sha ll be
liable to a penalty, and, for every day during which the defaul t
continues, to a further penalty.
Convening of 
extraordinary general meeting on requisition.129. (1) The directors of a company shall, on the requisition of
a member or members of the company holding at the date of thedeposit of the requisition not less than one-tenth of such of t he paid
up share capital of the company as at the date of the deposit c arried
the right of voting at general meetings of the company, forthwi th
proceed duly to convene an extraordinary general meeting of thecompany.
                    COMP ANIES              [CAP. 386.       85
(2) The requisition shall state the objects of the meeting and
shall be signed by the requisitionist or requisitionists and de posited
at the registered office of the c ompany and may consist of seve ral
documents in like form each signed by the requisitionist, or if  there
is more than one requisitionist in any one document by all of t hem.
(3) If the directors do not within twenty-one days from the date
of the deposit of the requisition proceed duly to convene a mee ting,
the requisitionist or requisitionists may convene a meeting in the
same manner, as nearly as possible, as that in which meetings a re to
be convened by the directors, but a meeting so convened shall n ot
be held after the expiration of three months from the date of t he
deposit of the requisition.
(4) Any reasonable expense incurred by the requisitionist or
requisitionists by reason of the failure of the directors duly to
convene a meeting shall be repaid to the requisitionist orrequisitionists by the company, and any sum so paid shall be du e
personally by the directors who were in default and may be reta ined
by the company out of any sums due or to become due from thecompany by way of fees or other remuneration in respect of thei r
services to such of the directors as were in default.
Length of notice 
for calling general meetings.130.  A general meeting of a company shall be deemed not to
have been duly convened unless at least fourteen days’ notice h as
been given in writing, and any provision in the company’smemorandum or articles shall be construed as requiring fourteendays’ notice in writing in so far as it provides for the callin g of a
meeting of a company, other than an adjourned meeting, by ashorter notice:
Provided that a meeting of the company shall
notwithstanding that it is called by a shorter notice, be deeme d to
have been duly convened if it is so agreed by all the membersentitled to attend and vote thereat.
General provisions 
as to meetings and votes.
Amended by:
L.N. 425 of 2007.131.  The following provisions shall have effect in so far as the
articles of a company do not contain other provisions in that b ehalf-
(a) notice of any general meeting of a company shall be
given to every member of the company and shall beserved in the manner in which notices are required tobe served by the First Schedule;
(b) two members personally present shall be a quorum; 
(c) any member elected by the members present at a
meeting may be chairman thereof;
(d) every member shall have one vote in respect of each
share or each euro of stock held by him unlessotherwise provided in the terms of issue of such sharesor stock.
Powers of court to 
order meeting.132. (1) If for any reason it is impracticable to call a meeting
of a company in any manner in which meetings of the companymay be called, or to conduct the meetings of that company in th e
manner prescribed by the articles or this Act, the court may, e ither
 86        CAP. 386. ]                         COMP ANIES
on its own motion or on the demand of either of the parties to the
proceedings during the course of such proceedings or, in theabsence of any proceedings, on the application of any director of
the company or of any member of the company who would beentitled to vote at the meeting, order a meeting of the company  to
be called, held and conducted in such manner as the court think s fit,
and where any such order is made, may give such ancillary orconsequential directions as it thinks expedient, including adirection that one member of the  company present in person or b y
proxy shall be deemed to constitute a meeting.
(2) The provisions of sub-article (1) shall also apply to the
calling of meetings of the board of directors of a company, if the
court considers that the circumstances justify such course of a ction.
Proxies. 133. (1) Notwithstanding anything contained in the
memorandum or articles of a company, any member entitled toattend and vote at a meeting of the company or at a meeting of any
class of members of the company shall be entitled to appointanother person, whether a member or not, as his proxy to attend  and
vote instead of him, and a proxy s o appointed shall have the sa me
right as the member to speak at the meeting and to demand a pol l.
(2) The appointment of a proxy shall be in writing.(3) In every notice calling a meeting of a company there shall
appear with reasonable prominence a statement that a memberentitled to attend and vote is entitled to appoint a proxy and that a
proxy need not also be a member. If default is made in complyin g
with this sub-article, every officer of the company who is in d efault
shall be liable to a penalty.
(4) A provision in a company’s memorandum or articles shall
be void in so far as it would have the effect of requiring aninstrument appointing a proxy, or any other document necessary to
show the validity of, or otherwise relating to, the appointment  of a
proxy, to be received by the company or any other person morethan forty-eight hours before a meeting or adjourned meeting fo r
that appointment to be effective.
(5) A company shall not issue at its own expense to some only
of the members entitled to be sent a notice of a meeting and to  vote
thereat by proxy, invitations to appoint as proxy a person or o ne of
a number of persons specified in the invitations. If default is  made
in complying with this sub-article, every officer of the compan y
who is in default shall be liable to a penalty:
Provided that an officer shall not be liable to a penalty by
reason only of the issue to a me mber at his request in writing of a
form of appointment naming the proxy, or of a list of personswilling to act as proxy, if the form or list is available on re quest in
writing to every member entitled to vote at the meeting by prox y.
(6) The provisions of this article shall apply to meetings of an y
class of members of a company as they apply to general meetingsof the company.
                    COMP ANIES              [CAP. 386.       87
Right to demand a 
poll.134. (1) Any provision contained in the memorandum or
articles of a company shall be void in so far as it would have the
effect either- 
(a) of excluding the right to demand a poll at a general
meeting on any question other than the election of thechairman of the meeting or the adjournment of themeeting; or
(b) of making ineffective a demand for a poll on any such
question which is made either -
(i) by not less than five members having the right to
vote at the meeting; or
(ii) by a member or members representing not less
than one-tenth of the total voting rights of all themembers having the right to vote at the meeting;or
(iii) by a member or members holding shares in the
company conferring a right to vote at themeeting being shares on which an aggregate sumhas been paid up equal to not less than one-tenth
of the total sum paid up on all the sharesconferring that right.
(2) The instrument appointing a proxy to vote at a meeting of
the company shall be deemed to confer authority to demand or jo in
in demanding a poll; and for the purposes of sub-article (1) ademand by a person as proxy for a member shall be the same as ademand by the member.
(3) On a poll taken at a meeting of a company or a meeting of
any class of members of that company, a member entitled to morethan one vote need not, if he votes, use all his votes or cast all the
votes he uses in the same way.
Extraordinary and 
ordinary resolutions.
Amended by:
IV . 2003.61.135. (1) A resolution shall be an extraordinary resolution
where-
(a) it has been taken at a general meeting of which notice
specifying the intention to propose the text of theresolution as an extraordinary resolution and theprincipal purpose thereof has been duly given; and
(b) it has been passed by a member or members having the
right to attend and vote at the meeting holding in theaggregate not less than seventy-five per cent innominal value of the shares represented and entitled to
vote at the meeting and at least fifty-one per cent, orsuch other higher percentage as the memorandum orarticles may prescribe, in nominal value of all theshares entitled to vote at the meeting:
    Provided that, if one of the aforesaid majorities is
obtained, but not both, another meeting shall beconvened within thirty days in accordance with theprovisions for the calling of meetings to take a freshvote on the proposed resolution. At the second meeting
 88        CAP. 386. ]                         COMP ANIES
the resolution may be passed by a member or members
having the right to attend and vote at the meetingholding in the aggregate not less than seventy-five percent in nominal value of the shares represented andentitled to vote at the meeting. However, if more thanhalf in nominal value of all the shares having the rightto vote at the meeting is represented at that meeting, asimple majority in nominal value of such shares sorepresented shall suffice.
(2) An ordinary resolution shall be passed by a member or
members having the right to attend and vote holding in theaggregate shares entitling the holder or holders thereof to mor e
than fifty per cent of the voting rights attached to sharesrepresented and entitled to vote at the meeting, or such other higher
percentage as the memorandum or articles may prescribe.
(3) In the case of a private company a resolution shall be an
extraordinary resolution where -
(a) the provisions of sub-article (1)( a) are complied with;
and
(b) it has been passed by a number of members having the
right to attend and vote at any such meeting holding in
the aggregate not less than fifty-one per cent innominal value of the shares conferring that right orsuch other higher percentage as the memorandum orarticles may prescribe.
Chapter VIII - Management and Administration
Power of company 
to borrow money, hypothecate or charge its undertaking, etc.
Amended by:
IV . 2003.62.136.  A company shall, unless otherwise provided in its
memorandum or articles, have the power to borrow money and toguarantee the obligations of any third party and, for such purp ose,
to hypothecate or charge its undertakings, property and uncalle d
capital or any part thereof including as security for its oblig ations
or for those of any third party, and to issue debentures, deben ture
stock and other securities whether outright or as security for its
liabilities or obligations or for those of any third party.
General duties of 
directors.
Added by:
IV . 2003.63.136A.  (1) A director of a company shall be bound to act
honestly and in good faith in the best interests of the company .
(2) The directors of a company shall promote the well-being of
the company and shall be responsible for:
(a) the general governance of the company and its proper
administration and management; and
(b) the general supervision of its affairs.
(3) In particular, but without prejudice to any other duty
assigned to the directors of a company, or to any one of them, by
the memorandum or articles of association or by this Act or anyother law, the directors of a company shall:
(a) be obliged to exercise the degree of care, diligence and
                    COMP ANIES              [CAP. 386.       89
skill which would be exercised by a reasonably
diligent person having both -
(i) the knowledge, skill and experience that may
reasonably be expected of a person carrying outthe same functions as are carried out by orentrusted to that director in relation to thecompany; and
(ii) the knowledge, skill and experience that the
director has;
(b) not make secret or personal profits from their position
without the consent of the company, nor make personalgain from confidential company information;
(c) ensure that their personal interests do not conflict with
the interests of the company;
(d) not use any property, information or opportunity of the
company for their own or anyone else’s benefit, norobtain benefit in any other way in connection with theexercise of their powers, except with the consent of thecompany in general meeting or except as permitted bythe company’s memorandum or articles of association;
(e) exercise the powers they have for the purposes for
which the powers were conferred and shall not misusesuch powers.
Directors.
Amended by:
IV . 2003.64.137. (1) Every public company shall have at least two
directors.
(2) Every private company shall have at least one director, and
where a private company has one director, all references in thi s Act
to two or more directors shall be construed as references to su ch
one director.
(3) The business of a company shall be managed by the
directors who may exercise all such powers of the company,including those specified in article 136, as are not by this Ac t or by
the memorandum or articles of the company, required to beexercised by the company in general meeting.
(4) Notwithstanding anything contained in the memorandum
and articles of association relating to the manner in which therepresentation of the company is to be exercised, anything done  by
the board of directors of a company which exceeds the limits oftheir authority or by any director which is beyond his powers, shall
be binding on the company unless that act exceeds the powersgranted to the board of directors or to a director, as the case  may be,
by virtue of this Act.
(5) Any limitation on the powers of the board of directors or of
any director of the company shall not be relied on as against t hird
parties independently of whether that limitation, published or not,
arises from the memorandum or articles or from any resolution o f
the general meeting or from a decision of the board of director s of
the company.
(6) Where an act of the company falls outside the company’s
 90        CAP. 386. ]                         COMP ANIES
objects, the company shall not be bound if it proves that, when  the
act was done, the third party knew that it was outside thecompany’s objects or the third party could not in view of thecircumstances have been unaware thereof:
Provided that the publication of the memorandum and
articles of the company shall not in itself be sufficient to pr ove that
the third party knew, or could not have been unaware, that the act
was outside the company’s objects.
(7) If the number of directors of a company is reduced below
two any member of the company may at any time after the lapse o f
thirty days therefrom, make an application to the court for the  court
to appoint a director or directors for the company in accordanc e
with its memorandum and this without prejudice to the right of the
continuing director to fill any vacancy so created in accordanc e
with the provisions of article 140(6) within the thirty days specified
herein or at any time thereafter for as long as a director is n ot
appointed by the court.
(8) A person appointed by the court in accordance with the
provisions of sub-article (7) shall hold office until the next annual
general meeting although he shall be eligible for re-election.
(9) The provisions of sub-article (7) shall furthermore be
without prejudice to the provisions of article 140(1) to (5) an d of
article 214(2)( b)(ii) and to the right of the company to fill any such
vacancy in general meeting.
Company 
secretary.
Amended by:
IV . 2003.65;XXXI. 2017.79.138. (1) Every company shall have a company secretary.
(2) No company shall:
(a) have as company secretary its sole director;
(b) have as sole director of the company a body corporate
the sole director of which is company secretary to thecompany.
Cap. 529.(c) have as company secretary a body corporate, unless
such body corporate is duly registered as a companyservice provider in terms of the 
Company Service
Providers Act:
Cap. 529.Provided that, for the purposes of this paragraph, a
body corporate which does not require registration interms of article 3(1)( a) and ( b) of the 
Company
Service Providers Act may also act as a company
secretary in terms of this article.
(3) It shall be the duty of the directors of a company to take a ll
reasonable steps to ensure that the company secretary is anindividual who appears to them to have the requisite knowledgeand experience to discharge the functions of company secretary, or is
a body corporate as referred to in sub-article (2)( c).
(4) In the event that the post of company secretary becomes
vacant, the directors of the company shall, within fourteen day s
from the date when the post becomes vacant, appoint anotherindividual, or a body corporate as referred to in sub-article ( 2)(c), to
                    COMP ANIES              [CAP. 386.       91
fill the post.
(5) The directors of a company shall have the power to remove
the company secretary and they shall a ppoint another company
secretary within fourteen days from the date of such removal.
(6) Anything required or authorised to be done by or to the
company secretary may, if the office is vacant or if there is f or any
other reason no company secretary capable of acting, be done by  or
to any officer of the company authorised generally or specifica lly
in that behalf by the directors.
(7) A provision authorising a thing to be done by or to a
director and the company secretary is not satisfied by its bein g
done by or to the same person acting both as director and as, o r in
place of, the company secretary.
(8) If default is made in complying with the provisions of sub-
article (4) every director of the company who is in default sha ll be
liable to a penalty, and for every day during which the defaultcontinues, to a further penalty.
Appointment of 
directors.
Amended by:
XI. 2017.10.139. (1) A person shall not be capable of being appointed
director of a public company unless he has personally, or by hi s
agent authorised in writing, signed the memorandum indicating h is
consent to act as a director or has otherwise signed and delive red to
the Registrar for registration a consent in writing to act as s uch
director.
(2) Without prejudice to the provisions of sub-article (1),
where a director is by the memorandum or articles of a private or of
a public company required to hold a specified share qualificati on,
he shall either sign the memorandum for a number of shares notless than his qualification or sign and deliver to the Registra r for
registration an undertaking in writing to take from the company  and
pay for his qualification shares:
Provided that he shall vacate his office if he fails to obtain
his qualification within two mon ths after his appointment, or s uch
shorter time as may be fixed by  the memorandum or articles, or if
at any time thereafter he ceases to hold his qualification; and  he
shall be incapable of being reappointed director of the companyuntil he has obtained his qualification.
(3) Unless otherwise provided in the memorandum or articles
of a company, a director of a company other than the first dire ctors
shall be appointed by ordinary resolution of the company in gen eral
meeting.
(4) Where the holders of a particular class of shares have the
right to appoint one or more directors, in terms of the memoran dum
and articles of the company, such appointment shall be made by a
member or members holding in the aggregate more than fifty percent in nominal value of the shares represented and entitled to  vote
at the meeting of the holders of the shares of that class.
 92        CAP. 386. ]                         COMP ANIES
Removal of 
directors and casual vacancies.
Amended by:
IV . 2003.66.140. (1) A company may remove a director before the
expiration of his period of office by a resolution taken at a g eneral
meeting of the company and passed by a member or membershaving the right to attend and vote, holding in the aggregate s hares
entitling the holder or holders thereof to more than fifty per cent of
the voting rights attached to shares represented and entitled t o vote
at the meeting.
(2) The provisions of sub-article (1) shall apply
notwithstanding anything in the company’s memorandum orarticles or in any agreement between it and the director.
(3) On receipt of a notice of an intended resolution to remove a
director under this article the company shall forthwith send a copy
thereof to the director concerned and the director, whether or not he
is a member of the company, shall be entitled to be heard on th e
resolution at the meeting.
(4) A vacancy created by the removal of a director under this
article, if not filled at the meeting at which he is removed, m ay be
filled as a casual vacancy.
(5) Nothing in this article shall be taken as -
(a) depriving a person removed hereunder of
compensation or damages payable to him in respect ofthe termination of his appointment as director or ofany other appointment terminating with thetermination of his appointment as director; or
(b) derogating from any power to remove a director which
may exist apart from this article.
(6) ( a) Unless otherwise provided in the memorandum or
articles of a company, a casual vacancy may be filledby the continuing director or directors, and withoutprejudice to the aforesaid powers of the directors, itmay be filled by the company in general meeting.
(b) A person appointed by the directors to fill a casual
vacancy shall hold office until the next followingannual general meeting and shall be eligible for re-election, but shall not be taken into account indetermining the directors who are to retire by rotationat that meeting.
(c) A person appointed to fill a casual vacancy by the
company in general meeting shall be treated, for thepurpose of determining the time at which he or anyother director is to retire, as if he had become directoron the day on which the person in whose place he isappointed was last appointed director.
Representation of 
the company.141. (1) Where for any reason the representation of a company
ceases to be vested in any person or persons, the company shallappoint another person or persons to exercise such function. Th e
appointment shall be made by ordinary resolution taken at a gen eral
meeting notice of which shall be issued within fourteen days fr om
the date when the vacancy occurs.
                    COMP ANIES              [CAP. 386.       93
(2) The company may by ordinary resolution replace any
person or persons vested with the representation of the company .
(3) Where, and for as long as, the representation of a company
cannot be exercised in accordance with the memorandum of thecompany, any director shall represent the company in judicialproceedings against it.
Disqualification 
for appointment as director or company secretary.
Amended by:
IV . 2003.67.Substituted by:XXXI.2020.2.142. (1) A person shall not be qualified for appointment or to
hold office as director of a company or company secretary if:
(a) he is interdicted or incapacitated or is an undischarged
bankrupt;
(b) he has been convicted of any of the crimes affecting
public trust or of theft or of fraud or of knowinglyreceiving property obtained by theft or fraud;
(c) he is a minor who has not been emancipated for trade;
or
(d) he is subject to a disqualification order under article
320:
Provided that a disqualification in terms of paragraph
(b) shall remain valid:
(i) in perpetuity, if the punishment for the crime he
has been convicted of is of imprisonment forlife;
(ii) for a period of fifteen (15) years if the
punishment for the crime he has been convictedof is of imprisonment between twenty-five (25)and thirty (30) years;
(iii) for a period of ten (10) years if the punishment
for the crime he has been convicted of is ofimprisonment between ten (10) and twenty-five(25) years;
(iv) for a period of eight (8) years if the punishment
for the crime he has been convicted of is ofimprisonment between five (5) and ten (10)years;
(v) for a period of five (5) years if the punishment
for the crime he has been convicted of is ofimprisonment between four (4) and ten (10)years; and
(vi) for a period of three (3) years if the punishment
for the crime he has been convicted of is ofimprisonment for less than four (4) years:
Provided further that in any case the
disqualification period in terms of this provisoshall not be less than the term of imprisonmentthat the person would have been awarded.
(2) Notwithstanding the provisions of this Act or of the
memorandum and articles of a comp any relating to the formalitie s
of the appointment of a director or other officer and to his
 94        CAP. 386. ]                         COMP ANIES
qualification, any irregularity concerning the appointment of a
director or other officer of a company raised after the complet ion of
the publication of his appointment shall not be relied upon by the
company as against third parties unless the company proves thatsuch parties were aware of the irregularity at the relevant tim e.
(3) Third parties who were not aware of the irregularities
referred to in sub-article (2) at the relevant time may rely on  that
irregularity as against the company.
(4) The Registrar may restrict a person from being appointed
as director or company secretary of a proposed commercialpartnership or an existing company if he is or has been a direc tor or
secretary of an existing Maltese company in relation to which h e
has breached the provisions of this Act for three (3) times wit hin a
period of two (2) years, that shall be reckoned from the first breach,
and he is still in default as to one or more of such breaches.
(5) Any person who feels aggrieved by a restriction from being
appointed as director or company secretary in terms of sub-arti cle
(4) may bring an application before the court against the Regis trar
for the removal of such restriction.
Directors 
competing with company.
Amended by:
IV . 2003.68.143. (1) A director of a company may not, in competition with
the company and without the approval of the same company givenat a general meeting, carry on business on his own account or o n
account of others, nor may he be a partner with unlimited liabi lity
in another partnership or a director of a company which is incompetition with that company.
(2) Where a director acts in violation of the prohibition
contained in this article, the company may, at its option, eith er take
action for damages and interest against him or demand payment o f
any profits made by him in contravention of this article.
(3) The provisions of this article shall be without prejudice to
any other remedy which a company may have against a director fo r
breach of duty.
Prohibition of 
loans, etc. to directors.144. (1) It shall not be lawful for a company -
(a) to make a loan to any person who is its director or a
director of its parent company, or to enter into anyguarantee or provide any security in connection with aloan made to such a person as aforesaid by any otherperson:
  Provided that nothing in this paragraph shall apply
either - 
(i) to anything done, with the approval of the
company given at a general meeting, to provideany such person as aforesaid with funds to meetexpenditure incurred or to be incurred by himfor the purposes of the company or for thepurpose of enabling him properly to perform hisduties as an officer of the company; or
(ii) in the case of a company whose ordinary
business includes the lending of money or the
                    COMP ANIES              [CAP. 386.       95
giving of guarantees in connection with loans
made by other persons, to anything done by thecompany in the ordinary course of that business; 
(b) to make to any director of the company any payment
by way of compensation for loss of office, or asconsideration for or in connection with his retirementfrom office, without particulars with respect to theproposed payment, including the amount thereof,being disclosed to members of the company and theproposal being approved by the company in generalmeeting.
(2) For the purposes of this article, the expression "director"
shall include any person in accordance with whose directives orinstructions the directors of a company are accustomed to act.
Duty of director to 
disclose interest in a contract with company.145. (1) It shall be the duty of a director of a company who is
in any way, whether directly or indirectly, interested in a con tract
or proposed contract with the company to declare the nature of his
interest to the other directors either at the meeting of the di rectors
at which the question of entering into the contract is first ta ken into
consideration, or, if the director was not at the date of that meeting
interested in the contract or proposed contract, at the next me eting
of the directors held after he became so interested.
(2) Any director who fails to comply with the provisions of this
article shall be liable to a penalty.
Return as to 
changes among directors, company secretary and in representation of company.
Amended by:
XXXI. 2017.80.146. (1) Every company shall send to the Registrar for
registration a return of any change among its directors, or com pany
secretary or in the representation of the company, specifying t he
date of the change, together with the name and residence or nam e,
registered office and registration number, as the case may be, of any new
director or company secretary, within fourteen days from thehappening thereof:
Provided that the Registrar may, before registering the
return, take such steps and require such information as he maydeem necessary to ascertain the correctness of the return and t o
determine whether the provisions of this Act have been compliedwith.
(2) If default is made in complying with the provisions of sub-
article (1), every officer of the company who is in default sha ll be
liable to a penalty, and, for every day during which the defaul t
continues, to a further penalty.
Joint and several 
liability of directors for breach of duty.147. (1) The personal liability of the directors in damages for
any breach of duty shall be joint and several:
Provided that where a particular duty has been entrusted to
one or more of the directors, only such director or directors s hall be
liable in damages.
(2) A director shall not be liable for the acts of his co-direct ors
if he proves either -
(a) that he did not know of the breach of duty before or at
 96        CAP. 386. ]                         COMP ANIES
the time of its occurrence and that on becoming aware
of it after its occurrence he signified forthwith to theco-directors his dissent in writing; or
(b) that, knowing that the co-directors intended to commit
a breach of duty, he took all reasonable steps toprevent it.
Provisions as to 
liability of officers and auditors.148. (1) Any provision, whether contained in the
memorandum or articles of a company or in any contract with acompany or otherwise for exempting any officer of the company o r
any person engaged by the company as auditor from, orindemnifying him against, any liability which by virtue of any rule
of law would in the absence thereof have been attached to him i n
respect of negligence, default or breach of duty or otherwise o f
which he may be guilty in relation to the company shall be void :
Provided that a company may, in pursuance of any such
provision as aforesaid, indemnify any such officer or auditoragainst any liability incurred by him in defending any proceedi ngs
in which judgment is given in his favour or in which he isacquitted.
(2) Nothing in this article shall be construed as preventing or
restricting a company from purchasing and maintaining for any o f
its officers insurance against any such liability as is referre d to in
sub-article (1); or as preventing or restricting any officer or  auditor
of a company from personally purchasing and maintaining any suc h
insurance.
Minutes of 
proceedings.149. (1) Every company shall cause minutes of all proceedings
of general meetings and all proceedings at meetings of its dire ctors
to be entered in books kept for that purpose.
(2) Any such minute, if purporting to be signed by the
chairman of the meeting at which the proceedings were held, or by
the chairman of the next succeeding meeting, shall be evidence of
the proceedings.
(3) The books containing the minutes of proceedings of any
general meeting of a company shall be kept at the registered of fice
of the company, or at such other place as may be specified in t he
memorandum or articles, and shall, during business hours, subje ct
to such reasonable restrictions as the company may by its artic les
or in general meeting impose, be open to the inspection of anymember of the company without charge.
(4) If a company fails to comply with the requirements of sub-
articles (1) or (3), every officer of the company who is in def ault
shall be liable to a penalty.
General duty of 
officers of a company.
Amended by:
IV . 2003.69.150.  Anything required to be done by a company under any
provision of this Act shall be deemed also to be required to be  done
by the officers of the company.
                    COMP ANIES              [CAP. 386.       97
Chapter IX - Auditors
Appointment of 
auditors.
Amended by:
XXXVI. 2016.19.151. (1) A company shall, at each general meeting at which
the annual accounts are laid, appoint an auditor or auditors to  hold
office from the conclusion of that meeting until the conclusion  of
the next general meeting at which such accounts are laid. Thecompany may appoint joint auditors and references in this Act t o
auditor or auditors shall be deemed to include references to si ngle
or joint auditors as the case may be.
(2) The first auditors of the company may be appointed by the
directors at any time before the first general meeting of thecompany at which the annual accounts are laid, and the auditors  so
appointed shall hold office until the conclusion of that meetin g.
(3) If the directors fail to exercise their powers under sub-
article (2), the powers may be exercised by the company in gene ral
meeting.
(4) If no auditors are appointed or re-appointed as required by
the foregoing sub-articles of this article, the court on an app lication
made by any of the directors or by any member of the company orby the Registrar may appoint a person to fill the vacancy.
(5) In the case specified in sub-article (4), the company shall
within two weeks of the general meeting at which an auditor orauditors should have been appointed by virtue of sub-article (1 ),
give notice to the Registrar that his power to apply to the cou rt has
become exercisable.
(6) If a company fails to give the notice required by sub-articl e
(5), every officer of the company who is in default shall be li able to
a penalty, and, for every day during which the default continue s, to
a further penalty.
(7) Any contractual clause restricting the choice by the general
meeting of the company pursuant to sub-article (1) to certaincategories or lists of statutory auditors or audit firms as reg ards the
appointment of a particular statutory auditor or audit firm to carry
out the statutory audit of the company shall be prohibited. Anysuch existing clause shall be null and void.
(8) For the purposes of the application of this article, for the
appointment of auditors or audit firms by public-interest entit ies,
the conditions set out in Article 16(2) to (6) of the AuditRegulation, and those in the relative sectoral legislation regu lating
each particular type of public-interest entity, shall apply.
Duration of the 
audit engagement of public-interest entities.151A. (1)(a)A public-interest entity shall appoint an auditor or an
audit firm for an initial engagement of at least oneyear. The engagement may be renewed.
(b) Neither the initial engagement of a particular auditor
or audit firm by a public-interest entity, nor this incombination with any renewed engagements therewithshall exceed a maximum duration of ten years.
(2) After the expiry of the maximum durations of engagements
referred to in sub-article (1)( b), or after the expiry of the durations
 98        CAP. 386. ]                         COMP ANIES
of engagements extended in accordance with sub-articles (3) or (5),
neither the auditor or the audit firm nor, where applicable, an y
members of their networks within the European Union shallundertake the statutory audit of the same public-interest entit y
within the following four-year period.
(3) By way of derogation from sub-article (1), the maximum
durations referred to in sub-article (1)( b) may be extended to the
maximum duration of twenty (20) years, where a public tenderingprocess for the statutory audit is conducted in accordance with
Article 16(2) to (5) of the Audit Regulation and takes effect u pon
the expiry of the maximum durations referred to in sub-article(1)(b).
(4) The maximum durations referred to in sub-article (1)( b)
shall be extended only if, upon a recommendation of the auditcommittee, the board of directors proposes to the general meeti ng
of the company, in accordance with Maltese law, that theengagement be renewed and that proposal is approved.
(5) After the expiry of the maximum durations referred to in
sub-article (1)( b), or in sub-article (3), as appropriate, the public-
interest entity may, on an exceptional basis, request that the Board
grant an extension to re-appoint the auditor or the audit firm for a
further engagement where the conditions in sub-article (3) are met.
Such an additional engagement shall not exceed two years.
(6) ( a) The key audit partners responsible for carrying out a
statutory audit shall cease their participation in thestatutory audit of the audited entity not later thanseven (7) years from the date of their appointment.
They shall not participate again in the statutory audit
of the audited entity before three years have elapsedfollowing that cessation.
(b) The auditor or the audit firm shall establish an
appropriate gradual rotation mechanism with regard tothe most senior personnel involved in the statutoryaudit, including at least the persons who are registeredas auditors. The gradual rotation mechanism shall beapplied in phases on the basis of individuals ratherthan of the entire engagement team. It shall beproportionate in view of the scale and the complexityof the activity of the auditor or the audit firm.
(c) The auditor or the audit firm shall be able to
demonstrate to the Board that such mechanism iseffectively applied and adapted to the scale and thecomplexity of the activity of the auditor or the auditfirm.
(7) ( a) For the purposes of this article, the duration of the
audit engagement shall be calculated as from the firstfinancial year covered in the audit engagement letterin which the auditor or the audit firm has beenappointed for the first time for the carrying-out ofconsecutive statutory audits for the same public-interest entity.
                    COMP ANIES              [CAP. 386.       99
(b) For the purposes of this article, the audit firm shall
include other firms that the audit firm has acquired orthat have merged with it.
(c) If there is uncertainty as to the date on which the
auditor or the audit firm began carrying outconsecutive statutory audits for the public-interestentity, for example due to firm mergers, acquisitions,or changes in ownership structure, the auditor or theaudit firm shall immediately report such uncertaintiesto the Board.
(8) As from 17 June 2020, a public-interest entity shall not
enter into or renew an audit engagement with a given auditor oraudit firm if that auditor or audit firm has been providing aud it
services to that public-interest entity for twenty (20) and mor e
consecutive years as at 16 June 2014.
(9) As from 17 June 2023, a public-interest entity shall not
enter into or renew an audit engagement with a given auditor oraudit firm if that statutory auditor or audit firm has been pro viding
audit services to that public-interest entity for eleven (11) a nd more
but less than twenty (20) consecutive years as at 16 June 2014.
(10) Without prejudice to sub-articles (8) and (9), the audit
engagements that were entered into before 16 June 2014 but whic h
are still in place as at 17 June 2016 may remain applicable unt il the
end of the maximum duration referred to in sub-article (1)( b). Sub-
article (3) shall apply.
(11)  Article 16(3) of the Audit Regulation shall only apply to
audit engagements after the expiry of the period referred to in  sub-
article (1)( b).
Filling of casual 
vacancies.152. (1) The directors shall at any time before the general
meeting of the company at which the annual accounts are laid fi ll a
casual vacancy in the office of auditor:
Provided that the company in general meeting may fill such
a casual vacancy itself.
(2) While such a vacancy continues, any surviving or
continuing auditor or auditors may continue to act.
(3) Where it is proposed -
(a) to appoint an auditor to fill a casual vacancy in the
office of auditor by resolution of the general meeting;or
(b) to re-appoint by resolution of the general meeting a
retiring auditor who was appointed by the directors tofill a casual vacancy, as auditor, or to appoint a newauditor instead of that auditor,
notice specifying the terms of the proposed resolution shall be
given forthwith to the person proposed to be appointed and, if the
casual vacancy was caused by the resignation of an auditor, to the
auditor who resigned.
 100        CAP. 386. ]                         COMP ANIES
(4) Any director who fails to comply with the provisions of
sub-article (1) shall be liable to the same penalty as that pro vided
for in article  151(6).
Rules on auditor 
independence and professional ethics.Substituted by:IX. 2008.15.Cap. 281.153. An auditor must at all times adhere to the rules on
independence and professional ethics set out in the Code of Eth ics
and any other regulations, directives or guidelines issued from  time
to time in terms of the Accountancy Profession Act.
Right to 
information.
Amended by:
L.N. 425 of 2007.154. (1) The auditors of a company shall have a right of access
at all times to the company’s accounting records, accounts andvouchers, and shall be entitled to require from the company’sofficers such information and explanations as they think necess ary
for the performance of their duties as auditors.
(2) An officer of a company who knowingly or recklessly
makes to the company’s auditors a statement, whether written ororal which - 
(a) conveys or purports to convey any information or
explanations which the auditors require, or are entitledto require, as auditors of the company; and
(b) is misleading, false or deceptive in a material
particular; 
shall be guilty of an offence and liable on conviction to a fin e
(multa ) of not more than four thousand and six hundred and fifty-
eight euro and seventy-five cents (4,658.75) or to imprisonment  for
a term not exceeding six months or to both such fine andimprisonment.
(3) A subsidiary undertaking which is registered in Malta, and
the auditors of such an undertaking, shall give to the auditors  of
any parent company of the subsidiary undertaking such informati on
and explanations as they may reasonably require for the purpose s
of their duties as auditors of that company. If a subsidiaryundertaking fails to comply with the provisions of this sub-art icle,
every officer thereof who is in default shall be liable to a pe nalty;
and if an auditor fails without reasonable cause to comply with  this
sub-article he shall be liable to a penalty.
(4) A parent company having a subsidiary undertaking which is
not registered in Malta shall, if required by its auditors to d o so,
take all such steps as are reasonably open to it to obtain from  the
subsidiary undertaking such information and explanations as the y
may reasonably require for the purposes of their duties as audi tors
of that company. If a parent company fails to comply with theprovisions of this sub-article, e very officer of the company wh o is
in default shall be liable to a penalty.
Right to attend 
company meetings.155.  A company’s auditors shall be entitled - 
(a) to receive all notices of, and other communications
relating to, any general meeting which a member ofthe company is entitled to receive;
(b) to attend any general meeting of the company; and
                    COMP ANIES              [CAP. 386.       101
(c) to be heard at any general meeting which they attend
on any part of the business of the meeting whichconcerns them as auditors.
Remuneration of 
auditors.
Amended by:
IX. 2008.16;III. 2009.22.156. (1) The remuneration of auditors appointed by the
company in general meeting shall be fixed by the company ingeneral meeting or in such manner as the company in generalmeeting may determine. The remuneration of auditors appointed b y
the directors or the court shall be fixed by the directors or t he court
as the case may be.
(2) There shall be stated in the notes to the accounts the amoun t
of the remuneration of the company’s auditors in their capacity  as
such; and where consolidated accounts are prepared, the notes t o
the consolidated accounts shall state the total remuneration pa id to
the auditors of the parent company in respect of all undertakin gs
included in the consolidation, and also the total remuneration paid
to all other auditors in respect of such undertakings.
(3) For the purposes of this article "remuneration" includes
sums paid in respect of expenses.
(4) The provisions of this article shall apply in relation to
benefits in kind as to payments in cash, and in relation to any  such
benefit references to its amount are to its estimated money val ue.
The nature of any such benefit shall also be disclosed.
(5) There shall also be stated in the notes to the accounts
separately the total fees charged by the auditor for:
(a) other assurance services;
(b) tax advisory services; and
(c) other non-audit services.
(6) The provisions of sub-article (5) shall not apply:
(a) where an undertaking is included within the
consolidated accounts of another undertaking and theinformation required by sub-article (5) is provided inthe notes to such consolidated accounts; or
(b) to a company which on its balance sheet date does not
exceed the limits of two out of the three criteria set out in
article 185(1)( a). Notwithstanding the provisions of this
paragraph, the Accountancy Board established in termsof the 
Accountancy Profession Act may request the
information specified in sub-article (5) to be delivered toit within such period as it may establish for that purpose.
Cap. 281.(7) The provisions of sub-article (6) shall not apply to a publi c
interest entity as defined in the Accountancy Profession Act.
Removal of 
auditors.
Amended by:
IX. 2008.17;XXXVI. 2016.21.157. (1) Notwithstanding anything in a company’s
memorandum or articles or in any other agreement, the companymay at any time remove an auditor from office in the same manne r
as that specified in article 140(1):
Provided that an auditor may only be removed from office
as aforesaid if there is a proper ground for dismissal:
 102        CAP. 386. ]                         COMP ANIES
Provided further that divergence of opinions on accounting
treatments or audit procedures shall not constitute a proper gr ound
for dismissal.
(2) ( a) Where a resolution removing an auditor is passed at a
general meeting of a company, the company shallwithin fourteen days give notice thereof to theRegistrar for registration. The company shall also,within the same period, deliver to the Board astatement by the company giving an adequateexplanation of the reasons for the removal of theauditor. If a company fails to give the aforesaid noticeto the Registrar or the aforesaid statement to the Board,every officer of the company who is in default shall beliable to a penalty in respect of each default, and forevery day during which the default continues, to afurther penalty.
Cap. 281.(b) For the purposes of this sub-article, the Board shall
have the meaning assigned to it by the Accountancy
Profession Act.
(3) Nothing in this article shall be taken as depriving a person
removed under its provisions of compensation for damages payabl e
to him in respect of the termination of his appointment as audi tor or
of any appointment terminating with that of auditor.
(4) An auditor of a company who has been removed shall have,
notwithstanding his removal, the rights conferred by article 15 5 in
relation to any general meeting of the company - 
(a) at which his term of office would otherwise have
expired; or
(b) at which it is proposed to fill the vacancy caused by
his removal.
  In such a case the references in that article to matters
concerning the auditor as auditor shall be construed as referen ces to
matters concerning him as a former auditor.
(5) In the case of a statutory audit of a public-interest entity , it
shall be permissible for -
(a) shareholders representing five per cent or more of the
voting rights or of the share capital of the company; or
(b) the Board referred to in sub-article (2),
to bring a claim before the court for the dismissal of the stat utory
auditor(s) or the audit firm(s) where there are proper grounds for so
doing.
Rights of auditors 
who are removed or not re-appointed.158. (1) Notice specifying the text of and reasons for a
proposed resolution of a general meeting of a company whereby i t
is intended to - 
(a) remove an auditor before the expiration of his term of
office; or
(b) appoint as auditor a person other than a retiring
                    COMP ANIES              [CAP. 386.       103
auditor; 
shall be sent forthwith by the company to the person proposed t o be
removed, to the person proposed to be appointed and to the reti ring
auditor, as the case may be.
(2) The auditor proposed to be removed or, as the case may be,
the retiring auditor may make with respect to the intendedresolution representations in writing to the company not exceed ing
a reasonable length and request their notification to members o f the
company.
(3) The company shall, unless the representations are received
by it too late for it to do so -
(a) in any notice of the resolution given to members of the
company, state the fact of the representations havingbeen made; and
(b) send a copy of the representations to every member of
the company to whom notice of the meeting is or hasbeen sent. 
(4) If a copy of any such representations is not sent out as
required because it was received too late or because of thecompany’s default, the auditor may, without prejudice to his ri ght
to be heard orally, require that the representations be read ou t at the
meeting.
Resignation of 
auditor.
Amended by:
XV . 2007.9;IX. 2008.18.Cap. 281.159. (1) Without prejudice to the notification obligations in
terms of article 17 of the Accountancy Profession Act, an auditor of
a company may resign his office by depositing a notice in writi ng
to that effect at the company’s registered office. The notice s hall
not be effective unless it is accompanied by the statement requ ired
by article 161.
(2) An effective notice of resignation shall operate to bring th e
auditor’s term of office to an end as of the date on which the notice
is deposited or on such later date as may be specified in it.
(3) The company shall within fourteen days of the deposit of a
notice of resignation give notice thereof to the Registrar forregistration. If default is made in complying with this sub-art icle,
every officer of the company who is in default shall be liable to a
penalty, and, for every day during which the default continues,  to a
further penalty.
Rights of resigning 
auditor.160. (1) The provisions of this article shall apply where an
auditor’s notice of resignation is accompanied by a statement o f
circumstances which he considers should be brought to theattention of members or creditors of the company.
(2) The resigning auditor may deposit with the notice a signed
requisition calling on the directors of the company forthwith d uly
to convene an extraordinary general meeting of the company for the
purpose of receiving and considering such explanation of thecircumstances connected with his resignation as he may wish toplace before the meeting.
 104        CAP. 386. ]                         COMP ANIES
(3) The resigning auditor may request the company to circulate
to its members -
(a) before the meeting convened on his requisition; or
(b) before any general meeting at which his term of office
would otherwise have expired or at which it isproposed to fill the vacancy caused by his resignation;
a statement in writing of the circumstances connected with his
resignation as referred to in sub-article (1).
(4) The company shall, unless the statement is received too late
for it to comply - 
(a) in any notice of the meeting given to members of the
company, state the fact of the statement having beenmade; and 
(b) send a copy of the statement to every member of the
company to whom notice of the meeting is or has beensent.
(5) If the directors do not within twenty-one days from the date
of the deposit of a requisition under this article proceed duly  to
convene a meeting for a day not more than twenty-eight days aft er
the date on which the notice convening the meeting is given, ev ery
director who failed to take all reasonable steps to secure that  a
meeting was convened as mentioned in sub-article (2) shall beliable to a penalty.
(6) If a copy of the statement is not sent out as required
because it was received too late or because of the company’sdefault, the auditor may, without prejudice to his right to be heard
orally, require that the statement be read out at the meeting.
(7) An auditor who has resigned has, notwithstanding his
resignation, the rights conferred by article 155 in relation to  any
such general meeting of the company as is mentioned in sub-arti cle
(3)(a) or ( b), and, in such a case, the references in that article to
matters concerning the auditor as auditor shall be construed asreferences to matters concerning him as a former auditor.
Statement by 
person ceasing to hold office as auditor.161. (1) Where an auditor ceases for any reason to hold office,
he shall deposit at the company’s registered office a statement  of
any circumstances connected with his ceasing to hold office whi ch
he considers should be brought to the attention of the members or
creditors of the company or, if he considers that there are no such
circumstances, a statement that there are none.
(2) In the case of resignation, the statement shall be deposited
along with the notice of resignation; in the case of failure to  seek
re-appointment, the statement shall be deposited not less thanfourteen days before the general meeting at which auditors are to be
reappointed; in any other case, the statement shall be deposite d not
later than the end of the period of fourteen days beginning wit h the
date on which the auditor ceases to hold office.
(3) Where the statement is of circumstances which the auditor
requests to be brought to the attention of the members or credi tors
                    COMP ANIES              [CAP. 386.       105
of the company, the company shall within fourteen days of the
deposit of the statement either -
(a) send a copy of it to every person who under article 180
is entitled to be sent copies of the annual accounts; or 
(b) submit an application to the court for an order that
there are grounds of sufficient gravity to warrant thatthe statement should not be circulated.
(4) Where the company submits an application to the court, the
court shall notify the auditor of the application and shall hea r both
parties before making a decision on the company’s application.
(5) Unless the auditor receives notice of such an application
before the end of the period of twenty-one days beginning with the
day on which he deposited the st atement, he shall within a furt her
seven days send a copy of the statement to the Registrar.
(6) If the court is satisfied that the auditor is using the
statement to secure needless publicity for defamatory matter -
(a) it shall direct that copies of the statement need not be
sent out; and
(b) it may further order the company’s costs on the
application to be paid in whole or in part by theauditor, notwithstanding that he is not a party to theapplication;
and the company shall within fourteen days of the court’s decis ion
send to the persons mentioned in sub-article (3)( a) a statement
setting out the effect of the order.
(7) If the court is not so satisfied, the company shall within
fourteen days of the court’s decision - 
(a) send copies of the statement to the persons mentioned
in sub-article (3)(a); and
(b) notify the auditor of the court’s decision, 
and the auditor shall within seven days of receiving such notic e
send a copy of the statement to the Registrar.
Failure to comply 
with article 161.162. (1) If a person ceasing to hold office as auditor fails
without just cause to comply with the provisions of article 161  he
shall be liable to a penalty.
(2) In proceedings for a default under sub-article (1) it shall be
a defence for the person against whom action is taken to show t hat
he took all reasonable steps and exercised all due diligence to  avoid
that default.
(3) If a company makes default in complying with the
provisions of article 161, every officer of the company who is in
default shall be liable to a penalty, and, for every day during  which
the default continues, to a further penalty.
Chapter X - Accounts, Audit and Annual Return
 106        CAP. 386. ]                         COMP ANIES
Keeping of 
accounting records.
Amended by:
L.N. 425 of 2007.Cap. 13.163. (1) In lieu of the requirements of articles 13 to 18 of the
Commercial Code a company shall be required to keep proper
accounting records with respect to - 
(a) all sums of money received and expended by the
company and the matters in respect of which thereceipt and expenditure takes place;
(b) the assets and liabilities of the company;
(c) if the company’s business involves dealing in goods:
(i) statements of stocks held by the company at the
end of each accounting period of the company;
(ii) all statements of stocktakings from which any
such statement of stocks as is mentioned in sub-paragraph (i) has been or is to be prepared; and
(iii) except in the case of goods sold by way of
ordinary retail trade, statements of all goods soldand purchased, showing the goods and thebuyers and sellers in sufficient detail to enableall these to be identified.
(2) For the purposes of sub-article (1), proper accounting
records shall be deemed to have been kept with respect to thematters aforesaid if such records are sufficient to show and ex plain
the company’s transactions and are such as to - 
(a) disclose with reasonable accuracy, at any time, the
financial position of the company at that time; and
(b) enable the directors to ensure that any balance sheet
and profit and loss account prepared under thisChapter complies with the requirements of this Act.
(3) The accounting records shall be kept at the registered offic e
of the company or at such other place as the directors think fi t, and
shall be at all times open to inspection by the officers of thecompany:
Provided that if accounting records are kept at a place
outside Malta there shall be sent to, and kept at a place in Ma lta and
at all times be open to the inspection of the officers of the c ompany
such accounts and returns with respect to the business dealt wi th in
the accounting records so kept as will disclose with reasonableaccuracy the financial position of that business at intervals n ot
exceeding six months and will enable to be prepared, in accorda nce
with this Act, the company’s balance sheet and its profit and l oss
account.
(4) A parent company which has a subsidiary undertaking, in
relation to which the above requirements do not apply, shall ta ke
reasonable steps to secure that the subsidiary undertaking keep s
such accounting records as to enable the directors of the paren t
company to ensure that any balance sheet and profit and lossaccount prepared complies with the requirements of this Act.
Cap. 13.(5) Notwithstanding the provisions of article 26 of the
Commercial Code, the accounting records of the company shall be
kept for a period of ten years:
                    COMP ANIES              [CAP. 386.       107
Provided that where the accounting records are kept in a
bound or unified form, the ten years shall commence to run fromthe date of the last entry made therein.
(6) If a company fails to comply with any provision of sub-
articles (1) to (4), every officer of the company who is in def ault
shall be guilty of an offence and liable on conviction to a fin e
(multa ) of not more than eleven thousand and six hundred and
forty-six euro and eighty-seven cents (11,646.87), unless he sh ows
that he acted diligently and that, in the circumstances in whic h the
company’s business was carried on, the default was excusable.
(7) If a company fails to comply with the provisions of sub-
article (5), every officer of the company who is in default sha ll be
liable to a penalty.
Accounting 
reference period and accounting reference date.164. (1) A company’s accounting periods are determined by
reference to its accounting reference date.
(2) A company may give notice in the prescribed form to the
Registrar specifying a date in the calendar year as being itsaccounting reference date:
Provided that no such notice shall have effect unless it is
given before the end of nine months beginning with the date of the
company’s registration; and, failing such notice, the company’saccounting reference date shall be the thirty-first of December .
(3) A company’s first accounting reference period shall be such
period ending with its accounting reference date as begins on t he
date of its registration and is a period of not less than six m onths
and not more than eighteen months; and each successive period o f
twelve months beginning after the end of the first accountingreference period and ending with the accounting reference dateshall also be an accounting reference period of the company.
(4) A company’s first accounting period shall commence on the
first day of its first accounting reference period and shall en d on a
date not more than seven days before or after the end of thataccounting reference period as the directors may determine.Subsequent accounting periods shall commence on the dayimmediately following the company’s previous accounting periodand shall end on a date not more than seven days before or afte r the
end of the next accounting reference period as the directors ma y
determine.
(5) The directors of a parent company shall secure that, except
where there are good reasons against it, the accounting period of
each of its subsidiary undertakings shall coincide with the par ent
company’s own accounting period.
Alteration of 
accounting reference period.
Amended by:
IV . 2003.70.165. (1) At any time during a period which is an accounting
reference period of a company by virtue of article 164 or 166 t he
company may give notice in the prescribed form to the Registrarspecifying a date in the calendar year ("the new accountingreference date") on which that accounting reference period ("th e
current accounting reference period") and each subsequentaccounting reference period of the company is to be treated as
 108        CAP. 386. ]                         COMP ANIES
coming to an end or, as the case may require, as having come to  an
end.
(2) At any time after the end of a period which was an
accounting reference period of a company by virtue of article 1 64
or 166 the company may give notice in the prescribed form to th e
Registrar specifying a date in the calendar year ("the newaccounting reference date") on which that accounting referenceperiod ("the previous accounting reference period") and eachsubsequent accounting reference period of the company is to betreated as coming or, as the case may require, as having come t o an
end.
(3) A notice under sub-article (2), shall, however -
(a) have no effect unless the company is a subsidiary
undertaking or parent company of another companyand the new accounting reference date coincides withthe accounting reference date of that other company;and
(b) have no effect if the period allowed under article 182
for delivery of the annual accounts in relation to theprevious accounting period to be laid before thecompany in general meeting has already expired at thetime when the notice is given.
(4) A notice under this article shall state whether the current or
previous accounting reference period of the company -
(a) is to be treated as shortened, so as to come to an end
or, as the case may require, be treated as having cometo an end on the new accounting reference date on thefirst occasion on which that date falls or fell after thebeginning of that accounting reference period; or
(b) is to be treated as extended, so as to come to an end or,
as the case may require, be treated as having come toan end on the new accounting reference date on thesecond occasion on which that date falls or fell afterthe beginning of that accounting reference period.
(5) A notice which states that the current or previous
accounting reference period is to be extended shall have no eff ect if
the current or previous accounting reference period, as extende d in
accordance with the notice, would exceed eighteen months.
(6) Subject to any direction given by the Registrar under sub-
article (7), a notice which states that the current or previousaccounting reference period is to be extended shall have no eff ect
unless - 
(a) no earlier accounting reference period of the company
has been extended by virtue of a previous notice givenby the company under this article; or
(b) the notice is given not less than five years after the
date on which any earlier accounting reference periodof the company which was so extended came to anend; or
                    COMP ANIES              [CAP. 386.       109
(c) the company is a subsidiary undertaking or parent
company of another undertaking and the newaccounting reference date coincides with theaccounting reference date of that other undertaking.
(7) The Registrar may, if he thinks fit, direct that the provisi ons
of sub-article (6) shall not apply to a notice already given by  a
company under this article or, as the case may be, in relation to a
notice which may be so given.
Consequence of 
giving notice under article 165.166. (1) Where a company has given notice with effect in
accordance with article 165 and that notice has not been supers eded
by a subsequent notice by the company which has such effect, th e
new date specified in the notice shall be the company’s account ing
reference date in substitution for that which, by virtue of art icle 165
or this article, was its accounting reference date at the time when
the notice was given.
(2) Where by virtue of a notice as is referred to in sub-article
(1) one date is substituted for another as the accounting refer ence
date of a company - 
(a) the current or previous accounting reference period,
shortened or extended, as the case may be, inaccordance with the notice; and
(b) each successive period of twelve months beginning
after the end of that accounting reference period, as soshortened or extended, and ending with the newaccounting reference date,
shall be treated as having been an accounting reference period of
the company, instead of any period which would have been anaccounting reference period of the company if the notice had no t
been given.
(3) The provisions of article 165 and the provisions of this
article shall not affect any accounting reference period of thecompany which - 
(a) in the case of a notice under article 165(1) is earlier
than the current accounting reference period; or
(b) in the case of a notice under article 165(2) is earlier
than the previous accounting reference period.
General provisions 
as to content and form of individual accounts.
Amended by:
IV . 2003.71;IX. 2008.19;XXXI. 2015.5.167. (1) The directors of every company shall prepare for each
accounting period individual accounts comprising the balance sh eet
as at the last day of the accounting period to which they refer , the
profit and loss account for that period, the notes to the accou nts and
any other financial statements and other information which may be
required by generally accepted accounting principles and practi ce.
These documents shall constitute a composite whole. The name,
registration number, legal form and registered office address o f the
company and where appropriate, the fact that the company is bei ng
wound up shall be indicated in these accounts.
(2) The individual accounts shall be drawn up clearly in
accordance with generally accepted accounting principles and
 110        CAP. 386. ]                         COMP ANIES
practice and the provisions of this Act including, where applic able,
the requirements of the Third Schedule.
(3) The individual accounts shall give a true and fair view of
the undertaking’s assets, liabilities, financial position and p rofit or
loss. Where the application of this Act would not be sufficient  to
give a true and fair view of the undertaking’s assets, liabilit ies,
financial position and profit or loss, such additional informat ion as
is necessary to comply with that requirement shall be given in the
notes to the financial statements.
(4) Where the application of the provisions of this Act would
not be sufficient to give a true and fair view within the meani ng of
sub-article (3), additional information shall be given.
(5) Where in exceptional cases the application of a provision of
this Act is incompatible with the obligation for the individualaccounts to give a true and fair view, that provision shall bedeparted from in order to give a true and fair view. Any suchdeparture shall be disclosed in the notes to the accounts toget her
with an explanation of the reasons for it and a statement of it s
effect on the assets, liabilities, financial position and profi t or loss.
Annual accounts of 
certain types of undertakings.
Amended by:
XVII. 1998.70;IV . 2003.72;IX. 2008.20;XXXI. 2015.6.Cap. 371.Cap. 376.Cap. 403.168. (1) The provisions of this Chapter and the Schedules
enacted under it shall apply only to the extent that they are n ot
inconsistent with, or contradicted by provisions on the financi al
reporting of certain types of undertakings or provisions regard ing
the distribution of an undertaking’s capital which are laid dow n in
other legislative acts in force in Malta.
Cap. 371.
Cap. 376.(2) Banks and financial institutions shall follow the Banking
Rules and Financial Institutions Rules issued by the relevantcompetent authority under the 
Banking Act and the Financial
Institutions Act, respectively, in relation to the form and content of
their annual accounts and any other Rules issued by the compete nt
authority in this regard.
Cap. 403.(3) Insurance and reinsurance undertakings shall comply with
any Insurance Rules made under the Insurance Business Act in
respect of their annual accounts.
(4) Special provisions may be prescribed by the Minister by
notice in the Gazette for the annual accounts of investmentcompanies with fixed share capital in lieu of the provisions of  the
Third Schedule. 
Accounts of 
investment company with variable capital.
Amended by:
IV . 2003.73;IX. 2008.21.169. (1) An investment company with variable share capital
shall prepare its individual accounts in accordance with the fo rmat
set out in the Fifth Schedule.
(2) The director’s report of an investment company with
variable share capital shall provide information sufficient to enable
investors to make an informed judgment on the development of th e
company’s activities and its financial performance.
(3) In all other respects, the annual accounts and director’s
                    COMP ANIES              [CAP. 386.       111
report of an investment company with variable share capital sha ll
be prepared in accordance with the provisions applicable tocompanies generally to the extent that they are not inconsisten t
with the provisions of the preceding sub-articles of this artic le and
the Fifth Schedule.
Duty to prepare 
consolidated accounts.
Amended by:
X. 2011.69;XXXI. 2015.7.170. (1) If at the end of an accounting period a company is a
parent company the directors shall, as well as preparing theindividual accounts for that company, also prepare consolidatedaccounts.
(2) A parent company and all of its subsidiary undertakings
shall be undertakings to be consolidated regardless of where th e
registered offices or principal offices of such subsidiaryundertakings are situated.
(3) A subsidiary undertaking may be excluded from
consolidation if its inclusion is not material for the purpose of
giving a true and fair view; but two or more subsidiaryundertakings may be excluded only if their inclusion is not mat erial
when taken together.
(4) A subsidiary undertaking may be excluded from
consolidation where - 
(a) severe long-term restrictions substantially hinder the
exercise of the rights of the parent company over theassets or management of that undertaking; or
(b) the interest of the parent company is held exclusively
with a view to subsequent resale and the undertakinghas not previously been included in consolidatedaccounts prepared by the parent company; or
(c) in extremely rare cases, where the information
necessary for the preparation of consolidated accountsin accordance with the provisions of this Act cannot beobtained without disproportionate expense or unduedelay.
The reference in paragraph ( a) to the rights of the parent
company and the reference in paragraph ( b) to the interest of the
parent company are, respectively, to rights and interests held by or
attributed to the company for the purposes of article 2(2) in t he
absence of which it would not be the parent company.
(5) Where all the subsidiary undertakings of a parent company
fall within the above exclusions, no consolidated accounts shal l be
required.
Form and content 
of consolidated accounts.
Amended by:
IV . 2003.74;IX. 2008.22;XXXI. 2015.8.171. (1) Consolidated accounts shall comprise the
consolidated balance sheet as at the last day of the accountingperiod to which these refer, the consolidated profit and loss a ccount
for that period, the notes to the consolidated accounts and any  other
financial statements which may be required by generally accepte d
accounting principles and practice. These documents shallconstitute a composite whole.
(2) Without prejudice to articles 170, 173 and 174, and to the
 112        CAP. 386. ]                         COMP ANIES
provisions of article 2(2) and the Ninth Schedule, insofar as m ay be
relevant to articles 170, 173 and 174, the consolidated account s
shall be drawn up in accordance with generally acceptedaccounting principles and practice and the provisions of this A ct
including, where applicable, the requirements of the ThirdSchedule:
Provided that the disclosure in indent (ii) of sub-paragraph
(1) of paragraph 3 of Part I of the Third Schedule shall apply to the
consolidated accounts as if the undertakings included in theconsolidation were a single company and the disclosures in inde nts
(iv) and (vi) of sub-paragraph (1) of paragraph 2 of Part II of  the
Third Schedule shall apply to the consolidated accounts.
(3) Consolidated accounts shall give a true and fair view of the
assets, liabilities, financial position and profit or loss of t he
undertakings included therein taken as a whole.
(4) Where the application of the provisions of this Act would
not be sufficient to give a true and fair view within the meani ng of
sub-article (3), additional information shall be given.
(5) Where in exceptional cases the application of a provision of
this Act is incompatible with the obligation for the consolidat ed
accounts to give a true and fair view, that provision shall bedeparted from in order to give a true and fair view. Any suchdeparture shall be disclosed in the notes to the consolidatedaccounts together with an explanation of the reasons for it and  a
statement of its effect on the assets, liabilities, financial p osition
and profit and loss.
Responsibility and 
liability for drawing up and publishing the financial statements and the directors’ report.
Substituted by:
XXXI. 2015.9.172. The directors of a company , acting within the competences
assigned to them by law, have collective responsibility for ens uring
that:
(a) the annual financial statements, the directors’ report
and, when provided separately, the corporategovernance statement; and
(b) the consolidated financial statements, consolidated
directors’ reports, and when provided separately, theconsolidated corporate governance statement,
are drawn up and published in accordance with the requirements of
this Act.
Consolidated 
accounts - size exemption.
Amended by:
IV . 2003.75;IX. 2008.23;III. 2013.69;XXXI. 2015.10.173. A parent company shall be exempt from the requirements
to prepare consolidated accounts if as at its balance sheet dat e the
undertakings to be consolidated do not together, on the basis o f
their latest individual accounts, exceed the limits of two of t he
three criteria laid down in article 185(5):
Provided that none of the undertakings to be consolidated is
a company the securities of which have been admitted to trading  on
a regulated market or on an equivalent market in a non-MemberState or non-EEA State:
Provided further that none of the group companies is a
public-interest entity.
                    COMP ANIES              [CAP. 386.       113
Exemption for 
parent companies included in accounts of larger groups.
Amended by:
IV . 2003.76;IX. 2008.24;XXXI. 2015.11.174. (1) A parent company shall be exempt from the
requirement to prepare consolidated accounts if it is itself asubsidiary company in the following cases - 
(a) where the said parent company is a wholly-owned
subsidiary company of an immediate parent companyformed and registered under the law of a Member Stateor an EEA State; or
(b) where more than fifty per cent in nominal value of the
shares in the said parent company are held by a parentcompany and notice requesting the preparation ofconsolidated accounts has not been served on the firstmentioned company by shareholders holding in theaggregate not less than ten per cent in nominal value ofall the shares thereof. Such notice shall not be validunless it is served not later than six months after thecommencement of the accounting period to which itrelates.
(2) The exemption referred to in sub-article (1) shall be
conditional upon compliance with all of the followingrequirements - 
(a) that in the case of a parent company which is itself a
subsidiary company of a parent company formed andregistered under the law of a Member State or an EEAState, such company is included in consolidatedaccounts for a larger group drawn up to the same date,or to an earlier date in the same accounting period, bya parent company formed and registered under the lawof a Member State or an EEA State;
(b) that in the case of a parent company which is itself a
subsidiary company of a parent undertaking notregistered under the law of a Member State or an EEAState, the exempted undertaking is included inconsolidated accounts for a larger group drawn up tothe same date, or to an earlier date in the sameaccounting period, provided such consolidatedaccounts and the director’s report thereon are drawn upin a manner equivalent to that required by this Act andhave been audited by one or more persons authorisedto audit accounts under the national law governing theundertaking which drew them up;
(c) that the said parent company discloses in its individual
accounts that it is exempt from the obligation toprepare and deliver consolidated accounts;
(d) that the said parent company states in its individual
accounts the name and registered office of the parentundertaking which draws up the consolidated accountsreferred to in paragraph ( a) or ( b);
(e) that the said parent company delivers to the Registrar
within the period allowed for delivering its individualaccounts, copies of the consolidated accounts referredto in paragraph ( a) or ( b), and of the parent
 114        CAP. 386. ]                         COMP ANIES
undertaking’s directors’ report or its equivalent,
together with the auditors’ report on thoseconsolidated accounts; and
(f) that if any document comprised in accounts and
reports delivered in accordance with paragraph ( e) is in
a language other than Maltese or English, there isannexed to the copy of that document a translation of itinto Maltese or English, certified to be a correcttranslation in such manner as may be prescribed.
(3) The exemption shall not apply to a parent company any of
whose transferable securities have been admitted to trading on a
regulated market or on an equivalent market in a non-Member Sta te
or non-EEA State.
(4) Shares held by directors of a company for the purpose of
complying with any share qualification requirement shall bedisregarded in determining for the purposes of sub-article (1)( a)
whether the company is a wholly-owned subsidiary company.
(5) For the purposes of sub-article (1)( b) shares held by a
wholly-owned subsidiary undertaking of the parent undertaking, or
held on behalf of the parent company or a wholly-owned subsidia ry
undertaking, shall be attributed to the parent company.
Disclosure 
required in notes to accounts.Substituted by:III. 2009.23.175. (1) Individual accounts prepared in terms of article 167
shall, in the notes to the accounts, disclose the information r equired by
generally accepted accounting principles and practice together with
such other information required to be disclosed therein by this  Act.
(2) Consolidated accounts prepared in terms of article 170
shall, in the notes to the accounts, disclose the information r equired
by generally accepted accounting principles and practice togeth er
with such other information required to be disclosed therein by  this
Act.
Approval and 
signing of annual accounts.176. (1) A company’s annual accounts shall be approved by
the board of directors and the balance sheet shall be dated andsigned on behalf of the board by two directors of the company.
(2) Every copy of the balance sheet which is laid before the
company in general meeting, or which is otherwise circulated,published or issued, shall state the name of the directors whosigned the balance sheet on behalf of the board.
(3) The copy of the company’s balance sheet which is delivered
to the Registrar shall be signed on behalf of the board by the same
directors who signed the balance sheet pursuant to sub-article (1).
(4) If annual accounts are approved which do not comply with
the provisions of this Act, every director of the company who i s
party to their approval and who knows that they do not comply o r is
negligent as to whether they comply shall be liable to a penalt y. For
this purpose every director of the company at the time the acco unts
are approved shall be taken to be a party to their approval unl ess he
proves that he took all reasonable steps to prevent their beingapproved.
                    COMP ANIES              [CAP. 386.       115
(5) If a copy of the annual accounts -
(a) is laid before the company, or otherwise circulated,
published or issued, without having been signed asrequired by this article or without the requiredstatement of the signatory’s name being included; or
(b) is delivered to the Registrar without being signed as
required by this article,
every officer of the company who is in default shall be liable to a
penalty. 
Contents of the 
directors’ report.
Amended by:
XXXI. 2015.12.177. (1) For each accounting period the directors shall prepare
a report, hereinafter referred to as "the directors’ report".
(2) The directors’ report shall state the names of the persons
who, at any time during the accounting period, were directors o f the
company, the principal activities of the company and itssubsidiaries in the course of the accounting period and anysignificant change in those activities during such period, and a fair
review of the development of the business of the company and it s
subsidiaries during the accounting period, and of their positio n at
the end of that period together with a description of the princ ipal
risks and uncertainties that they face.
The review shall be a balanced and comprehensive analysis
of the development and performance of the undertaking’s busines s
and of its position, consistent with the size and complexity of  the
business.
To the extent necessary for an understanding of the
undertaking’s development, performance or position, the analysi s
shall include both financial and, where appropriate, non-financ ial
key performance indicators relevant to the particular business,including information relating to environmental and employeematters. In providing the analysis, the directors’ report shall , where
appropriate, include references to, and additional explanations  of,
amounts reported in the annual financial statements.
(3) The directors’ report shall furthermore comply with the
Sixth Schedule as regards the disclosure of the matters mention ed
therein.
(4) In the case of default in complying with the provisions of
this article, every person who was a director of the companyimmediately before the end of the period for laying annual acco unts
for the relevant accounting period shall be liable to a penalty . In
proceedings against a person under this sub-article, it shall b e a
defence for him to prove that he took all reasonable steps forsecuring compliance with the requirements of this article.
(5) The consolidated directors’ report shall, as a minimum, in
addition to any other information required under other provisio ns
of this Act, set out the information required by this article a nd the
Sixth Schedule, taking account of the essential adjustmentsresulting from the particular characteristics of a consolidateddirectors’ report as compared to a directors’ report in a way w hich
facilitates the assessment of the position of the undertakings
 116        CAP. 386. ]                         COMP ANIES
included in the consolidation taken as a whole.
(6) Where a consolidated directors’ report is required in
addition to the directors’ report, the two reports may be prese nted
as a single report.
Approval and 
signing of directors’ report.178. (1) The directors’ report shall be approved by the board
of directors and dated and signed on behalf of the board by twodirectors of the company.
(2) Every copy of the directors’ report which is laid before the
company in general meeting, or which is otherwise circulated,published or issued, shall state the name of the person who sig ned it
on behalf of the board.
(3) The copy of the directors’ report which is delivered to the
Registrar shall be signed and dated on behalf of the board by adirector or the company secretary of the company.
(4) If a copy of the directors’ report -
(a) is laid before the company, or otherwise circulated,
published or issued, without the report having beensigned as required by this article or without therequired statement of the signatory’s name beingincluded; or
(b) is delivered to the Registrar without being signed as
required by this article,
every officer of the company who is in default shall be liable to a
penalty. 
Auditors’ report.
Amended by:
IV . 2003.77;IX. 2008.25;XXXI. 2015.13;XXXVI. 2016.22;LIV . 2016.4.179. (1) A company’s auditors shall make a report to the
company’s members on all annual accounts of the company ofwhich copies are to be laid before the company in general meeti ng
during their tenure of office.
(2) The auditors’ report shall be drawn up in accordance with
generally accepted auditing standards and shall state whether i n the
auditors’ opinion the annual accounts have been properly prepar ed
in accordance with this Act, and in particular whether a true a nd
fair view is given -
(a) in the case of an individual balance sheet, of the state
of affairs of the company as at the end of theaccounting period;
(b) in the case of an individual profit and loss account, of
the profit or loss of the company for the accountingperiod;
(c) in the case of consolidated accounts, of the state of
affairs as at the end of the accounting period, and theprofit or loss for the accounting period, of theundertakings included in the consolidation as a whole,so far as concerns members of the company.
(3) The auditors shall consider whether the information given
in the directors’ report for the accounting period for which th e
annual accounts are prepared is consistent with those accounts;  and
                    COMP ANIES              [CAP. 386.       117
if they are of the opinion that it is not they shall state that  fact in
their report.
The auditors shall also:
(a) express an opinion on whether the directors’ report has
been prepared in accordance with the applicable legalrequirements;
(b) state whether, in the light of the knowledge and
understanding of the undertaking and its environmentobtained in the course of the audit, they have identifiedmaterial misstatements in the directors’ report, andshall give an indication of the nature of any suchmisstatements:
Provided that the requirement mentioned in paragraphs ( a)
and ( b) shall not apply to the non-financial information to be
disclosed in accordance with paragraphs 8 and 11 of the SixthSchedule, but the auditors shall check whether such information  is
provided.
(4) The audit report shall comply with the provisions of article
179A.
(5) Every copy of the auditors’ report which is laid before the
company in general meeting, or which is otherwise circulated,published or issued, shall state the names of the auditors.
(6) The copy of the auditors’ report which is delivered to the
Registrar shall state the names of the auditors and be signed b y
them.
(7) If a copy of the auditors’ report -
(a) is laid before the company, or otherwise circulated,
published or issued, without the required statement ofthe auditors’ names; or
(b) is delivered to the Registrar without the required
statement of the auditors’ names or without beingsigned as required by this article,
every officer of the company who is in default shall be liable to a
penalty. 
(8) References in this article to signature by the auditors are,
where the office of auditor is held by an audit firm, to the si gnature
of a principal authorised to sign on behalf of such audit firm.
(9) A company’s auditors shall, in preparing their report, carr y
out such investigations as will enable them to form an opinion as
to -
(a) whether proper accounting records have been kept by
the company and proper returns adequate for theiraudit have been received from branches not visited bythem, and
(b) whether the company’s individual accounts are in
agreement with the accounting records and returns.
(10) If the auditors are of the opinion that proper accounting
 118        CAP. 386. ]                         COMP ANIES
records have not been kept, or that proper returns adequate for  their
audit have not been received from branches not visited by them,  or
if the company’s individual accounts are not in agreement with the
accounting records and returns, the auditors shall state that f act in
their report.
(11) If the auditors are unable to obtain all the information an d
explanations which, to the best of their knowledge and belief, are
necessary for the purpose of their audit, they shall state that  fact in
their report.
Cap. 281.(12) In this article "audit firm", "generally accepted auditing
standards" and "principal", shall have the meaning assigned to them
in the Accountancy Profession Act or regulations issued in terms
thereof.
(13)  The audit report on the consolidated financial statements
shall comply with the requirements set out in this article and in
article 179A. In reporting on the consistency of the directors’report and the financial statements the auditor or audit firm s hall
consider the consolidated financial statements and the consolid ated
directors’ report. Where the annual financial statements of theparent undertaking are attached to the consolidated financialstatements, the audit reports required by this article may becombined.
Audit reporting.
Added by;
XXXVI. 2016.23.179A.  (1) The audit report shall be in writing and shall:
(a) identify the entity whose annual or consolidated
financial statements are the subject of the statutoryaudit; specify the annual or consolidated financialstatements and the date and period they cover; andidentify the financial reporting framework that hasbeen applied in their preparation;
(b) include a description of the scope of the statutory audit
which shall, as a minimum, identify the auditingstandards in accordance with which the statutory auditwas conducted;
(c) include an audit opinion, which shall be either
unqualified, qualified or an adverse opinion and shallstate clearly the opinion of the auditor(s) or the auditfirm(s) as to:
(i) whether the annual financial statements give a
true and fair view in accordance with therelevant financial reporting framework; and
(ii) where appropriate, whether the annual financial
statements comply with statutory requirements.
If the statutory auditor(s) or the audit firm(s) are
unable to express an audit opinion, the report shallcontain a disclaimer of opinion;
(d) refer to any other matters to which the auditor(s) or the
audit firm(s) draw(s) attention by way of emphasiswithout qualifying the audit opinion;
(e) include an opinion and statement, both of which shall
                    COMP ANIES              [CAP. 386.       119
be based on the work undertaken in the course of the
audit, referred to in article 179(3);
(f) provide a statement on any material uncertainty
relating to events or conditions that may castsignificant doubt about the entity’s ability to continueas a going concern;
(g) identify the place of establishment of the auditor(s) or
the audit firm(s).
(2) Where the statutory audit was carried out by more than one
auditor or audit firm, the auditor(s) or the audit firm(s) shal l agree
on the results of the statutory audit and submit a joint report  and
opinion. In the case of disagreement, each statutory auditor or  audit
firm shall submit his, her or its  opinion in a separate paragra ph of
the audit report and shall state the reason for the disagreemen t.
(3) The audit report shall be signed and dated by the auditor.
Where an audit firm carries out the statutory audit, the audit report
shall bear the signature of at least the auditor(s) carrying ou t the
statutory audit on behalf of the audit firm. Where more than on e
auditor or audit firm have been simultaneously engaged, the aud it
report shall be signed by all auditors or at least by the audit ors
carrying out the statutory audit on behalf of every audit firm:
Provided that the audit report may also be co-signed by an
auditor authorised in another Member State as long as he/she/it  is a
member of the same network and has obtained the prior writtenconsent of the Board.
(4) Without prejudice to the provisions of sub-articles (1) to
(3), and articles 179 and 179B, the scope of the statutory audi t shall
not include assurance on the future viability of the audited en tity or
on the efficiency or effectiveness with which the management orthe board of directors has conducted or will conduct the affair s of
the entity.
Audit report.
Added by;
XXXVI. 2016.23.179B.  (1) The audit report of public-interest entities shall be
prepared in accordance with the provisions of articles 179 and179A and in addition shall at least:
(a) state by whom or by which body the auditor(s) or the
audit firm(s) was (were) appointed;
(b) indicate the date of the appointment and the period of
total uninterrupted engagement including previousrenewals and reappointments of the auditors or theaudit firms;
(c) provide, in support of the audit opinion, the following:
(i) a description of the most significant assessed
risks of material misstatement, includingassessed risks of material misstatement due tofraud;
(ii) a summary of the auditor’s response to those
risks; and
(iii) where relevant, key observations arising with
 120        CAP. 386. ]                         COMP ANIES
respect to those risks.
Where relevant to the above information provided in
the audit report concerning each significant assessedrisk of material misstatement, the audit report shallinclude a clear reference to the relevant disclosures inthe financial statements;
(d) explain to what extent the statutory audit was
considered capable of detecting irregularities,including fraud;
(e) confirm that the audit opinion is consistent with the
additional report to the audit committee referred to in
Article 11 of the Audit Regulation;
Cap. 281.(f) declare that the prohibited non-audit services referred
to in article 18A(1) of the Accountancy Profession Actwere not provided and that the auditor(s) or the auditfirm(s) remained independent of the audited entity inconducting the audit;
(g) indicate any services, in addition to the statutory audit,
which were provided by the auditor or the audit firm tothe audited entity and its controlled undertaking(s),and which have not been disclosed in the directors’report or financial statements.
(2) Except as required by sub-article (1)(e) the audit report
shall not contain any cross-references to the additional report  to the
audit committee referred to in Article 11 of the Audit Regulati on.
The audit report shall be in clear and unambiguous language.
(3) The statutory auditor or the audit firms shall not use the
name of any competent authority in a way that would indicate orsuggest endorsement or approval by that authority of the auditreport.
Persons to whom a 
copy of the accounts of a company are to be sent.
Amended by:
IV . 2003.78;XXVI.2019.87.180. (1) In the case of every company, a copy of the annual
accounts of a company for the accounting period shall, not less  than
fourteen days before the date of the meeting at which they are to be
laid in accordance with the provisions of article 181, be sent to
each of the following persons: 
(a) every member of the company;
(b) every holder of the company’s debentures; and
(c) all other persons who are entitled to receive notice of
general meetings.
(2) Notwithstanding the provisions of sub-article (1), copies of
the annual accounts shall, unless otherwise provided in thememorandum or articles, not be required to be sent to: 
(a) a debenture holder who is not entitled to receive
notices of general meetings; and 
(b) members of a company who have been duly given
notice of a general meeting of the company at whichthe company’s annual accounts shall be laid inaccordance with article 181, and where the company
                    COMP ANIES              [CAP. 386.       121
has made available to its members an electronic copy
of such annual accounts, either on its website orotherwise, and has informed its members accordingly:
Provided that the company shall provide a printed copy of
such annual accounts to any member upon written request.
(3) If copies of the annual accounts are sent less than fourteen
days before the date of the meeting, they shall, notwithstandin g that
fact, be deemed to have been duly sent if it is so agreed by al l the
members entitled to attend the meeting who received them late.
(4) If default is made in complying with sub-article (1), the
company and every officer who is in default shall be liable to a
penalty.
(5) Any member of the company and any holder of the
company’s debentures, whether or not such holder is entitled tohave sent to him copies of the company’s annual accounts, shall  be
entitled to be furnished, on demand and without charge, with acopy of the last annual accounts laid before the company in gen eral
meeting.
(6) If, when a person makes a demand for a document with
which he is entitled by this article to be furnished, every off icer of
the company who defaults in complying with the demand withinseven days after its making, shall be liable to a penalty, and,  for
every day during which the default continues, to a further pena lty.
(7) For the purposes of this article, reference to the term
"annual accounts" shall include the directors’ report as specif ied in
article 177 and the auditors’ report as specified in article 17 9.
Directors to lay 
accounts before the general meeting.181. (1) In respect of each accounting period of a company the
directors shall lay before the company in general meeting for i ts
approval copies of the annual accounts of the company for thatperiod. There shall be annexed to the annual accounts, the audi tors’
report as specified in article 179 and the directors’ report asspecified in article 177.
(2) The auditors’ report shall be read before the company in
general meeting, and be open to the inspection of any member ofthe company.
(3) If default is made in complying with the provisions of sub-
article (1), or if the annual accounts laid before the company do not
comply with the provisions of this Act, every person whoimmediately before the end of the period for laying such accoun ts
was a director of the company shall be liable to a penalty and,  for
every day during which the default continues, to a further pena lty.
(4) It shall be a defence for a person charged under sub-article
(3) to prove that he took all reasonable steps for securing tha t the
requirements of sub-article (1) would be complied with before t he
end of the period for laying of annual accounts. It shall not b e a
defence to prove that the document or documents in question wer e
not in fact prepared as required by this Act.
 122        CAP. 386. ]                         COMP ANIES
Period for laying 
and approval of accounts.
Amended by:
XV . 2007.10;XX. 2013.82;XXXI. 2015.14.182. (1) The period allowed for laying before and approval by
the company in general meeting of a company’s annual accountsfor an accounting period shall be as provided in this article.
(2) Subject to the following sub-articles of this article, the
period allowed shall be -
(a) for a private company, ten months after the end of the
relevant accounting reference period; and
(b) for a public company, seven months after the end of
that period.
(3) Where a company’s first accounting period is a period of
more than twelve months from the date of its registration, theperiod otherwise allowed for laying before and approval by thecompany in general meeting of annual accounts shall be reduced by
the number of days by which the relevant accounting period islonger than twelve months. However, the period allowed shall no t
by this provision be reduced to less than three months after th e end
of that accounting period.
(4) Where a company’s relevant accounting period has been
shortened due to a change in the accounting reference date, theperiod allowed for laying and delivering annual accounts shall be -
(a) the period allowed in accordance with sub-articles (2)
and (3); or
(b) the period of three months beginning with the date of a
notice given to the Registrar when notice has beengiven to change the accounting reference date,
whichever of those periods last expires.
Copies of accounts 
to be provided to Registrar.
Amended by:
IV . 2003.79;IX. 2008.26;XX. 2013.83;XXXI. 2015.15.183. (1) The company directors shall deliver to the Registrar
for registration a copy of the company’s annual accounts laidbefore the company in general meeting in accordance with articl e
181 together with a copy of the auditors’ report thereon, and t he
directors’ report accompanying the annual accounts within forty -
two days from the end of the period for laying of annual accoun ts
prescribed by article 182. Where a copy of the annual accounts,auditors’ report and directors’ report is delivered to the Regi strar by
electronic means, without prejudice to the requirements of arti cles
176(3), 178(3) and 179(6), such electronic copy shall be authen ticated
in accordance with article 82.
(2) A company which qualifies as a small company in terms of
article 185(1) need not deliver to the Registrar the directors’  report:
Provided that where the company which qualifies as a small
company is a private company having the status of an exemptcompany, it need not deliver to the Registrar the directors’ re port
and the profit and loss account:
Provided further that where the exempt company also
qualifies in terms of article 185(2), it need also not deliver to the
Registrar an auditors’ report.
(3) Where the directors of a company take advantage of any of
the exemptions conferred by sub-article (2), a declaration on t he
                    COMP ANIES              [CAP. 386.       123
prescribed form signed by the same directors who signed the
balance sheet shall, together with the annual accounts, be deli vered
to the Registrar confirming that the company qualifies for theexemption or exemptions.
(4) Where a company, which is a parent company, prepares
consolidated accounts in accordance with the provisions of this  Act
it need not include a copy of its profit and loss account with the
annual accounts to be delivered to the Registrar as prescribed in
sub-article (1) where the following conditions are fulfilled -
(a) the application of this exemption is disclosed in the
notes to the accounts of the parent company and in thenotes to the consolidated accounts; and
(b) the profit or loss of the parent company, determined in
accordance with the provisions of this Act, shall beshown separately either on the face of the parentcompany’s balance sheet or in the notes to theaccounts of the parent company.
(5) If any document comprised in the annual accounts is in a
language other than Maltese or English, the company shall annex  to
the copy of that delivered document a translation of it into ei ther
Maltese or English, certified to be a correct translation in su ch
manner as may be prescribed.
(6) In the case of default in complying with the provisions of
this article, or where the annual accounts delivered to the Reg istrar
do not comply with the provision s of this Act, every officer of  the
company who is in default shall be liable to a penalty, and, fo r
every day during which the default continues, to a further pena lty.
In proceedings under this sub-article it shall not be a defence  to
prove that the document or documents in question were not in fa ct
prepared as required by this Act.
Annual return.
Substituted by:IV . 2003.80.
Amended by:
XV . 2007.11;
XX. 2013.84.184. (1) Every company shall, after 1st January 2004, upon
each anniversary of its registration, make a return in the form  set
out in the Seventh Schedule showing the matters therein specifi ed
and made up to the date of such anniversary:
Provided that -
(a) where a company was, immediately before the 1st
January 2004, in default with respect to the delivery ofone or more annual returns, this article shall not affectthe obligation of the company to make such a return or
returns or the payment of any penalty arising fromsuch a default;
(b) where a company has converted any of its shares into
stock and registered the conversion as provided inarticle 79, the list of past and present members shownin Part 3 of the Seventh Schedule shall state theamount of stock held by each of the existing membersinstead of the amount of shares and the particularsrelating to shares required by that part.
(2) The annual return, duly completed, shall be signed by at
 124        CAP. 386. ]                         COMP ANIES
least one director of the company or the company secretary and
forwarded to the Registrar for registration within forty-two da ys
after the date to which it is made up. Where the annual return is
forwarded to the Registrar by electronic means it may be signed  by
one director or the company secretary or by an individual speci fically
authorised for such purpose by the memorandum, or by a resolution
of the board of directors, or by an extraordinary resolution of  the
company. The signature of such annual return shall be by means of
an electronic signature duly recognised by the Registrar.
(3) If default is made in complying with the provisions of this
article, every officer of the company who is in default shall b e
liable to a penalty, and, for every day during which the defaul t
continues, to a further penalty.
Exemptions for 
certain small companies.
Amended by:
IV . 2003.81;L.N. 391 of 2005;L.N. 425 of 2007;IX. 2008.27;XXXI. 2015.16.185. (1) Companies which on their balance sheet dates do not
exceed the limits of two of the three following criteria:
- balance sheet total: four million euro (4,000,000);
- turnover: eight million euro (8,000,000);- average number of employees during the accounting
period: fifty (50);
shall in this Chapter be designated as "small companies" and sh all
be exempted from the requirement imposed by article 177. Whenadvantage is taken of this exemption the information required i n
paragraph 3 of the Sixth Schedule regarding the acquisition by a
company of its own shares shall be given in the notes to theaccounts.
(2) Private companies which on their balance sheet dates do not
exceed the limits of two of the three following criteria:
- balance sheet total: forty-six thousand six hundred
euro (46,600);
- turnover: ninety-three thousand euro (93,000);- average number of employees during the accounting
period: two (2);
shall be exempted from the provisions of Chapter IX of Title I of
Part V and from the requirements imposed by article 179 and the
Third Schedule.
(3) Where on its balance sheet date other than its first balance
sheet date, a company exceeds or ceases to exceed the limits of  two
of the three criteria indicated in sub-articles (1) and (2), th at fact
shall affect the application of the derogation provided for in those
sub-articles only if it occurs in two consecutive accounting pe riods.
(4) The balance sheet total referred to in this article shall be
calculated by taking the amount of total assets shown in the ba lance
sheet drawn up in accordance with generally accepted accountingprinciples and practice.
(5) A parent company shall not be treated as qualifying as a
small company in relation to an accounting period unless the gr oup
of which it is parent qualifies as a small group. A group quali fies as
                    COMP ANIES              [CAP. 386.       125
a small group in relation to an accounting period if it consist s of
parent and subsidiary undertakings to be included in aconsolidation and which on a consolidation basis do not exceed the
limits of two of the three following criteria on the balance sh eet
date of the parent undertaking:
- aggregate balance sheet total: four million euro
(4,000,000) net or four million eight hundred thousandeuro (4,800,000) gross;
- aggregate turnover: eight million euro (8,000,000) net
or nine million and six hundred thousand euro(9,600,000) gross:
- aggregate number of employees: fifty (50):
Provided that the provisions of this sub-article shall not
apply to a parent company which is exempted from the requiremen t
to prepare consolidated accounts in accordance with article 174 .
(6) The provisions of sub-article (3) shall apply to parent
companies as though the reference to company were a reference t o
parent company.
(7) The aggregate figures shall be ascertained by aggregating
the relevant figures determined in accordance with sub-articles  (1),
(2) and (5). In relation to the aggregate figures for turnover and
balance sheet total, "net" means with the set-offs and otheradjustments required for the preparation of consolidated accoun ts
and "gross" means without those set-offs and other adjustments;and a company may satisfy the relevant requirements on the basi s
of either the net or the gross figure.
(8) The figures for each subsidiary undertaking shall be those
included in its individual accounts for the relevant accountingperiod, that is -
(a) if its accounting period ends with that of the parent
company, that accounting period; and
(b) if not, its accounting period ending last before the end
of the accounting period of the parent company.
If such figures cannot be obtained without disproportionate
expense or undue delay, the latest available figures shall be t aken.
(9) When calculating the thresholds mentioned in this article,
undertakings shall include income from other sources for which"net turnover" is not relevant.
(10) In determining the average number of employees during the
accounting period, for the purposes of this article -
(a) in relation to whole-time employees, the average
number of employees shall be that established on thebasis of the following formula:
- the aggregate number of full weeks worked
during the accounting period by all the whole-time employees of the company divided by thenumber of full weeks comprised in that period,rounded off to the nearest number; and
 126        CAP. 386. ]                         COMP ANIES
(b) in relation to part-time employees, the average number
of employees shall be that established on the basis ofthe following formula:
- the aggregate number of hours worked during
the accounting period by all the part-timeemployees of the company divided by thenumber of full weeks comprised in that periodand again divided by forty, rounded off to thenearest number.
Share capital in 
any convertible currency.
Amended by:
IV . 2003.82;L.N. 425 of 2007.186. (1) The share capital of a company may be denominated
in any currency which is a convertible currency within the mean ing
assigned to it by the Central Bank of Malta Act, and, for thepurposes of this Chapter, the euro shall be a convertible curre ncy.
(2) A company may by extraordinary resolution change the
currency in which its share capital is expressed, and for thispurpose the conversion rules set out in the Eighth Schedule sha ll
apply in respect of any company other than an investment compan y
with variable share capital.
(3) For the purposes of applying the provisions of this Act
relating to minimum share capital, share capital expressed in acurrency other than euro shall be calculated on the basis of th e euro
equivalent at the date of - 
(a) the registration of the memorandum, in the case of
formation of a company; or
(b) the registration of the extraordinary resolution, in the
case referred to in sub-article (2); or
(c) the registration of the extraordinary resolution
effecting a reduction of the issued share capital, in thecase where a company reduces its issued share capital.
(4) Without prejudice to the provisions of article 83, a copy of
the extraordinary resolution referred to in sub-article (2) sha ll be
delivered to the Registrar for registration and shall not be ef fective
until it is so registered.
(5) The exchange rate to be used shall be the average of the
buying and selling rates prevailing at the date of registrationreferred to in sub-article (3), as the case may be.
(6) An investment company with variable share capital may
only change the currency in which its share capital is expresse d by
complying with such conversion rules as may be prescribed by th e
Minister under article 188.
Accounts in any 
convertible currency.
Amended by:
IV . 2003.83;L.N. 425 of 2007;IX. 2008.28;XX. 2013.85.187. (1) A company shall present its annual accounts in the
same currency as that of its share capital.
(2) Where the annual accounts of a company are presented in a
currency other than euro, there shall be stated on the balance sheet
of the company the exchange rate between the currency used andeuro on the balance sheet date and such rate shall be the offic ial
euro reference middle exchange rate published by the EuropeanCentral Bank, or the indicative middle exchange rate published by the
Central Bank of Malta, as the case may be, for that date.
                    COMP ANIES              [CAP. 386.       127
(3) For the purposes of applying any provision of this Act
which sets a threshold by reference to an amount in euro in theannual accounts of a company, such amount as stated in a foreig n
currency in the company’s annual accounts shall be converted in to
euro by using the exchange rate referred to in sub-article (2).
(4) Annual accounts shall be published in the currency in
which they are presented. They may also be published in both th e
currency in which they are presented and in euro. The conversio n
into euro shall be made by using the exchange rate between thecurrency used and the euro on the balance sheet date, and such rate
shall be the of ficial euro reference middle exchange rate published by
the European Central Bank, or the indicative middle exchange ra te
published by the Central Bank of Malta, as the case may be. Thi s rate
shall be disclosed in the notes to the accounts.
Power of Minister 
to make regulations altering accounting requirements.
Amended by:
IV . 2003.84;IX. 2008.29.188.  For the purposes of this Chapter, the Minister may by
order make regulations which - 
(a) add to the classes of documents required to be
prepared, laid before the company in general meetingor delivered to the Registrar;
(b) restrict the categories of companies which have the
benefit of any exemption, exception or specialprovision;
(c) require additional matter to be included in a document
of any class;
(d) otherwise render the accounting requirements of this
Act more onerous;
(e) in derogation of the provisions of article 187, permit a
company to present its annual accounts in a differentcurrency from that of its share capital, regulate themanner and the conditions as may be consideredappropriate for this purpose, and make provision in theEighth Schedule to this Act for the application of thesaid Schedule, with such variations as may bespecified, in relation to such a company;
(f) prescribe conversion rules applicable on a change in
the currency in which the share capital of aninvestment company with variable share capital isexpressed; or
(g) amend or vary any of the provisions of this Chapter for
the purpose of bringing them in line with therequirements of generally accepted accountingprinciples and practice or generally accepted auditingstandards.
Consequential 
provisions to article 188.189. (1) Regulations made under article 188 may -
(a) make different provision for different cases; and
(b) repeal and re-issue provisions of any regulation with
modifications of form or arrangement, whether or notthey are modified in substance.
 128        CAP. 386. ]                         COMP ANIES
(2) Regulations made under article 188 may contain such
transitional and other supplementary and incidental provisions as
appear to the Minister to be appropriate.
Court order to 
make good failure to lay or deliver accounts.190. (1) If - 
(a) in respect of a company’s accounting period any of the
requirements of article 182(1) has not been compliedwith before the end of the period prescribed by thatarticle; and
(b) the directors of the company fail to make good the
default within fourteen days after the service of anotice on them requiring compliance,
the court may, on application by any member or creditor of the
company, or by the Registrar, make an order directing the direc tors,
or any of them, to make good the default within such time as ma y
be specified in the order.
(2) The court’s order may provide that all costs of and
incidental to the application shall be borne by the directors.
(3) Nothing in this article shall prejudice the provisions of th is
Act relating to penalties for non-compliance.
Application to 
other commercial partnerships.
Amended by:
IV . 2003.85.191. (1) Where all the partners of a partnership en nom
collectif  or where all the partners having unlimited liability of a
partnership en commandite or limited partnership, the capital of
which is not divided into shares, are themselves partnerships en
commandite or limited partnerships, the capital of which is divided
into shares, the provisions of Chapter IX and of this Chapter o f this
Title shall, in so far as they are applicable, apply to such a
partnership.
(2) The provisions of sub-article (1) shall also apply where all
the partners of a partnership en nom collectif  or where all the
partners having unlimited liability of a partnership en commandite
or limited partnership the capital of which is not divided into  shares
are themselves companies, or are partnerships or firms constitu ted
or incorporated outside Malta which are of a type which iscomparable to that of a company or that of a partnership en
commandite  or limited partnership the capital of which is divided
into shares as regulated by this Act.
(3) Where all the partners of a partnership en nom collectif  or
where all the partners having unlimited liability of a partners hip en
commandite or limited partnership the capital of which is not
divided into shares are themselves companies or are partnership s en
commandite or limited partnerships the capital of which is divided
into shares, or are commercial partnerships to which sub-articl e (1)
or sub-article (2) applies, the provisions of Chapter IX and of  this
Chapter of this Title shall, in so far as applicable, apply to such a
partnership.
                    COMP ANIES              [CAP. 386.       129
Chapter XI - Distribution of Profits and Assets
Certain 
distributions prohibited.192. (1) A company shall not make a distribution except out of
profits available for the purpose.
(2) For the purposes of this Chapter, "distribution" means every
description of distribution of a company’s assets to its member s,
whether in cash or otherwise, except distribution by way of - 
(a) an issue of shares as fully or partly paid bonus shares; 
(b) the redemption or purchase of any of the company’s
own shares out of capital, including the proceeds ofany fresh issue of shares, or out of undistributablereserves as stipulated in article  193(3);
(c) the reduction of the issued share capital by
extinguishing or reducing the liability of any of themembers on any of the company’s shares in respect ofissued share capital not paid up, or by paying off paidup issued share capital; and
(d) a distribution of assets to members of the company on
its winding up.
(3) For the purposes of this Chapter, a company’s profits
available for distribution shall be its accumulated, realised p rofits,
so far as not previously utilised by distribution or capitalisa tion,
less its accumulated, realised losses, so far as not previouslywritten off in a reduction or reorganisation of issued share ca pital
duly made. The provisions of this sub-article shall be subject to the
provisions of articles 194 and 195.
(4) A company shall not apply an unrealised profit in paying up
debentures, or any amounts unpaid on its issued share capital.
(5) Where the directors of a company are, after making all
reasonable enquiries, unable to determine whether a particularprofit made before the 1st January, 1995 is realised or unreali sed,
they may treat the profit as realised; and where after making s uch
enquiries they are unable to determine whether a particular los s so
made is realised or unrealised, they may treat the loss as unre alised.
Distributions by 
companies.
Amended by:
XXXI. 2015.17.193. (1) A public company may only make a distribution at
any time -
(a) if at that time the amount of its net assets is not less
than the aggregate of its called-up issued share capitaland undistributable reserves; and
(b) if, and to the extent that, the distribution does not
reduce the amount of those assets to less than thataggregate.
The provisions of this sub-article shall be subject to the
provisions of articles 194 and 195.
(2) In sub-article (1), "net assets" means the aggregate of the
company’s assets less the aggregate of its liabilities. "Liabil ities"
include any amount retained as reasonably necessary for thepurpose of providing for any liability or loss which is either likely
 130        CAP. 386. ]                         COMP ANIES
to be incurred or certain to be incurred but uncertain as to am ount
or as to the date on which it will arise.
(3) A company’s undistributable reserves are -
(a) the share premium account;
(b) the capital redemption reserve;
(c) the amount by which the company’s accumulated,
unrealised profits, so far as not previously utilised bycapitalization of a description to which this paragraphapplies, exceed its accumulated, unrealised losses, sofar as not previously written off in a reduction orreorganisation of capital duly made;
(d) the difference by which the profit attributable to the
participating interest and recognised in the profit andloss account exceeds the amount of dividends alreadyreceived or the payment of which can be claimed;
(e) the amount of development costs included under
‘Assets’ which have not been completely written off;and
(f) any other reserve which the company is prohibited
from distributing by any legislation or by itsmemorandum or articles; and paragraph  (c) shall apply
to every description of capitalization except a transferof profits of the company to its capital redemptionreserve on or after 1st January, 1995.
(4) A public company shall not include any uncalled issued
share capital as an asset in any accounts relevant for the purp oses
of this article.
Other distributions 
by investment companies with fixed share capital.
Amended by:
IV . 2003.86.IX. 2003.85;
IX. 2008.30;
XVI. 2014.59.194. (1) Subject to the following provisions of this article, an
investment company with fixed share capital may also make adistribution at any time out of its accumulated, realised reven ue
profits, so far as not previously utilised by a distribution orcapitalisation, less its accumulated revenue losses, whether re alised
or unrealised, so far as not previously written off in a reduct ion or
reorganisation of capital duly made - 
(a) if at that time the amount of its assets is at least equal
to one and a half times the aggregate of its liabilities,and
(b) if, and to the extent that, the distribution does not
reduce that amount to less than one and a half timesthat aggregate.
(2) In sub-article (1)( a), "liabilities" includes any provision for
liabilities or charges within the meaning of paragraph 7 of the
Third Schedule.
(3) An investment company with fixed share capital shall not
include any uncalled issued share capital as an asset in anyaccounts relevant for the purposes of this article.
(4) An investment company with fixed share capital may not
                    COMP ANIES              [CAP. 386.       131
make a distribution by virtue of sub-article (1) unless - 
(a) its shares are listed on a regulated market; and
(b) during the relevant period it has not - 
(i) distributed any of its capital profits, or
(ii) applied any unrealised profits or any capital
profits, realised or unrealised, in paying updebentures or amounts unpaid on its issued sharecapital.
(5) The "relevant period" under sub-article (4) shall be the
period beginning with - 
(a) the first day of the accounting period immediately
preceding that in which the proposed distribution is tobe made; or 
(b) where the distribution is to be made in the company’s
first accounting period, the first day of that period, 
and ending with the date of the distribution.
(6) "Investment company with fixed share capital" means a
public company which complies with the following requirements:
(a) the business of the company consists of investing in
funds mainly in securities with the aim of spreadinginvestment risk and giving members of the companythe benefit of the results of the management of itsfunds;
(b) none of the company’s holdings in companies other
than those which are, for the time being, in investmentcompanies with fixed share capital, represents morethan fifteen per cent by value of the investingcompany’s investments;
(c) distribution of the company’s capital profits is
prohibited by its memorandum or articles; and
(d) the company has not retained, otherwise than in
compliance with this Chapter, in respect of anyaccounting period, more than fifteen per cent of theincome it derives from securities. 
Extension of article 
194 to other companies.195. (1) The Minister may make regulations extending the
provisions of article 194, with or without modifications, toinvestment companies with variable share capital or to othercompanies whose principal business consists of investing theirfunds in securities, land or other assets with the aim of sprea ding
investment risk and giving their members the benefit of the res ults
of the management of the assets.
(2) Regulations made under this article may make different
provision for different categories of companies and may containsuch transitional and supplemental provisions as the Ministerconsiders necessary.
 132        CAP. 386. ]                         COMP ANIES
Treatment of 
development costs.
Amended by:
XXXI. 2015.18.196. (1) Subject to the following provisions of this article,
where development costs are shown as an asset in a company’sannual accounts, any amount shown in respect of those costs is to
be treated - 
(a) under article 192, as a realised loss; and 
(b) under article 194, as a realised revenue loss. 
(2) The provisions of sub-article (1) shall not apply to any par t
of that amount representing an unrealised profit made onrevaluation of those costs.
Distribution to be 
justified by reference to company’s accounts.197. (1) The provisions of this article and of articles 198 to
203 shall apply for determining the question whether a distribu tion
may be made by a company without contravening articles 192, 193 ,
or 194.
(2) The amount of a distribution which may be made shall be
determined by reference to the following items as stated in thecompany’s accounts - 
(a) profits, losses, assets and liabilities;
(b) provisions of any of the kinds mentioned in the Third
Schedule to this Act in paragraphs 7, 16 and 17 andthese paragraphs as applied by paragraph 28 of thesaid Third Schedule; and
(c) share capital and reserves, including undistributable
reserves.
(3) The company’s accounts which are relevant for the
purposes of this article shall be its last annual accounts, tha t is to
say those which were laid in respect of the last precedingaccounting period in respect of which accounts so prepared werelaid:
   Provided that in the following two cases - 
(a) where the distribution would be found to contravene
the relevant article in this Chapter if reference weremade only to the company’s last annual accounts; or
(b) where the distribution is proposed to be declared
during the company’s first accounting period, orbefore any annual accounts are laid in respect of thatperiod,
the accounts relevant under this article, called "interim accou nts" in
the first case, and "initial accounts" in the second, shall be those
necessary to enable a reasonable judgment to be made as to theamounts of the items mentioned in sub-article (2).
(4) The relevant article of this Chapter is treated as
contravened in the case of a distribution unless the requiremen ts
laid down in this article and in the following three articles, as and
where applicable, in respect of the relevant accounts are compl ied
with in relation to that distribution.
                    COMP ANIES              [CAP. 386.       133
Requirements for 
last annual accounts.198. (1) If the company’s last annual accounts constitute the
only accounts relevant under article 197, the requirements laiddown in this article shall apply in regard to such accounts.
(2) The accounts shall have been properly prepared in
accordance with the provisions of this Act, or have been soprepared subject only to matters which are not material fordetermining, by reference to items mentioned in article 197(2),whether the distribution would contravene the relevant article of
this Chapter.
(3) Without prejudice to the provisions of sub-article (2) - 
(a) so much of the accounts as consists of a balance sheet
shall give a true and fair view of the state of thecompany’s affairs as at the balance sheet date; and
(b) so much of the accounts as consists of a profit and loss
account shall give a true and fair view of thecompany’s profit or loss for the period in respect ofwhich the accounts were prepared.
(4) The auditors shall have made their report on the accounts,
and sub-article (5) shall apply if the report is not a report w ithout
qualification to the effect that in the auditor’s opinion the a ccounts
have been properly prepared in accordance with the provisions o f
this Act.
(5) The auditors shall, in the case referred to in sub-article ( 4),
have stated in writing, either at the time of their report orsubsequently, whether in their opinion, the matter in respect o f
which their report is qualified is material for determining, byreference to items mentioned in art icle 197(2), whether the
distribution would contravene the relevant article, and a copy of the
statement shall have been laid before the company in generalmeeting.
(6) A statement under sub-article (5) shall suffice for purposes
of a particular distribution not only if it relates to a distri bution
which has been proposed but also if it relates to distributions  of any
description which include that particular distribution,notwithstanding that at the time of the statement it had not be en
proposed.
Requirements for 
interim accounts.
Amended by:
IV . 2003.87.199. (1) The provisions of this article shall constitute the
requirements in respect of interim accounts prepared for a prop osed
distribution by a public company.
(2) The accounts shall have been properly prepared, or shall
have been so prepared subject only to matters which are notmaterial for determining, by reference to items mentioned in ar ticle
197(2), whether the proposed distribution would contravene therelevant article of this Chapter.
(3) "Properly prepared" shall mean that the accounts shall
comply with this Act with such modifications as are necessarybecause the accounts are prepared otherwise than in respect of an
accounting period and any balance sheet comprised in the accoun ts
shall have been signed in accordance with article 176.
 134        CAP. 386. ]                         COMP ANIES
(4) Without prejudice to the provisions of sub-article (3) - 
(a) so much of the accounts as consists of a balance sheet
shall give a true and fair view of the state of thecompany’s affairs as at the balance sheet date; and
(b) so much of the accounts as consists of a profit and loss
account shall give a true and fair view of thecompany’s profit or loss for the period in respect ofwhich the accounts were prepared.
(5) A copy of the accounts shall have been delivered to the
Registrar for registration.
(6) If the accounts are in a language other than English or
Maltese, a translation into English or Maltese of the accounts,certified to be a correct translation in such manner as may beprescribed, shall also have been delivered to the Registrar.
Requirements for 
initial accounts.200. (1) The provisions of this article shall constitute the
requirements in respect of initial accounts prepared for a prop osed
distribution by a public company.
(2) The accounts shall have been properly prepared, or they
shall have been so prepared subject only to matters which are n ot
material for determining, by reference to items mentioned in ar ticle
197(2), whether the proposed distribution would contravene therelevant article of this Chapter.
(3) Article 199(3) and (4) shall apply as respects the meaning of
"properly prepared".
(4) The company’s auditors shall have made a report stating
whether, in their opinion, the accounts have been properlyprepared, and sub-article (5) shall apply if their report is a qualified
report, that is to say it is not a report without qualification  to the
effect that in the auditors’ opinion the accounts have been soprepared.
(5) The auditors shall in the case referred to in sub-article (4 )
also have stated in writing, whether, in their opinion, the mat ter in
respect of which their report is qualified is material fordetermining, by reference to items mentioned in article 197(2),whether the distribution would contravene the relevant article of
this Chapter.
(6) A copy of the accounts, of the auditors’ report under sub-
article (4) and of the auditors’ statement, if any, under sub-a rticle
(5) shall have been delivered to the Registrar.
(7) If the accounts are, or the auditors’ report under sub-artic le
(4) or their statement, if any, under sub-article (5), is in a language
other than Maltese or English, a translation into English or Ma ltese
of the accounts, the report or the statement, as the case may b e,
certified to be a correct translation in such manner as may beprescribed, shall also have been delivered to the Registrar.
                    COMP ANIES              [CAP. 386.       135
Method of 
applying article 197 to successive distributions.201.  For the purpose of determining, by reference to particular
accounts, whether a proposed distribution may be made by acompany, article 197 shall have ef fect, in a case where one or more
distributions have already been made in pursuance ofdeterminations made by reference to those same accounts, as if the
amount of the proposed distribution was increased by the amount  of
the distributions so made.
Treatment of assets 
in the relevant accounts.202.  For the purposes of articles 192 and 193, a provision of
any kind mentioned in the Third Schedule in paragraph 7(1) andparagraphs 16 and 17 including these paragraphs as applied byparagraph 28 of the said Third Schedule, shall be treated as arealised loss.
Distributions in 
kind.203.  Where a company makes a distribution of, or including, a
non-cash asset, and any part of the amount at which that asset is
stated in the accounts relevant for the purposes of the distrib ution
in accordance with articles 197 to 202 represents an unrealisedprofit, that profit is to be treated as a realised profit - 
(a) for the purpose of determining the lawfulness of the
distribution in accordance with this Chapter, whetherbefore or after the distribution takes place; and
(b) for the purpose of paragraph 14( c)(i) and paragraph
30(3) of the Third Schedule in relation to anythingdone with a view to or in connection with the makingof that distribution.
Consequence of 
unlawful distribution.204.  Where a distribution, or part of a distribution, made by a
company to one of its members is made in contravention of thisChapter and, at the time of the distribution, that member knows  or
has reasonable grounds for believing that it is so made, he sha ll be
liable to repay it, or that part of it, as the case may be, to the
company or, in the case of a distribution made otherwise than i n
cash, to pay the company a sum equal to the value of thedistribution, or of the part of the distribution, at that time.
Obligations 
imposed apart from article 204 not to be prejudiced.205.  The provisions of article 204 shall apply without prejudice
to any obligation imposed apart from that article on a member o f a
company to repay a distribution unlawfully made to him.
Saving for 
provision in articles operative before 1st January, 1995.206.  Where immediately before 1st January, 1995 a company
was authorised by a provision of its articles to apply its unre alised
profits in paying up in full or in part unissued shares to be a llotted
to members of the company as fully or partly paid bonus shares,that provision shall continue, subject to any alteration of thearticles, as authority for those profits to be so applied after  that
date.
Interpretations for 
the purposes of this Chapter.207. (1) The provisions of this article shall have effect for the
interpretation of this Chapter.
(2) "Capitalisation", in relation to a company’s profits, shall
mean any of the following operations, whenever carried out - 
(a) the application of the profits to wholly or partly pay up
unissued shares in the company to be allotted tomembers of the company as fully or partly paid bonus
 136        CAP. 386. ]                         COMP ANIES
shares; or
(b) the transfer of the profits to the capital redemption
reserve.
(3) References in this Chapter to profits and losses of any
description shall be, respectively, to profits and losses of th at
description made at any time and, except where the contextotherwise requires, shall be, respectively, to revenue and capi tal
profits and revenue and capital losses.
Saving for other 
restraints on distribution.208.  The provisions of this Chapter shall be without prejudice
to any other provision of law, or any provision of a company’smemorandum or articles, restricting the sums out of which, or t he
cases in which, a distribution may be made.
Chapter XII - Private Company
Definition.
Amended by:
IV . 2003.88;XIX. 2010.34XI. 2017.11.209. (1) A private company is a company which, besides
fulfilling the requirements of this Act for it to hold the stat us of a
private company, is one which, by its memorandum or articles - 
(a) restricts the right to transfer its shares; and 
(b) limits the number of its members to fifty; and
(c) prohibits any invitation to the public to subscribe for
any shares or debentures of the company.
(2) A private company shall not - 
(a) offer to the public, whether for cash or otherwise, any
shares in or debentures of the company; or
(b) allot or agree to allot, whether for cash or otherwise,
any shares in or debentures of the company with aview to all or any of those shares or debentures beingoffered to the public, within the meaning given to theexpression "of fers of securities made to the public" in
article 2(3); or
(c) allow any of its equity securities to be admitted to listing
or trading.
(3) Where a private company contravenes the provisions of
sub-article (2), every officer thereof who is in default shall be liable
to a penalty.
Resolutions in 
writing.
Amended by:
IV . 2003.89;XX. 2013.86.210.  Subject to the provisions of this Act, in the case of a
private company, a resolution in writing signed by all the memb ers
for the time being entitled to receive notice of and to attend and
vote at the general meetings shall be as valid and effective as  if the
same had been passed at a general meeting of the company dulyconvened and held and the provisions of article 155 shall not a pply.
Annual general meetings of the company may be held in
accordance with this article:
Provided that a resolution in writing as aforesaid shall be
void if it purports to remove a director or an auditor before t he
expiration of his term of office, or otherwise purports to deprive the
auditors of the right to attend and be heard at any general mee ting of
                    COMP ANIES              [CAP. 386.       137
the company on any part of the business of the meeting which
concerns them as auditors.
Exempt company.
Amended by:
III. 2013.70.211. (1) A private company shall have the status of an exempt
company if the conditions mentioned in sub-article (2) arecontained in its memorandum or articles.
(2) The conditions required by sub-article (1) are - 
(a) that the number of persons holding debentures of the
company is not more than fifty; and
(b) that no body corporate is a director of the company,
and neither the company nor any of the directors isparty to an arrangement whereby the policy of thecompany is capable of being determined by personsother than the directors, members or debenture holdersthereof.
(3) Companies referred to in sub-article (1) shall be exempt
from the requirements of article 138(7) and of article 144(1)( a); and
the proviso to article  183(2) shall apply.
(4) A sole director of an exempt company shall be entitled to
hold office as a company secretary thereof during his directors hip.
(5) Where an exempt company has only one director, any
requirement of this Act that two directors of a company shall a ct,
shall be interpreted in relation to the exempt company as requi ring
one director to act.
Single member 
companies.
Amended by:
IV . 2003.90;XX. 2013.87.212. (1) A company referred to in article 211(1) may have a
single member notwithstanding the provisions of article 68 and of
article 72(1) or of any other provision of this Act, where the objects
of such a company specify which activity of the company shall b e
its main activity and the business of the company shall consistprincipally of that activity.
(2) The provisions of article 214(2)( b)(i) shall not apply to
companies falling within the terms of this article.
(3) A company may have a single member upon registration or
it may become a single member company through the acquisition o f
all its shares by one person, provided that such a company comp lies
with the provisions laid down in sub-article (1).
(4) When a company becomes a single member company
through the acquisition of all its shares by one person, the co mpany
shall, within fourteen days, deliver to the Registrar for regis tration
a notice - 
(a) specifying the fact that it has become a single member
company and stating the name and residence of thatsingle member; and
(b) confirming compliance with the provisions laid down
in sub-article (1).
Such notice shall be deemed to satisfy the requirements of
article  120(3).
(5) Where a person becomes a single member as a result of
 138        CAP. 386. ]                         COMP ANIES
acquiring shares in the company causa mortis , such fact shall be
stated in the notice referred to in sub-article (4) and such no tice
shall be deemed to satisfy the requirements of article  120(3).
(6) If default is made in complying with sub-articles (4), (5)
and (10), every officer of the company who is in default shall be
liable to a penalty, and, for every day during which the defaul t
continues, to a further penalty.
(7) The single member shall exercise the powers of the general
meeting of the company and the decisions taken by him in thiscapacity shall be recorded as minutes of the general meeting an d
the provisions of this Act regulating general meetings shall beconstrued accordingly. The decisions referred to in this sub-ar ticle
shall be deemed to be resolutions of the company for the purpos es
of the application of the provisions of this Act:
Provided that the provisions of this sub-article shall not
prejudice the rights of the auditors of the company under theprovisions of article 155, and the rights granted to persons as  are,
by the articles of the company , entitled to receive notices of,  attend
and be heard at general meetings of the company.
(8) The single member shall record in writing all agreements
between him and the company as represented by him in a minutebook kept by the company specifically for the purpose.
(9) If default is made in complying with the provisions of sub-
article (8), the single member shall be liable to a penalty.
(10) When a company ceases to be a single member company, it
shall, within fourteen days, deliver to the Registrar for regis tration
a notice specifying the fact that it is no longer a single memb er
company and the provisions of this article shall not apply to s uch
company from the date it has ceased to be a single membercompany.
Change of status of 
company.213. (1) A private company may change its status to a public
company by altering its memorandum or articles and incorporatin g
in such alteration all those changes required by the provisions  of
this Act for a company to hold the status of a public company,including the removal of the restrictions resulting by virtue o f the
provisions of article 209 which  conflict with the status of a p ublic
company.
(2) The alteration referred to in sub-article (1) shall not take
effect unless and until it is registered and the provisions of article
79(2) shall apply thereto.
(3) The Registrar shall, upon the registration referred to in su b-
article (2), enter in the register the fact of such change as r eferred to
in sub-article (1) and he shall issue a certificate of registra tion
altered to reflect that change.
(4) A public company may change its status to a private
company if, after having effected compliance with the restricti ons
resulting by virtue of the provisions of article 209, it alters  its
memorandum or articles, incorporating in such alteration all th ose
changes required by the provisions of this Act for a company to
                    COMP ANIES              [CAP. 386.       139
hold the status of a private company, including the introductio n of
the restrictions resulting by virtue of the provisions of artic le 209.
(5) The alteration referred to in sub-article (4) shall not take
effect unless and until that alteration, accompanied by a decla ration
made by the directors of the company that the company iseffectively in compliance with the provisions of article 209, i s
registered, and the provisions of article  79(2) shall apply thereto.
(6) The Registrar shall, upon the registration referred to in su b-
article (5), enter in the register the fact of such change as r eferred to
in sub-article (4) and he shall issue a certificate of registra tion
altered to reflect that change.
(7) A private company may change its status to an exempt
company if, after having effected compliance with the condition s
laid down in article 211, it alters its memorandum or articles by
incorporating therein all the said conditions.
(8) The alteration referred to in sub-article (7) shall not take
effect unless and until that alteration, accompanied by a decla ration
made by the directors of the company that the company iseffectively in compliance with the provisions of article 211, i s
registered, and the provisions of article  79(2) shall apply thereto.
(9) An exempt company which resolves not to continue
fulfilling any of the conditions of article 211, shall change i ts status
to a private company by altering its memorandum or articles toremove any such conditions.
(10) The alteration referred to in sub-article (9) shall not tak e
effect unless and until it is registered and the provisions of article
79(2) shall apply thereto.
(11) Where a private company changes its status to a public
company in accordance with the provisions of this article, thecompany shall, in addition to the documents referred to in sub-article (2), deliver to the Registrar for registration - 
(a) a copy of a balance sheet prepared as at a date being
not more than four months before the date of theregistration of the alteration referred to in sub-article(1), together with a report of the company’s auditors inrelation to that balance sheet; and 
(b) a written statement by the company’s auditors that in
their opinion the balance sheet shows that at thebalance sheet date the amount of the company’s netassets was not less than the aggregate of its called upissued share capital and undistributable reserves; and
(c) a declaration by any director of the company that
between the balance sheet date and the date of deliveryof the alteration to the Registrar for registration, therehas been no change in the company’s financial positionthat has resulted in the amount of its net assetsbecoming less than the aggregate of its called upissued share capital and undistributable reserves.
In this sub-article, "net assets" shall have the same meaning
 140        CAP. 386. ]                         COMP ANIES
assigned to it under article  193(2).
(12) A private company which proceeds to change its status to a
public company in accordance with the provisions of this articl e
shall not allot or propose to allot shares for a considerationotherwise than in cash at any time between the date of the bala nce
sheet and the date of delivery of the alteration referred to in  sub-
article (11).
(13) Where a public company changes its status to a private
company in accordance with the provisions of this article, it s hall
be required to redeem the shares held by the dissenting members , if
they so request, on such terms as may be agreed or as the court , on
a demand of either the company or the dissenting members, think s
fit to order.
Undertakings 
required to report on payments to governments.
Added by:
XXXI. 2015.19.213A.  (1) Large undertakings, as defined in the Third Schedule,
and all public-interest entities active in the extractive indus try or
the logging of primary forests shall prepare and make public areport on payments made to governments on an annual basis.
(2) That obligation shall not apply to any undertaking governed
by the law of a Member State which is a subsidiary or parentundertaking, where both of the following conditions are fulfill ed:
(a) the parent undertaking is subject to the laws of a
Member State; and
(b) the payments to governments made by the undertaking
are included in the consolidated report on payments togovernments drawn up by that parent undertaking inaccordance with paragraph 3 of the Fourth Schedule.
(3) All undertakings which qualify to make the report
mentioned in sub-article (1) shall abide by the requirementsprovided for in the Fourth Schedule.
TITLE II - DISSOLUTION AND CONSEQUENTIAL 
WINDING UP OF COMPANIES
Causes of dissolution and consequential winding up.
Amended by:
IV . 2003.91.214. (1) A company shall be dissolved and consequently
wound up in the following cases -
(a) the company has by extraordinary resolution resolved
that the company be dissolved and consequentlywound up by the court;
(b) the company has by extraordinary resolution resolved
that the company be dissolved and consequentlywound up voluntarily.
(2) In addition to the modes of dissolution referred to in sub-
article (1) - 
(a) a company may be dissolved and wound up by the
court in the following cases - 
                    COMP ANIES              [CAP. 386.       141
(i) if the business of the company is suspended for
an uninterrupted period of twenty-four months;
(ii) the company is unable to pay its debts; and
(b) a company shall be dissolved by the court in the
following cases - 
(i) the number of members of the company is
reduced to below two and remains so reducedfor more than six months:
       Provided that this paragraph shall not apply
to single member companies specified in article
212(3);
(ii) the number of directors is reduced to below the
minimum prescribed by article 137 and remainsso reduced for more than six months;
(iii) the court is of the opinion that there are grounds
of sufficient gravity to warrant the dissolutionand consequent winding up of the company;
(iv) when the period, if any, fixed for the duration of
the company by the memorandum or articlesexpires, or the event occurs, if any, on theoccurrence of which the memorandum or articlesprovide that the company is to be wound up, andthe company in general meeting has not beforesuch expiry or event passed a resolution to bewound up voluntarily.
(3) In the cases of dissolution falling within sub-article (2)( b),
the court shall, at its discretion, determine whether the compa ny
shall be wound up by the court or voluntarily:
Provided that for the purposes of sub-paragraphs (ii) and
(iv) of the said paragraph ( b), the court at its discretion and upon
good cause being shown may, and for the purposes ofsub-paragraph (i) of the same paragraph, the court shall, befor e
ordering the dissolution of the company, allow a period of time  not
exceeding thirty days, within which the company may remedy thedefault and upon proof being submitted to it that any such defa ult
has been remedied, the court shall not order the company’sdissolution.
(4) Where a company continues carrying on business without
having at least two members beyond the period of six monthsreferred to in sub-article (2)( b)(i), a person who, for the whole or
any part of the period that the company carries on business aft er the
said six months, is a member of the company and knows that it i s
carrying on business with only one member, shall be heldunlimitedly and jointly and severally liable with the company f or
all the obligations contracted by the company for the whole per iod
or as the case may be, that part of it, from the lapse of the s ix
months until the dissolution of the company or until such time as
the default is remedied by the company in accordance with theproviso to sub-article (3).
(5) For the purposes of sub-article (2)( a)(ii), a company shall be
 142        CAP. 386. ]                         COMP ANIES
deemed to be unable to pay its debts - 
Cap. 12.(a) if a debt due by the company has remained unsatisfied
in whole or in part after twenty-four weeks from theenforcement of an executive title against the companyby any of the executive acts specified in article 273 ofthe 
Code of Or ganization and Civil Procedure ; or
(b) if it is proved to the satisfaction of the court that the
company is unable to pay its debts, account beingtaken also of contingent and prospective liabilities ofthe company.
(6) Where a company has passed a resolution in accordance
with sub-article (1)( a), it shall be required to give the notice
specified in article 265(1) and sub-article (2) thereof shall a pply.
(7) For the purposes of this Title, a company shall be wound up
by the court if it is wound up in accordance with the provision s of
Sub-Title I of this Title; and a company shall be wound upvoluntarily if it is wound up in accordance with the provisions  of
Sub-Title II of this Title.
Meaning of 
"contributory".215.  The term "contributory" means every person liable to
contribute to the assets of a company in the event of its disso lution,
and the provisions of articles 216 and 217 shall apply fordetermining the persons so liable:
Provided that a reference in a company’s memorandum or
articles to a contributory shall not, unless the context otherw ise
requires, include a person who is a contributory only by virtue  of
article 217.
Liability as 
contributories of present and past members.216.  In the winding up of a company every present and past
member shall be liable to contribute to the assets of the compa ny to
an amount sufficient for payment of its debts and liabilities, and the
costs, charges and expenses of the winding up, and for theadjustment of rights of the contributories among themselves,subject to the following qualifications - 
(a) no contributions shall be required from any member
exceeding the amount, if any, unpaid on the shares inrespect of which he is liable as a present or pastmember;
(b) a past member shall not be liable to contribute in any
of the following cases - 
(i) if he has ceased to be a member for at least one
year before the dissolution of the company;
(ii) in respect of any debt or liability contracted after
he has ceased to be a member;
(iii) unless it appears to the court that the existing
members are unable to satisfy the contributionsrequired to be made by them in pursuance of this
Act;
(c) a sum due to any member of a company, as a member,
by way of dividends, profits or otherwise shall not be
                    COMP ANIES              [CAP. 386.       143
deemed to be a debt of the company payable to that
member in the case of competition between himselfand any other creditor not being a member of thecompany, but any such sum may be taken into accountfor the purpose of the final adjustment of the rights ofthe contributories among themselves.
Liability of past 
directors and shareholders.
Amended by:
IV . 2003.92.217. (1) The provisions of sub-articles (2) and (3) shall only
apply following the dissolution of a company where a companybefore its dissolution - 
(a) has made a payment out of capital in respect of the
redemption or purchase of any of its own shares,which payment is referred to in the followingprovisions of this article as "the relevant payment";and
(b) the aggregate amount of the company’s assets and the
amounts paid by way of contribution to its assets interms of article 216, apart from the provisions of thisarticle, is not sufficient for payment of its debts andliabilities, and the expenses of the winding up.
(2) Where the dissolution has occurred within twelve months of
the date on which the relevant payment was made, then - 
(a) the person from whom the shares were redeemed or
purchased, and
(b) the directors who authorised the redemption or
purchase, 
shall, so as to enable the insufficiency referred to in sub-art icle
(1)(b) to be met, be liable to contribute to the company’s assets to
the extent referred to in sub-article (3).
(3) A person from whom any of the shares were redeemed or
purchased shall be liable to contribute an amount not exceeding  so
much of the relevant payment as was made by the company inrespect of his shares; and the directors shall be jointly and s everally
liable with that person to contribute that amount.
SUB-TITLE I - WINDING UP BY THE COURT 
Chapter I - General Provisions
Dissolution and 
winding up application.
Amended by: 
XXIV .1995.362;IV . 2003.93;IX. 2003.86.218. (1) A request to the court (hereinafter referred to as the
"winding up application") for the - 
(a) winding up of a company by the court in accordance
with article 214(1)( a); or 
(b) dissolution and winding up of a company by the court
in accordance with article  214(2)( a); or
(c) dissolution and winding up of a company in
accordance with article  214(2)( b),
shall be made by means of an application which may be made
either by the company following a decision of the general meeti ng
or by its board of directors, or by any debenture holder, credi tor or
 144        CAP. 386. ]                         COMP ANIES
creditors, or by any contributory or contributories:
Provided that an application in terms of paragraphs ( b) or
(c) may also be made by any shareholder or director of the
company.
(2) Except as provided in sub-article (3), a contributory shall
not be entitled to make a winding up application unless - 
(a) the shares in respect of which he is a contributory, or
some of them, either were originally allotted to him, orhave been held by him, and registered in his name, forat least six months during the eighteen months beforethe date of the company’s dissolution, or havedevolved on him through the death of a formershareholder; or
(b) the number of members was reduced and remains
reduced below the minimum prescribed by article 72while he holds shares in respect of which he is acontributory.
(3) Notwithstanding the provisions of sub-article (1), a person
who is liable under article 217 to contribute to a company’s as sets
in the event of its dissolution may only file a winding upapplication on either of the grounds set out in ar ticle 214(2)( a)(ii)
and ( b)(iii).
(4) The Registrar may file a winding up application where it
appears to him that it is expedient and in the public interest that a
company should be dissolved and wound up for any of the reasonsset out in article 214(2)( b)(ii) and (iii).
(5) By virtue of article 294, a winding up application for a
winding up by the Court may be filed notwithstanding that acompany is being wound up voluntarily. Such an application mayalso be made by the official receiver appointed in accordance w ith
the provisions of article 225.
(6) The directors, the company secretary, and every
contributory and creditor of the company shall be entitled to m ake
submissions on the hearing of a winding up application made und er
this article.
(7) In the event of a winding up application made under sub-
article (1)( c), if the court decides that the company shall be wound
up voluntarily, the provisions of Sub-title II of this Title ot her than
article 265 shall apply.
(8) On the making of a winding up application, a copy thereof
shall forthwith be forwarded by the Registrar of Courts to theRegistrar for registration.
Powers of the 
court.
Amended by:
IV . 2003.94.219.  (1) On the hearing of the winding up application, the
court may either dismiss the application or make an order acced ing
thereto (hereinafter referred to as a "winding up order") and i n
either case make such other orders, including provisional order s,
and adjourn the hearing conditionally or otherwise as it thinks  fit;
but no winding up order shall be made before the application ha s
                    COMP ANIES              [CAP. 386.       145
been served on such persons as the court in the circumstances, and
upon information given by the applicant, deems it appropriate t o
call upon to make their submissions.
(2) Notwithstanding the provisions of sub-article (1), where the
Court is satisfied that the requirements of article 218(1)( a) have
been complied with, the Court shall accede to the application.
Power to stay 
proceedings against company.220.  At any time after the filing of a winding up application,
and before a winding up order has been made, the company, or an y
creditor or contributory, may apply to the court for a stay of judicial
proceedings pending against the company, and the court may staythose proceedings accordingly on such terms as it thinks fit.
Dispositions of 
property etc., after date of deemed dissolution.221.  In a winding up by the court, any disposition of the
property of the company, including any rights of action, and an y
transfer of shares, or alteration of the status of the members of the
company, made after the date of its deemed dissolution, shall b e
void, unless the court otherwise orders.
Warrants not to be 
carried into effect against company.
Amended by:
IV . 2003.95.222.  When a company is being wound up by the court, any act
or warrant, whether precautionary or executive, other than awarrant of prohibitory injunction, issued or carried into effec t
against the company after the  date of its deemed dissolution, s hall
be void.
Deemed date of 
dissolution.
Amended by:
IV . 2003.96.223. (1) Where a winding up order has been made, the
company shall be deemed to have been dissolved at the time of t he
filing of the winding up application:
Provided that where a winding up order has been made in
terms of article 214(2)( b)(iii), the company shall be deemed to have
been dissolved on the date when the winding up order is made:
Provided further that where a winding up order has been
made by virtue of article 218(1)( a), the date of dissolution shall be
the date of passing of the resolution for dissolution andconsequential winding up by the Court or such later date as may  be
specified in the said resolution.
(2) Notwithstanding the provisions of sub-article (1), where,
before the filing of a winding up application, an extraordinaryresolution had been passed by the company for it to be dissolve d
and consequently wound up voluntarily, the company shall bedeemed to have been dissolved at the time of the passing of theresolution, and unless the court, upon proof of fraud or mistak e
thinks fit otherwise to direct, all proceedings taken in the vo luntary
winding up shall be deemed to have been validly taken.
Consequences of a 
winding up order.
Amended by: 
XXIV .1995.362;IV . 2003.97.224. (1) On the making of a winding up order, or on the
dismissal of a winding up application, a copy thereof shallforthwith be forwarded by the Reg istrar of Courts to the Regist rar
for registration.
(2) Where a winding up order has been made or a provisional
administrator has been appointed in accordance with the provisi ons
of article 228, no action or proceeding shall be proceeded with  or
commenced against the company or its property except by the lea ve
of the court and subject to such terms as the court may impose.
 146        CAP. 386. ]                         COMP ANIES
Chapter II - Official Receiver
Official receiver.
Amended by:
XVII. 2002.232;XX. 2013.88;V .2020.33.225. (1) The Minister shall appoint a senior official of the
Agency to be the official receiver for the purposes of this Act and
may at any time terminate any such appointment or designation.
 (2) The official receiver may authorise in writing any individual
to perform any of the functions assigned to the official receiv er under
this Act or any other law.
(3) Notwithstanding anything to the contrary contained in this A ct
or any other law, the official receiver and any other individua l
authorised in terms of sub-article (2), shall be exempt from an y
personal liability whatsoever, including any liability in damag es for
anything done or omitted to be done in the discharge or purport ed
discharge of any of his functions under this Act or under any o ther law,
or otherwise in the exercise of his official duties, unless the  act or
omission is shown to have been done or omitted to be done, as t he case
may be, in bad faith.
Statement of 
company’s affairs to be submitted to official receiver.226. (1) Where the court has made a winding up order or
appointed a provisional administrator, there shall be made out and
submitted to the official receiver a  statement as to the affair s of the
company in the prescribed form, or in such form as the officialreceiver accepts, verified by affidavit, and showing the partic ulars
of its assets, debts and liabilities, the names, residences andoccupations of its creditors, the securities held by themrespectively, the dates when the securities were respectively g iven,
and such further or other information as may be prescribed or a s the
official receiver may require.
(2) The statement shall be submitted and verified by one or
more of the persons who are at the relevant date the directors of the
company and by such of the per sons hereinafter in this sub-arti cle
mentioned, as the official receiver may require to submit and v erify
the statement, that is to say, persons - 
(a) who are or have been officers of the company at any
time in the three years immediately preceding the dateof the winding up order;
(b) who have taken part in the formation of the company
at any time within twelve months before the relevantdate;
(c) who are in the employment of the company, or have
been in the employment of the company within thesaid twelve months, and are in the opinion of theofficial receiver capable of giving the informationrequired;
(d) who are or have been within the said twelve months
officers of or in the employment of a company whichis, or within the said twelve months was, an officer ofthe company to which the statement relates.
(3) The statement shall be submitted within twenty-one days
                    COMP ANIES              [CAP. 386.       147
from the relevant date or within such extended period as the of ficial
receiver or the court may for special reasons appoint.
(4) Any person making or concurring in making the statement
and affidavit required by this article shall be allowed, and sh all be
paid by the official receiver or provisional administrator, as the
case may be, out of the assets of the company such costs andexpenses incurred in and about the preparation and making of th e
statement and affidavit as the official receiver may considerreasonable subject to an appeal to the court.
(5) The official receiver, if he thinks fit, may - 
(a) at any time release a person from an obligation
imposed on him under sub-article (1) or (2); or
(b) either when giving the period mentioned in sub-article
(3) or subsequently, extend the period so mentioned,
and where the official receiver has refused to exercise a power
conferred by this sub-article, the court, if it thinks fit, may  exercise
it.
(6) If any person, without reasonable excuse, makes default in
complying with the requirements of this article, he shall be li able to
a penalty, and, for every day during which the default continue s, to
a further penalty.
(7) Any person stating himself in writing to be a creditor or
contributory of the company shall be entitled personally or by his
agent at all reasonable times, on payment of the prescribed fee , to
inspect the statement submitted in pursuance of this article, a nd to a
copy thereof or extract therefrom.
(8) In this article the expression "relevant date" means, in a
case where a provisional administrator is appointed, the date o f his
appointment, and, in a case where no such appointment is made, the
date of the winding up order.
Report by of ficial 
receiver.227. (1) In a case where a winding up order is made, the
official receiver shall, as soon as practicable after receipt o f the
statement to be submitted under article 226 or, in a case where  he
or the court orders that no statement shall be submitted, as so on as
practicable after the date of the order, carry out such investi gations
as he may deem appropriate and submit to the court a preliminar y
report, if any, as he thinks fit - 
(a) as to the amount of share capital issued, and paid up,
and the estimated amount of the assets and liabilities;
(b) if the company has failed, as to the causes of the
failure; and
(c) whether in his opinion further enquiry is desirable as
to any matter relating to the promotion, formation orfailure of the company or the conduct of the businessthereof.
(2) The official receiver may also, if he thinks fit, make a
further report, or further reports, stating the manner in which  the
company was formed and whether in his opinion any fraud has bee n
 148        CAP. 386. ]                         COMP ANIES
committed by any person in its promotion or formation or by any
officer of the company since the formation thereof, and any oth er
matter which, in his opinion, is desirable to bring to the noti ce of
the court.
(3) If the official receiver states in any such further report t hat
in his opinion a fraud has been committed as specified in sub-article (2), the court shall have the further powers provided i n
article 260, without prejudice to the exercise of any other pow ers it
may have.
Chapter III - Liquidators in a winding up by the court
Appointment and 
powers of provisional administrator.228. (1) The court may by order appoint a provisional
administrator at any time after the presentation of a winding u p
application and before the making of a winding up order, and ei ther
the official receiver or any other competent person may be soappointed.
(2) The provisional administrator shall carry out such functions
and powers in relation to the administration of the estate orbusiness of the company as the court may specify in the orderappointing him.
(3) The provisional administrator holds office until such time
as the winding up order is made or the winding up application i s
dismissed unless before such time he resigns or he is removed b y
the court upon good cause being shown.
Functions of 
official receiver in relation to office of liquidator.
Amended by:
XX. 2013.89.229. (1) The official receiver, by virtue of his office and upon
notification by the Court, becomes the liquidator of the compan y and
continues in office until another person becomes liquidator und er the
provisions of this Title, and shall, upon notification by the C ourt, be
the liquidator during any vacancy.
(2) The official receiver shall, within fourteen days of notific ation
by the court, deliver an authenticated copy of such notificatio n to the
Registrar for registration.
(3) At any time when he is the liquidator of the company, the
official receiver may summon sepa rate meetings of the company’s
creditors and contributories for the purpose of choosing a pers on to
be liquidator of the company in place of the official receiver.
(4) It shall be the duty of the official receiver to summon
meetings under sub-article (3) if he is at any time requested t o do so
by one-fourth in value of the company’s creditors.
(5) Without prejudice to the provisions of sub-articles (3) and
(4), the official receiver shall within a period of twelve week s from
the date of the winding up order give notice to the court and t o the
company’s creditors and contributories of his intentions whethe r or
not to summon the said meetings. The notice shall indicate the right
of the creditors arising under sub-article (3).
                    COMP ANIES              [CAP. 386.       149
Choice of 
liquidator at meetings of creditors and contributories.
Amended by:
IV . 2003.98.230. (1) The provisions of this article shall apply where a
company is being wound up by t he court and separate meetings of
the company’s creditors and contributories are summoned for thepurpose of choosing a person to be liquidator of the company inaccordance with article 229.
(2) The creditors and the contributories at their respective
meetings may nominate a person to be liquidator. The nominationby the creditors shall be made by resolution of the creditors, and
the nomination by the contributories shall be made by a resolut ion
of the contributories.
(3) The liquidator shall be the person nominated by the
creditors or, where no person has been so nominated, the person , if
any, nominated by the contributories.
(4) Where no person is nominated by either the creditors or the
contributories to act as liquidator, the official receiver may,  at any
time, apply to the court for the appointment of a liquidator.
Meetings of 
creditors and contributories.231. (1) The dates of meetings of creditors and contributories
shall be fixed and the meetings shall be summoned by theliquidator. 
(2) The notices of meetings of creditors and contributories
shall state the time and place appointed for the respective mee tings. 
Creditors entitled 
to vote.232. (1) In the case of a first meeting of creditors or of an
adjournment thereof a person shall not be entitled to vote as acreditor unless he has duly lodged with the liquidator, not lat er than
the time mentioned for that purpose in the notice convening themeeting or adjourned meeting, a proof of the debt which he clai ms
to be due to him from the company.
(2) In the case of a subsequent meeting of creditors held in a
winding up by the court, a person shall not be entitled to vote  as a
creditor unless he has lodged with the liquidator a proof of th e debt
which he claims to be due to him from the company and such proo f
has been admitted wholly or in part before the date on which th e
meeting is held.
(3) The chairman as provided for in article 297(3) shall have
power to admit or reject a creditor’s proof of his debt for thepurpose of voting, but his decision shall be subject to appeal to the
court. If he is in doubt whether a creditor’s proof of his debt  shall
be admitted or rejected, the chairman shall mark it as objected  to
and allow the creditor to vote, subject to the vote being decla red
invalid in the event of the objection being sustained.
(4) A guarantor of a debt owed by the company shall not be
deemed a creditor for the purposes of this Title unless he hasdischarged the guaranteed debt in full.
Notice of first 
meeting to officers of company.233. (1) The official receiver shall also give to each of the
officers of the company who, in his opinion ought to attend the  first
meetings of creditors and contributories, seven days’ notice of  the
time and place appointed for each meeting.
(2) It shall be the duty of every officer who is given notice of
 150        CAP. 386. ]                         COMP ANIES
such meeting to attend if so required by the official receiver and if
such officer fails to attend the official receiver shall report  such
failure to the court.
Summary of 
statement of affairs.234. (1) The official receiver shall also, as soon as practicable
before the first meeting, send to each creditor mentioned in th e
company’s statement of affairs, and to each person appearing fr om
the company’s accounting records or otherwise to be a contribut ory
of the company, a summary of the company’s statement of affairs ,
including the causes of its failure, and any observations there on
which the official receiver may think fit to make, but theproceedings at a meeting shall not be invalidated by reason of any
summary aforesaid not having been sent or received before themeeting.
(2) Where prior to the winding up order, winding up of the
company has commenced voluntarily, the official receiver may, i f
in his absolute discretion he sees fit to do so, send to the pe rsons
aforesaid or any of them an acc ount of such voluntary winding u p
showing how such winding up has been conducted and how theproperty of the company has been disposed of and any furtherobservations he may think fit to make.
Where person 
other than the official receiver is appointed liquidator.235. (1) Where in the winding up of a company by the court a
person other than the official receiver is appointed liquidator , that
person - 
(a) shall not be capable of acting as liquidator until he has
notified his appointment to the Registrar;
(b) shall give the official receiver such information and
such access to and facilities for inspecting theaccounts, accounting records and documents of thecompany and generally such aid as may be requisitefor enabling the official receiver to perform his dutiesunder this Act.
(2) The Registrar shall on receipt of the notice of appointment
specified in sub-article (1)( a) register it.
(3) Until the person appointed to act as liquidator is capable o f
acting within the meaning of sub-article (1)( a), the official receiver
shall continue to act as liquidator.
General provisions 
as to liquidators.
Amended by:
XX. 2013.90.236. (1) A liquidator appointed in accordance with the
provisions of article 230 may resign or, on the application of any
creditor or contributory, may be removed by the court if it issatisfied that there exist sufficient grounds for his removal.
(2) The official receiver and any person appointed as liquidator  by
the Court shall be remunerated out of the assets of the company  or
otherwise, and on such basis as the Court may direct.
(3) More than one person may be appointed to exercise the
function of liquidator of a compa ny, and the remuneration of ea ch
liquidator so appointed shall be determined on such basis as th e
court may direct.
(4) A vacancy resulting from the death or resignation of a
                    COMP ANIES              [CAP. 386.       151
liquidator or from his removal by the court, shall be filled by  the
court. 
(5) If more than one liquidator is appointed by the court, the
court shall declare whether any act which is by this Act requir ed or
authorised to be done by the liquidator is to be done by all or  any
one or more of the persons so appointed.
(6) Subject to the provisions of article 305, the acts of a
liquidator shall be valid notwithstanding any defects that mayafterwards be discovered in his appointment.
Custody and 
control of company’s property.237. Where a company is being wound up by the court, the
liquidator or the provisional administrator, as the case may be , shall
take into his custody or under his control all the property and  all
rights to which he has reasonabl e cause to believe the company to
be entitled.
Powers of 
liquidator.
Amended by:
IV . 2003.99.238. (1) The liquidator in a winding up by the court shall have
the power, with the sanction either of the court or of the liqu idation
committee appointed under the provisions of Chapter IV of thisSub-title -
(a) to bring or to defend any action or other legal
proceeding in the name and on behalf of the company;
(b) to carry on the business of the company so far as may
be necessary for the beneficial winding up thereof;
(c) to pay creditors according to their ranking at law;
(d) to make any compromise or arrangement with
creditors or persons claiming to be creditors, or havingor alleging themselves to have any claim, present orfuture, certain or contingent, ascertained or which maybe due in damages against the company or whereby thecompany may be rendered liable, and to refer any suchmatter to arbitration;
(e) to make calls on contributories or alleged
contributories and to effect any compromise orarrangement in relation to debts, liabilities and claimsof the company present or future, certain orcontingent, ascertained or which may be due indamages, subsisting or supposed to subsist betweenthe company and a contributory or allegedcontributory or other debtor or alleged debtor, and allquestions in any way relating to or affecting the assetsor the winding up of the company, on such terms asmay be agreed, and take any security for the dischargeof any such call, debt, liability or claim and give acomplete discharge in respect thereof;
(f) to represent the company in all matters and to do all
such things as may be necessary for winding up theaffairs of the company and distributing its assets:
Provided that the Court may provide by an order that the
liquidator may, where there is no liquidation committee, exerci se
any of the powers mentioned in paragraphs ( a) or ( b) without the
 152        CAP. 386. ]                         COMP ANIES
sanction of the Court.
(2) The liquidator in a winding up by the court shall, in
particular, have the power -
(a) to sell the movable and immovable property, including
any right, of the company by public auction or privateagreement with power to transfer the whole or any partthereof;
(b) to do all acts and to execute, in the name and on behalf
of the company, all deeds, receipts and otherdocuments;
(c) to raise on the security of the assets of the company
any money requisite;
(d) to appoint a mandatory to act for him in his capacity as
liquidator for particular purposes.
(3) The exercise by the liquidator in a winding up by the court
of the powers conferred by this article shall be subject to thecontrol of the court, and any creditor or contributory may appl y to
the court with respect to any exercise or proposed exercise of any
of those powers.
Exercise and 
control of liquidator’s powers.239. (1) Subject to the provisions of this Act, the liquidator of
a company which is being wound up by the court shall, in theadministration of the assets of the company and in the distribu tion
thereof among its creditors, have regard to any directives that  might
be given by resolution of the creditors or contributories at an y
general meeting or by the liquidation committee, and any direct ives
given by the creditors and contr ibutories in common shall, in c ase
of conflict with any directives given by the liquidation commit tee,
be deemed to override such latter directives; otherwise thedirectives given by the liquidation committee shall prevail.
(2) The liquidator may summon general meetings of the
creditors or contributories for the purpose of ascertaining the ir
wishes, and it shall be his duty to summon meetings at such tim es
as the creditors or contributories, by resolution, either at th e
meeting appointing the liquidator or otherwise, may direct, orwhenever requested in writing to do so by one-fourth in value o f
the creditors or contributories, as the case may be.
(3) The liquidator may apply to the court for directions in
relation to any particular matter arising under the winding up.
(4) If any person is aggrieved by any act or decision of the
liquidator, that person may apply to the court and the court ma y
confirm, reverse or modify the act or decision complained of, a nd
make such order on the matter as it thinks just.
Books to be kept 
by liquidator.240.  Every liquidator of a company which is being wound up
by the court shall keep proper b ooks in which he shall cause to  be
made entries or minutes of proceedings at meetings, and of suchother matters as may be prescribed.
                    COMP ANIES              [CAP. 386.       153
Payments of 
liquidator into bank.
Amended by:
L.N. 425 of 2007;XX. 2013.91.241. (1) Upon his appointment the liquidator shall notify the
Registrar of any bank account which the liquidator shall use fo r the
purposes of receiving and making payments on behalf of thecompany. The liquidator shall not be entitled to receive and ma ke
payments until he has made such notification.
(2) If any such liquidator retains for more than ten days, other
than in a bank account mentioned in sub-article (1), a sum exce eding
five hundred euro (500) or such other amount as the Registrar in any
particular case authorizes him to retain, then, unless he expla ins the
retention to the satisfaction of the Registrar, the liquidator shall pay
interest on the amount so retained in excess, at the annual rat e of
two percentage points above the Central Bank of Malta minimumdiscount rate and shall be liable to forfeiture of all or such part of
his remuneration as the court may think just, and to be removedfrom his office by the court, and shall furthermore be liable t o pay
any expenses occasioned by his default.
(3) A liquidator of a company which is being wound up by the
court shall not pay any sums r eceived by him as liquidator into  an
account or accounts other than an account or accounts which hasbeen notified to the Registrar.
(4) It shall not be lawful to issue precautionary or executive
warrants over any accounts opened by the liquidator in accordan ce
with this article.
Audit of 
liquidator’s accounts.242. (1) Every liquidator of a company which is being wound
up by the court shall, at such times as may be prescribed but n ot
less than twice in each year during his tenure of office, send to the
Registrar, and to such other place as the Registrar may direct,  an
account of his receipts and payments as liquidator.
(2) The account shall be in a proper form, shall be made in
duplicate, and shall be duly certified by the liquidator:
Provided that the Minister may make regulations
prescribing the proper form in which the account is to be made.
(3) The Registrar may, at the company’s expense, cause such
account to be audited, and for the purpose of the audit theliquidator shall furnish the auditor appointed by the Registrar  with
such vouchers and information as the auditor may require and th e
auditor may at any time require the production of and inspect a ny
accounting records or documents kept by the liquidator.
(4) When the account has been audited, one copy thereof shall
be delivered to the Registrar for registration and the other co py
shall be delivered to the court for filing, and each copy shall  be
open to inspection of any person on payment of the prescribed f ee.
Control over 
liquidators.243. (1) If an application is made to the court by any creditor
or contributory complaining on the conduct of a liquidator of acompany the court shall inquire into the matter and take such a ction
thereon as it may think expedient.
(2) The Registrar may at any time require any liquidator of a
company which is being wound up by the court to answer any
 154        CAP. 386. ]                         COMP ANIES
inquiry in relation to any winding up in which he is engaged, a nd
the Registrar may, if he thinks fit, apply to the court to exam ine the
liquidator or any other person on oath concerning the winding u p.
(3) The Registrar may also direct an investigation to be made
of the accounts, accounting records and documents of theliquidator. 
Release of 
liquidator from his appointment.
Amended by: 
XXIV .1995.362.244. (1) When the liquidator of a company which is being
wound up by the court has realised all the property of the comp any,
or so much thereof as can, in his opinion, be realised withoutneedlessly protracting the liquidation, and has distributed a f inal
payment, if any, to the creditors, and has adjusted the rights of the
contributories among themselves, and made a final return, if an y, to
the contributories, or has resigned, the court shall, on theliquidator’s application, cause a report to be prepared on theliquidator’s accounts at the company’s expense. On being satisf ied
that the liquidator has complied with the requirements of this Act
and such other requirements, if any, as may be laid down by it and,
after taking into consideration the report and any objection wh ich
may be raised by any creditor or contributory or person interes ted,
the court shall proceed to release the liquidator from hisappointment.
(2) The Registrar of Courts shall forthwith deliver a notice of
the release to the Registrar for registration.
Chapter IV - Liquidation Committees in a winding up by the 
court
Determination 
whether committee is to be appointed.245. (1) When a winding up order has been made by the court,
the separate meeting of the creditors referred to in article 22 9
summoned for the purpose of choosing a liquidator in place of t he
official receiver shall determine further whether or not to app oint a
liquidation committee to act with the liquidator and who are to  be
the members of the committee, if appointed.
(2) Where a liquidation committee has not been appointed in
accordance with the provisions of sub-article (1), the liquidat or,
other than the official receiver, may at any time, if he thinks  fit,
summon a separate meeting of the company’s creditors for thepurpose of determining whether such a committee should beappointed and, if it is so determined, of appointing it.
(3) Where a liquidation committee has not been appointed in
accordance with the provisions of sub-article (1), the liquidat or,
other than the official receiver, shall summon a meeting of cre ditors
for the appointment of such a committee if he is requested to d o so
by one-fourth in value of the company’s creditors.
Constitution and 
proceedings of liquidation committee.
Amended by:
IV . 2003.100.246. (1) The liquidation committee shall consist of not more
than five creditors of the company elected by the meeting ofcreditors. 
(2) Where the meeting of creditors does not appoint a
                    COMP ANIES              [CAP. 386.       155
liquidation committee, the meeting of contributories may appoin t
one of their members to make an application to the court for anorder to the liquidator that a further meeting of creditors besummoned for the purpose of appointing a liquidation committee.
(3) If the meeting of creditors so summoned does not appoint a
liquidation committee, the meeting of contributories may do so.
(4) The committee shall then consist of not less than three and
not more than five contributories elected by that meeting.
(5) The committee shall meet at such times as they may from
time to time determine, and, failing such appointment, at least  once
every six months, and the liquidator or any member of thecommittee may also call a meeting of the committee as and whenhe thinks necessary.
(6) A meeting of the committee may not be held unless a
majority in number of the committee is present and decisions sh all
be taken by a majority in number of the members present at themeeting.
(7) A member of the committee may resign by notice in writing
signed by him and delivered to the liquidator.
(8) If a member of the committee is absent from five
consecutive meetings of the committee without the leave of thos e
members who together with himself represent the creditors orcontributories, as the case may be, his office shall thereuponbecome vacant.
(9) A member of the committee may be removed by a
resolution of a meeting of the creditors, if he represents cred itors,
or by a resolution of a meeting of the contributories, if herepresents contributories, in accordance with article 298:
Provided that at least seven days’ notice of the meeting has
been given, stating the object of the meeting.
(10) On a vacancy occurring in the committee, the liquidator
shall forthwith summon a meeting of creditors or contributories , as
the case may require, to fill the vacancy, and the meeting may,  by
resolution, re-appoint the same or appoint another creditor orcontributory to fill the vacancy:
Provided that if the liquidator, having regard to the state of
the winding up, is of the opinion that it is unnecessary for th e
vacancy to be filled he may apply to the court and the court ma y
make an order that the vacancy shall not be filled, or shall no t be
filled except in such circumstances as may be specified in the order.
(11) The continuing members of the committee, if not less than
two, may act notwithstanding any vacancy in the committee. 
Powers of official 
receiver where there is no committee.247.  Where there is no liquidation committee, the official
receiver may, on the request of the liquidator, do any act or t hing or
give any direction or permission which is by this Act authorise d or
required to be done by the committee.
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Chapter V - General Powers of the court in a winding up 
by the court
Power to stay 
winding up.
Amended by: 
XXIV .1995.362.248. (1) The court may at any time after a winding up order,
on the application either of the liquidator or the official rec eiver or
any creditor or contributory, and on proof to the satisfaction of the
court that all proceedings in relation to the winding up ought to be
stayed, make an order staying the proceedings, for such duratio n
and on such terms and conditions as the court thinks fit. Any s uch
stay of proceedings shall not affect the continuing validity an d
operation of the winding up orders.
(2) On an application under this article the court may, before
making an order, require the official receiver or liquidator tofurnish to the court a report with respect to any facts or matt ers
which are in its opinion relevant to the application.
(3) A copy of every order made under this article shall
forthwith be forwarded by the Reg istrar of Courts to the Regist rar
for registration.
Settlement of list 
of contributories and application of assets.249.  As soon as may be after making a winding up order, the
court shall draw up a list of contributories and shall have the  power
to rectify the register of members, if required, and shall caus e the
assets of the company to be collected, and applied in the disch arge
of the company’s liabilities in accordance with the provisions of
article 302:
Provided that, where it appears to the court that it will not
be necessary to make calls on or adjust the rights of contribut ories,
the court may dispense with the drawing up of a list ofcontributories.
Delivery of 
property to liquidator.250.  The court may, at any time after making a winding up
order, require - 
(a) any contributory for the time being on the list of
contributories; and
(b) any person who holds any money, property or
accounting records and documents in his hands towhich the company is prima facie  entitled, to pay,
deliver, convey, transfer or otherwise hand over suchmoney, property, accounting records or documents tothe liquidator forthwith or within such time as thecourt directs. 
Debts due by 
contributory and extent of set-off.251. (1) The court may at any time after making a winding up
order, make an order on any contributory for the time beingappearing on the list of contributories to pay, in the mannerdirected by the order, any money due from him to the company,exclusive of any money payable by him by virtue of any call inpursuance of the provisions of this Act.
(2) When all the creditors are paid in full, any money due on
any account whatever to a contributory from the company may be
                    COMP ANIES              [CAP. 386.       157
set-off against any subsequent call made on him.
Power to make 
calls.252. (1) The court may, at any time after making a winding up
order, and either before or after it has ascertained the suffic iency of
the assets of the company, make calls on all or any of thecontributories for the time being appearing on the list ofcontributories to the extent of their liability, for payment of  any
money which the court considers necessary to satisfy the debts and
liabilities of the company, and the costs, charges and expenses  of
winding up, and for the adjustment of the rights of thecontributories among themselves, and make an order for paymentof any calls so made.
(2) In making a call the court may take into consideration the
probability that some of the contributories may partly or fully  fail
to pay the call.
Order of court to 
be conclusive evidence.253.  An order made by the court on a contributory shall, subject
to any right of appeal, be conclusive evidence that the money, if
any, thereby appearing to be due or ordered to be paid, is due;  and
all other pertinent matters stated in the order shall be taken as truly
stated as against all persons and in all proceedings.
Appointment of 
special manager.254. (1) The liquidator or provisional administrator may, if
satisfied that the nature of the estate or business of the comp any, or
the interests of the creditors or contributories generally, req uire the
appointment of a special manager of the estate or business of t he
company other than himself, apply to the court, and the court m ay,
on such application, by order appoint a special manager of the said
estate or business to act during such time as the court may dir ect,
with such functions and powers as  may be entrusted to him by th e
court in the order appointing him. The special manager shallrestrict his activities to the said functions and powers and to  such
acts as may be necessary or consequential thereto.
(2) The special manager shall give an account of his
management as the court may direct.
(3) The special manager shall receive such remuneration as
may be fixed by the court.
Fixing of time for 
proofs of debt.
Amended by:
IV . 2003.101.255.  The court may fix a time or times within which creditors
are to prove their debts or claims or are to be excluded from t he
benefit of any distribution made before those debts are proved.
Adjustments of 
rights of contributories.256.  The court shall adjust the rights of the contributories
among themselves and distribute any surplus among the personsentitled thereto. 
Inspection of 
books of company.
Amended by:
IV . 2003.102.257. (1) The court may, at any time after making a winding up
order, make such order for inspection of accounts, accountingrecords and documents of the company by creditors andcontributories as the court thinks fit, and any accounts, accou nting
records and documents in the possession of the company may beinspected by creditors and contributories in accordance with th at
order.
(2) Nothing contained in this article shall be construed as
 158        CAP. 386. ]                         COMP ANIES
excluding or restricting any right s deriving from any law of Ma lta
of a government department or other authority or person actingunder the authority of any such department or authority.
Payments of costs 
of winding up out of assets.
Amended by:
XX. 2013.92;XI. 2017.12.258. (1) The court may, in the event of the assets being
insufficient to satisfy the liabilities, make an order as to th e
payment out of the assets of the costs, charges and expensesincurred in the dissolution and winding up in such order of pri ority
as the court thinks fit.
(2) In so doing the court shall have regard to the following
general order of priority - 
(a) expenses properly chargeable or incurred by the
official receiver or the liquidator in preserving,realising or collecting any of the assets of thecompany;
(b) any other expenses incurred or disbursements made by
the official receiver or under his authority, includingthose incurred or made in carrying on the business ofthe company;
(c) the remuneration of the provisional administrator, if
any; 
(d) any necessary disbursements by the special controller
in the course of his office in terms of articles 329A and329B;
(e) the remuneration of the special controller;
(f) the costs of the applicant, and of any person appearing
on the application whose costs are allowed by thecourt;
(g) the remuneration of the special manager, if any;
(h) any amount payable to a person employed or
authorised to assist in the preparation of a statement ofaffairs or of account; 
(i) any allowance made by order of the court, towards
costs on an application for release from the obligationto submit a statement of affairs, or for an extension oftime for submitting such a statement;
(j) any necessary disbursements by the liquidator in the
course of his administration, including any expensesincurred by members of the liquidation committee ortheir representatives and allowed by the liquidator;
(k) the remuneration of any person employed by the
liquidator to perform any services for the company, asrequired or authorised by the provisions of this Act;
(l) the remuneration of the official receiver and of the
liquidator;
(m)  any new financing granted to the company for the
purpose of a recovery procedure in terms of articles 329Aand 329B.
                    COMP ANIES              [CAP. 386.       159
(3) For the purposes of sub-article (2), "official receiver" sha ll
include any individual authorised in terms of article 225(2).
Summoning of 
persons suspected of having property of the company, etc.259.  The court may, at any time after the appointment of a
provisional administrator or the making of a winding up order,summon before it any officer of the company or person known orsuspected to have in his possession any property of the company  or
supposed to be indebted to the company, and any person whom thecourt deems capable of giving information concerning thepromotion, formation, trade, dealings, affairs or property of t he
company. The court may require any such officer or person toproduce any accounting records and documents in his custodyrelating to the company.
Power to order 
examination of promoters and officers.
Amended by:
XVII. 2002.233.260. (1) Where a winding up order has been made by the
court, and the official receiver has made a report under this A ct
stating that in his opinion a fraud has been committed by anyperson in the promotion or formation of the company or by anofficer of the company in relation to the company since itsformation, the court may direct that person or officer to atten d
before the court on a day appointed by the court for that purpo se
and be examined as to the promotion or formation or the conduct  of
the business of the company or as to his conduct and dealings a s
officer thereof.
(2) The Official Receiver shall take part in the examination,
and for that purpose may be assisted by an advocate.
(3) The liquidator, where the official receiver is not the
liquidator, and any creditor or contributory may also take part  in
the examination either personally or represented by an advocate .
(4) The court may put such questions to the person referred to
in sub-article (1) as the court thinks fit.
(5) The person shall be examined on oath and shall answer all
such questions as the court may put or allow to be put to him.
(6) A person ordered to be examined under this article shall,
before his examination, be furnished with a copy of the officia l
receiver’s report and may, at his own cost be assisted by anadvocate, who shall be at liberty to put to him such questions as the
court may deem fit for enabling him to explain or qualify anyanswers given by him:
Provided that, if any such person applies to the court to be
discharged from any charges made or suggested against him, itshall be the duty of the official receiver to appear on the hea ring of
the application and call the attention of the court to any matt ers
which appear to the official receiver to be relevant, and if th e court,
after hearing any evidence given or witnesses called by the off icial
receiver, grants the application, the court may allow the appli cant
such costs as in its discretion it may think fit.
(7) Notes of the examination shall be taken down in writing,
and shall be read over to or by, and signed by, the person exam ined,
and may thereafter be used in evidence against him, and shall b e
open to the inspection of any creditor or contributory at all
 160        CAP. 386. ]                         COMP ANIES
reasonable times.
(8) The court may, if it thinks fit, adjourn the examination fro m
time to time.
(9) An examination under this article may, if the court so
directs, be held before a magistrate, and the powers of the cou rt
may, in any such case, be exercised by the magistrate before wh om
the examination is held.
Power to arrest 
absconding contributory.261.  The court, at any time before or after making a winding up
order, on proof of probable cause for believing that a contribu tory
is about to leave Malta or otherwise to abscond or to remove orconceal any of his property for the purpose of evading payment of
calls or of avoiding examination respecting the affairs of thecompany, may cause the contributory to be precluded from leavin g
Malta and his accounting records, documents and movable propert y
to be seized, and the court may further order the contributory’ s
detention and the safekeeping of his accounting records, docume nts
and movable property until such time as the court thinks fit.
Powers of court 
cumulative.262.  Any powers conferred by this Act on the court shall be in
addition to any powers exercisable by any person under this Act  of
instituting proceedings against any contributory or debtor of t he
company or the estate of any contributory or debtor for therecovery of any call or other sums.
Liquidator may 
exercise certain powers of court.263.  The powers conferred and the duties imposed on the court
by this Act in respect of the following matters - 
(a) the holding and conduct of meetings to ascertain the
wishes of creditors and contributories;
(b) the drawing up of lists of contributories and the
rectification of the register of members, if required,and the collection and application of assets;
(c) the payment, delivery, conveyance, surrender or
transfer of money, property, accounting records ordocuments to the liquidator;
(d) the making of calls;
(e) the fixing of a time within which debts and claims
must be proved;
may, subject to the provisions of this article or any other pro vision
of this Act, be exercised or performed by the liquidator, subje ct to
the control of the court:
Provided that the liquidator shall not, without the special
leave of the court, rectify the register of members and shall n ot
make any call without either the special leave of the court or the
sanction of the liquidation committee.
Striking of name of 
the company off the register.
Amended by: 
XXIV .1995.362.264. (1) When the affairs of the company have been
completely wound up and the requirements of article 244 have be en
complied with, the court shall make an order that the name of t he
company be struck off the register from the date of the order.
(2) A copy of the order shall within fourteen days from the date
                    COMP ANIES              [CAP. 386.       161
thereof be forwarded by the Registrar of Courts to the Registra r
who shall comply therewith.
SUB-TITLE II - VOLUNTARY WINDING UP 
Chapter I - General Provisions
Notice of 
resolution for dissolution and consequential voluntary winding up.
Amended by:
IV . 2003.103.265. (1) When a company has passed a resolution for
dissolution and consequential voluntary winding up, it shall, w ithin
fourteen days after the date of dissolution of the company, del iver a
notice of the resolution to the Registrar for registration.
(2) If default is made by the company in complying with this
article, every liquidator or officer of the company who is in d efault
shall be liable to a penalty, and, for every day during which t he
default continues, to a further penalty.
Date of dissolution 
in a voluntary winding up.
Amended by:
IV . 2003.104.266.  Where a company is dissolved in accordance with the
provisions of article 214(1)( b), the date of dissolution shall be the
date of the passing of the resolution for dissolution andconsequential voluntary winding up or such later date as may bespecified in the said resolution:
Provided that where the Court has ordered that the company
be wound up voluntarily by virtue of the provisions of article214(3), the company shall be deemed to have been dissolved at t he
time of the filing of the winding up application.
Effects of 
voluntary winding up.267. (1) In case of a voluntary winding up, the company shall,
from the date of dissolution, cease to carry on its business ex cept so
far as may be required for the beneficial winding up thereof.
(2) Any transfer of shares, not being a transfer made with the
sanction in writing of the liquidator, and any alteration in th e status
of the members of the company, made after, or so as to have eff ect
after, the date of dissolution, shall be void.
Declaration of 
solvency.
Amended by:
IV . 2003.105;L.N. 425 of 2007.268. (1) When it is proposed to dissolve and wind up a
company voluntarily, in accordance with article 214(1)( b), the
directors of the company, or in the case of a company having mo re
than two directors, the majority of the directors, may, at a me eting
of the directors make a declaration to the effect that they hav e made
a full inquiry into the affairs of the company, and that, havin g so
done, they have formed the opinion that the company will be abl e
to pay its debts in full within such period not exceeding twelv e
months from the date of dissolution as may be specified in the
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declaration.
(2) A declaration made in accordance with sub-article (1) shall
have no effect for the purposes of this Act unless - 
(a) it is made within the month immediately preceding the
date of the passing of the resolution for dissolution andconsequential voluntary winding up of the companyand is delivered to the Registrar for registrationtogether with the notice of the said resolution pursuantto article 265(1); and
(b) it contains a statement of the company’s assets and
liabilities made up to a date not earlier than the date ofthe declaration by more than three months.
(3) When the court has ordered that the company be wound up
voluntarily by virtue of the provisions of article 214(3), the court
shall, before making the winding up order require the directors  of
the company to make the declaration referred to in sub-article (1)
within such time as it may establish and the provisions of sub-article (1) and of sub-article (2)( b) shall apply accordingly.
(4) Any director of a company making a declaration under this
article without having reasonable grounds for the opinion that the
company will be able to pay its debts in full within the periodspecified in the declaration, shall be guilty of an offence and  liable
on conviction to a fine ( multa ) of not more than forty-six thousand
and five hundred and eighty-seven euro and forty-seven cents(46,587.47) or to imprisonment for a term not exceeding threeyears or to both such fine and imprisonment; and if the debts o f the
company are not paid or provided for in full within the periodstated in the declaration, it shall be presumed, until the cont rary is
shown that the director did not have reasonable grounds for thi s
opinion.
(5) A winding up in relation to which a declaration has been
made and delivered in accordance with this article is in this A ct
referred to as "a members’ voluntary winding up", and a windingup in relation to which a declaration has not been made anddelivered as aforesaid is in this Act referred to as "a credito rs’
voluntary winding up".
Chapter II - Provisions applicable to a members’ voluntary 
winding up
Provisions 
applicable to a member’s voluntary winding up.269.  The provisions contained in articles 270 to 275 shall,
subject to the provisions of article 276, apply in relation to a
members’ voluntary winding up.
Appointment, 
remuneration and removal of liquidators.
Amended by:
IV . 2003.106.270. (1) The company shall by extraordinary resolution
appoint a liquidator for the purpose of winding up the affairs and
distributing the assets of the company, and may fix theremuneration to be paid to him.
(2) Except where a company has appointed a liquidator at the
                    COMP ANIES              [CAP. 386.       163
meeting at which the extraordinary resolution referred to in ar ticle
214(1)( b) has been passed, the directors shall call a general meeting
of the company, to be held within thirty days after the date of  the
dissolution, for the purposes of sub-article (1).
(3) If for any cause whatsoever, a liquidator is not appointed b y
the general meeting, any director shall apply to the court for the
appointment of a liquidator and the appointment shall be made b y
the court; the application to the court for the appointment of a
liquidator under this sub-article shall be made within fourteen  days
from the date for which the general meeting referred to in sub-article (2) was summoned.
(4) If default is made by the directors in complying with the
provisions of sub-articles (2) and (3), every director who is i n
default shall be liable to a penalty, and, for every day during  which
the default continues, to a further penalty.
(5) Notwithstanding the preceding sub-articles of this article,
where the court has ordered that the company be wound upvoluntarily by virtue of the provisions of article 214(3), and a
declaration has been made in accordance with article 268, the c ourt
shall in the winding up order, at its sole discretion, either a ppoint a
liquidator for the purpose of winding up the affairs and distri buting
the assets of the company and shall fix the remuneration to be paid
to him; or give the necessary directives for the holding of a g eneral
meeting for the purpose of appointing a liquidator and for thefixing of the remuneration to be paid to him.
(6) A liquidator appointed in accordance with the provisions of
this article may be removed by extraordinary resolution of thecompany; except where he has been appointed by the court in ter ms
of this article.
Vacancy in office 
of liquidator.
Amended by:
IV . 2003.107.271. (1) If a vacancy occurs by death, resignation or removal
in the office of liquidator appointed by the company, the compa ny
shall by extraordinary resolution fill the vacancy.
(2) For the purposes of sub-article (1), a general meeting shall
be convened by any member, contributory or, if there were morethan one liquidator, by the continuing liquidator or liquidator s and
notice of the meeting shall be given within fourteen days of th e
occurrence of the vacancy referred to in sub-article (1).
(3) The general meeting shall be held in the manner provided
by this Act or by the memorandum and articles, or in such manne r
as may, on the application of any member, contributory or by th e
continuing liquidator, be determined by the court.
(4) If for any cause whatsoever a liquidator is not appointed in
the manner specified by sub-article (1), or if a vacancy occurs  in
the office of a liquidator appointed by the Court, any member,contributory or the continuing liquidator or liquidators may, a t any
time thereafter, apply to the court for the appointment of aliquidator, and the appointment shall be made by the court.
 164        CAP. 386. ]                         COMP ANIES
Duty of liquidator 
in case of insolvency.272. (1) If the liquidator is, at any time after a declaration is
made in accordance with article 268, of opinion that the compan y
will not be able to pay its debts within the period stated in t he said
declaration, he shall forthwith summon a meeting of the credito rs,
and shall lay before the meeting a statement of the assets andliabilities of the company and the provisions of article 276 sh all
apply.
(2) If the liquidator fails to comply with the provisions of thi s
article, he shall be liable to a penalty.
Liquidator to hold 
general meeting where winding up continues for more than twelve months.273. (1) Subject to the provisions of article 276, in the event
of the winding up continuing for more than twelve months, theliquidator shall summon a general meeting of the company at theend of the first period of twelve months from the commencement of
the winding up, and of each succeeding period of twelve months,  or
at the first convenient date within three months from the end o f the
period of twelve months, or within a longer term as the Registr ar
may allow, and shall lay before the meeting an account of his a cts
and dealings and of the conduct of the winding up during thepreceding twelve months, including a summary of receipts andexpenditure.
(2) If the liquidator fails to comply with the provisions of sub -
article (1) he shall be liable to a penalty.
(3) A member or members holding not less than one-tenth of
the paid up share capital having the right to vote at generalmeetings of the company may at any time, by request in writingrequire the liquidator to convene a general meeting of the comp any.
Such request shall be signed by such member or members and shal l
state the objects of the meeting.
Final meeting.
Amended by:
IV . 2003.108;IX. 2008.31.274. (1) Subject to the provisions of article 276, as soon as the
affairs of the company are fully wound up, the liquidator shallmake an account of the winding up, showing how the winding uphas been conducted and how the property of the company has beendisposed of and shall draw up a scheme of distribution indicati ng
the amount due in respect of each share from the assets of thecompany, where applicable, and he shall cause the account to beaudited by one or more auditors appointed by ordinary resolutio n of
the company, or in default by the court. The liquidator shallthereupon call a general meeting of the company for the purpose  of
laying before it the account and scheme of distribution, if any ,
together with the auditors’ report, and giving any explanationthereof.
(2) Within seven days after the meeting, the liquidator shall
send to the Registrar a copy of the account and of the scheme o f
distribution, if any, together with the auditors’ report, and s hall
make a return to him of the holding of the meeting and of its d ate,
and if the copy is not sent or the return is not made in accord ance
with this sub-article the liquidator shall be liable to a penal ty, and,
for every day during which the default continues, to a furtherpenalty:
Provided that, if a quorum is not present at the meeting, the
                    COMP ANIES              [CAP. 386.       165
liquidator shall, in lieu of the return mentioned in this sub-a rticle,
make a return that the meeting was duly summoned and that noquorum was present thereat, and upon such a return being made t he
provisions of this sub-article as to the making of the return s hall be
deemed to have been complied with.
(3) If the liquidator fails to call a general meeting of the
company as required by this article, he shall be liable to a pe nalty. 
(4) The provisions of article 153 shall apply to an auditor
appointed in terms of sub-article (1). Such auditor shall not b e a
person who has held the office of auditor of the company at anytime during the last three years immediately preceding the date  of
dissolution.
Striking company’s 
name off the register.
Amended by:
XXIV . 1995.362.275. (1) The Registrar, on receiving the account and the
scheme of distribution, if any, together with the auditors’ rep ort and
either of the returns mentioned in article 274(2), shall forthw ith
register them, and on the expiration of three months from thepublication of the notice referred to in article 401(1)( e), the
Registrar shall strike the name of the company off the register :
Provided that the court may, on the application filed within
the said period of three months by the liquidator or by any oth er
person who appears to the court to have an interest, make an or der
deferring the date at which the name of the company shall be st ruck
off the register for such time  and subject to such conditions a s the
court may provide.
(2) When an order by the court is made under the proviso to
sub-article (1), the Registrar of Courts shall forthwith forwar d a
copy of it to the Registrar for registration and the Registrar shall
defer applying the provisions of sub-article (1) in accordance with
the order given by the court referred to in that sub-article.
Alternative 
provisions in case of insolvency.276.  Where the provisions of article 272 have effect, articles
283 to 285 shall apply to the winding up in lieu of articles 27 3 to
275, as if the winding up were a creditors’ voluntary winding u p
and not a members’ voluntary winding up.
Chapter III - Provisions applicable to a creditors’ voluntary 
winding up
Provisions 
applicable to creditors’ voluntary winding up.277.  The provisions of articles 278 to 285 shall apply in
relation to a creditors’ voluntary winding up.
Meeting of 
creditors.278. (1) The directors of the company shall cause a meeting of
the creditors of the company to be summoned for a day not laterthan the fourteenth day from the day of the general meeting of the
company at which the resolution for dissolution and consequenti al
voluntary winding up is passed, and shall cause the notice of t he
said meeting of the creditors to be sent by post to the credito rs at
least seven days before the date of that meeting.
 166        CAP. 386. ]                         COMP ANIES
(2) The directors of the company shall -
(a) cause a full statement of the position of the company’s
affairs, together with a list of the creditors of thecompany and the estimated amount of their claims tobe laid before the meeting of the creditors to be held asaforesaid; and
(b) appoint one of their number to preside at the said
meeting.
(3) It shall be the duty of the director appointed to preside at
the meeting of creditors to attend the meeting and preside ther eat. 
(4) Where the court has ordered that the company be wound up
voluntarily by virtue of the provisions of article 214(3) and adeclaration in accordance with article 268 has not been made, t he
court shall, at its sole discretion, determine whether or not t o
appoint a liquidator itself in the winding up order. Where noliquidator is so appointed the general meeting of the company a nd
the meeting of the creditors referred to in this article, shall  be
summoned within fourteen days from the date of the winding uporder, and notice thereof shall be given by the directors of th e
company at least seven days before the date of such meetings; a nd
the provisions of sub-articles (2) and (3) shall apply.
(5) The directors of the company shall cause the notice of the
meeting of the creditors referred to in this article to be adve rtised
once in at least one local daily newspaper.
(6) If default is made by the directors, or the director, as the
case may be, in complying with any of the provisions of this ar ticle,
every director who is in default shall be liable to a penalty.
Appointment and 
removal of liquidator.
Amended by:
IV . 2003.109.279. (1) The creditors and the company at their respective
meetings mentioned in article 278 may nominate a person to beliquidator for the purpose of winding up the affairs and distri buting
the assets of the company. The nomination of a person as liquid ator
by the creditors shall be made by a resolution of the creditors , and
the nomination by the company shall be made by an extraordinaryresolution of the company. If the creditors and the companynominate different persons, the person nominated by the credito rs
shall be liquidator, and if no person is nominated by the credi tors
the person, if any, nominated by the company shall be liquidato r.
(2) Where no person is nominated to act as liquidator by either
the creditors or the company, an application to the court for t he
appointment of a liquidator shall be made by any director of th e
company within fourteen days from the date for which the meetin g
of the creditors referred to in article 278 was summoned, and t he
appointment shall be made by the court.
(3) If default is made by the directors in complying with the
provisions of sub-article (2), every director who is in default  shall
be liable to a penalty, and, for every day during which the def ault
continues, to a further penalty.
(4) A liquidator appointed in accordance with the provisions of
this article may be removed by a resolution of the creditors ex cept
                    COMP ANIES              [CAP. 386.       167
where he has been appointed by the court in terms of article 27 8 or
of this article.
(5) In this article, a resolution of the creditors shall have th e
meaning assigned to it under article 298.
Liquidation 
committee.
Amended by:
IV . 2003.110.280. (1) The creditors at the meeting to be held in pursuance
of article 278, or at any subse quent meeting may, if they think  fit,
by resolution appoint not more than five representatives of thecreditors to a liquidation committee, and if such committee isappointed, the contributories may by resolution appoint up to f ive
persons to act as their representatives on the committee:
Provided that the creditors may, if they think fit, resolve
that all or any of the persons so appointed by the company ough t
not to be members of the liquidation committee, and, if thecreditors so resolve, the persons mentioned in the resolution s hall
not, unless the court otherwise directs, be qualified to act asmembers of the committee, and on any application to the courtunder the provisions of this sub-article the court may, if it t hinks
fit, appoint other persons to act as such members in place of t he
persons mentioned in the resolution.
(2) Subject to the provisions of sub-article (1) or as may be
otherwise prescribed, the provisions of article 246, other than  sub-
articles (1) to (4) thereof, shall apply with respect to a liqu idation
committee appointed under this article as they apply with respe ct to
a liquidation committee appointed in a winding up by the court.
Remuneration of 
liquidator.281.  The liquidation committee or, if there is no such
committee, the creditors, shall fix the basis of remuneration t o be
paid to the liquidator or liquidators.
Vacancy in office 
of liquidator.
Amended by:
IV . 2003.111.282.  If a vacancy occurs, by death, resignation or removal in
the office of a liquidator who was not appointed by the Court, a
new liquidator shall be appointed in accordance with the provis ions
of article 279(1):
Provided that if a liquidator is not appointed in accordance
with the provisions of the said sub-article, any member or cred itor
of the company may apply to the court for the appointment of aliquidator and the appointment shall be made by the court.
Liquidator to hold 
meeting of company and creditors where winding up continues for more than twelve months.
Amended by:
IV . 2003.112.283. (1) In the event of the winding up continuing for more
than twelve months, the liquidator shall summon a general meeti ng
of the company and a meeting of the creditors at the end of the  first
period of twelve months from the commencement of the windingup, and of each succeeding period of twelve months, or at the f irst
convenient date within three mont hs from the end of the period of
twelve months, or within a longer term as the Registrar may all ow,
and shall lay before the meetings an account of his acts anddealings and of the conduct of the winding up during the preced ing
twelve months, including a summary of receipts and expenditure.
(2) If the liquidator fails to comply with the provisions of sub -
article (1), he shall be liable to a penalty.
(3) A member or members holding not less than one tenth of
 168        CAP. 386. ]                         COMP ANIES
the paid up share capital having the right to vote at general
meetings of the company or a creditor or creditors representing  not
less than one tenth in value of the company creditors may, at a ny
time, by request in writing require the liquidator to convene ageneral meeting of the company, or a creditors’ meeting, as the  case
may be. Such request shall be signed by such member or members,or such creditor or creditors, as the case may be, and shall st ate the
objects of the meeting.
Final meetings. 284. (1) As soon as the affairs of the company are fully wound
up, the liquidator shall make an account of the winding up, sho wing
how the winding up has been conducted and how the property ofthe company has been disposed of, and shall draw up a scheme ofdistribution indicating the amount due in respect of each share  from
the assets of the company, where applicable, and he shall cause  the
account to be audited by one or more auditors appointed byresolution of the creditors, or in default by the court. The li quidator
shall thereupon call a general meeting of the company and ameeting of the creditors for the purpose of laying the account and
scheme of distribution, if any, together with the auditors’ rep ort,
before the meetings and giving any explanations thereof.
(2) Within seven days after the date of the meetings or, if the
meetings are not held on the same date, after the date of the l ater
meeting, the liquidator shall send to the Registrar a copy of t he
account and of the scheme of distribution, if any, together wit h the
auditors’ report, and shall make a return to him of the holding  of
the meetings and of their dates; and if the copy is not sent or  the
return is not made in accordance with this sub-article the liqu idator
shall be liable to a penalty, and, for every day during which t he
default continues, to a further penalty:
Provided that, if a quorum is not present at either such
meeting, the liquidator shall, in lieu of the return mentioned in this
sub-article, make a return that the meeting was duly summoned a nd
that no quorum was present thereat and upon such a return beingmade the provisions of this sub-article as to the making of thereturn shall, in respect of that meeting, be deemed to have bee n
complied with.
(3) If the liquidator fails to call a general meeting of the
company or a meeting of the creditors as required by this artic le, he
shall be liable to a penalty.
(4) The provisions of article 274(4) shall apply to an auditor
appointed in terms of sub-article (1). 
Striking company’s 
name off the register.
Amended by: 
XXIV .1995.362.285. (1) The Registrar shall, on receiving the account and the
scheme of distribution, if any, together with the auditors’ rep ort
and, in respect of each such meeting as is referred to in artic le 284,
the return or returns as mentioned in that article, forthwith r egister
them, and on the expiration of three months from the publicatio n of
the notice referred to in article 401(1)( e), the Registrar shall strike
the name of the company off the register:
Provided that the court may, on an application filed within
the said period of three months by the liquidator or by any oth er
                    COMP ANIES              [CAP. 386.       169
person who appears to the court to have an interest, make an or der
deferring the date at which the name of the company shall be st ruck
off the register for such time  and subject to such conditions a s the
court may provide.
(2) When an order by the court is made under the proviso to
sub-article (1), the Registrar of Courts shall forthwith forwar d a
copy of it to the Registrar for registration and the Registrar shall
defer applying the provisions of sub-article (1) in accordance with
the order given by the court referred to in that sub-article.
Chapter IV - Provisions applicable to every voluntary 
winding up
Provisions 
applicable to every voluntary winding up.286.  The provisions contained in articles 287 to 294 shall apply
to every voluntary winding up, whether a members’ or a creditor s’
voluntary winding up.
Distribution of 
property of company.287.  Subject to the provisions of this Act and of any other law
as to preferential debts or payments, the property of a companyshall, on its winding up, be applied in satisfaction of its lia bilities
pari passu , and, subject to such application, shall, unless the
articles otherwise provide, be distributed among the membersaccording to their rights and interests in the company.
Powers and duties 
of liquidator.288. (1) The liquidator may - 
(a) in the case of a members’ voluntary winding up, with
the sanction of an extraordinary resolution of thecompany, and, in the case of a creditors’ voluntarywinding up, with the sanction of the court or of theliquidation committee or, if there is no suchcommittee, of a meeting of the creditors, exercise anyof the powers given by article 238(1)( c), (d) and ( e) to
a liquidator in a winding up by the court;
(b) without sanction, exercise any of the other powers
given by this Act to a liquidator in a winding up by the
court;
(c) exercise the power of the court under this Act of
drawing up a list of contributories, which list shall beprima facie  evidence of the liability of the persons
named therein to be contributories;
(d) exercise the power of the court of making calls;
(e) summon general meetings of the company for the
purpose of obtaining the sanction of the company byextraordinary resolution or for any other purpose hemay think fit.
(2) The liquidator shall pay the debts of the company and shall
adjust the rights of the contributories among themselves.
(3) More than one person may be appointed to exercise the
 170        CAP. 386. ]                         COMP ANIES
function of liquidator of a company. Where more than one
liquidator is appointed, any power given by this Act may beexercised by one or more of them as may be determined at the ti me
of their appointment, or in default of such determination, by a ny
two of them acting jointly.
(4) Subject to the provisions of article 305, the acts of a
liquidator shall be valid notwithstanding any defects that mayafterwards be discovered in his appointment.
Powers of the court 
to remove liquidators.
Amended by:
IV . 2003.113.289.  (1) The court may, on the application of any member,
creditor or contributory, remove a liquidator if it is satisfie d that
there exist sufficient grounds to warrant his removal and appoi nt
another liquidator.
(2) A vacancy resulting from the death or resignation of a
liquidator appointed by the Court may, on the application of an y
member, creditor or contributory, be filled by the Court.
(3) The person who applied to the Court in terms of sub-article
(2) shall, in the case of a vacancy resulting from the death of  a
liquidator, inform the Registrar of the demise of the liquidato r.
Notice by 
liquidator of his appointment.
Amended by:
IV . 2003.114.290. (1) The liquidator shall, within fourteen days after his
appointment, deliver to the Registrar for registration a notice  of his
appointment stating his name and residence.
(2) If the liquidator fails to comply with the requirements of
this article he shall be liable to a penalty, and, for every da y during
which the default continues, to a further penalty.
When arrangement 
is binding on members.291. (1) Any arrangement entered into between a company in
the course of being wound up, and its creditors shall, subject to the
right of appeal under this article, be binding on the company i f
sanctioned by an extraordinary resolution, and on the creditors  if
acceded to by two-thirds in value.
(2) Any creditor or contributory may, within fourteen days
from the completion of the arrangement, apply to the courtcontesting the arrangement, and the court may thereupon, as itthinks fit, amend, vary or confirm the arrangement.
Court may 
determine questions and exercise powers.
Amended by: 
XXIV .1995.362;IV . 2003.115.292. (1) The liquidator or any member, contributory or
creditor may apply to the court to determine any question arisi ng in
the course of winding up of a com pany, or to exercise, as respe cts
the enforcement of calls or any other matter, all or any of thepowers which the court might exercise if the company were beingwound up by the court.
(2) The liquidator may apply to the Court to fix a time or times
within which creditors are to prove their debts or claims or to  be
excluded from the benefit of any distribution made before thosedebts are proved.
(3) The court, if satisfied that the determination of the questi on
or the required exercise of power referred to in sub-articles ( 1) and
(2) will be just and beneficial, may accede wholly or partially  to the
application on such terms and conditions as it thinks fit or ma y
                    COMP ANIES              [CAP. 386.       171
make such other order on the application as it so determines.
(4) A copy of any order made by virtue of this article staying
the proceedings in the winding up shall forthwith be forwarded by
the Registrar of Courts to the Registrar who shall make a minut e of
the order in the register relating to the company.
Costs of voluntary 
winding up.293.  All costs, charges and expenses properly incurred in the
winding up, including the remuneration of the liquidator, shall  be
payable out of the assets of the company in priority to all oth er
claims, and they shall, in so far as applicable, be paid in the  order
of priority established under article 258, unless the court oth erwise
directs.
Savings for rights 
of creditors and contributories.294.  The voluntary winding up of a company shall not bar the
right of any creditor or contributory to have it wound up by th e
court, but in the case of an application by a contributory the court
must be satisfied that the rights of the contributories will beprejudiced by a voluntary winding up, and the provisions of art icle
223(2) shall apply.
SUB-TITLE III - PROVISIONS APPLICABLE TO EVERY 
MODE OF WINDING UP
Chapter I - Effect of appointment of liquidator and convening 
of meetings
Powers of directors 
and company secretary to cease.295.  On the appointment of a liquidator, all the powers of the
directors and of the company secretary shall cease, except as m ay
be otherwise provided in this Title. 
Summoning of 
meetings.296. (1) The liquidator, including the official receiver while
occupying the office of liquidator, shall summon all meetings o f
creditors or contributories by giving not less than fourteen da ys’
notice thereof in a daily newspaper circulating wholly or mainl y in
Malta; and shall, not less than fourteen days before the dayappointed for the meeting, send by post to every person appeari ng
in the company’s accounting records to be a creditor of thecompany, notice of the meeting of creditors, and, to every pers on
appearing in the company’s accounting records or otherwise to b e a
contributory of the company, notice of the meeting ofcontributories.
(2) The notice to each creditor shall be sent to the address
given in the creditors’ proof of his debt, or, if he has not pr oved his
debt, to the address given in the statement of affairs of thecompany, if any, or to such other address as may be known to th e
person summoning the meeting.
(3) Where there is no continuing liquidator, any member,
creditor or contributory may apply to the court for directions as to
the summoning and holding of a meeting.
(4) The provisions of this article shall not apply to meetings
held under article 278 or article 284.
 172        CAP. 386. ]                         COMP ANIES
Proof of notice and 
chairman of meeting.297. (1) A certificate by the official receiver, or an affidavit by
the liquidator or creditor, or as the case may be by some offic er of
the company, that the notice of any meeting has been duly poste d,
shall be sufficient evidence of such notice having been duly se nt to
the person to whom the same was addressed.
(2) The involuntary omission of any notice required to be given
by article 296 or any other provision of this Title shall notinvalidate the meeting.
(3) Where a meeting is summoned by the official receiver or
the liquidator, he or someone nominated by him shall be chairma n
of the meeting.
Resolutions of 
creditors and contributories.
Amended by:
IV . 2003.116.298. (1) ( a) At a meeting of creditors a resolution shall be
deemed to be passed when a majority in value of thecreditors present personally or by proxy and voting onthe resolution have voted in favour of the resolution.
(b) At a meeting of contributories a resolution shall be
deemed to be passed when three-fourths in value of thecontributories present in person or by proxy and votingon the resolution, or a majority in value of all thecontributories, have voted in favour of the resolution.
The value of the contributories shall be determined
according to the number of votes conferred on eachcontributory by the memorandum or articles of thecompany or, if the memorandum and articles are silent,according to the value of their respective liabilities tocontribute.
(2) The provisions of this Act and of the memorandum or
articles of the company with respect to proxies at general meet ings
of the company shall apply to proxies at meetings of creditors and
contributories, with such modifications and adaptations as may be
required.
(3) A copy of every resolution of a meeting of creditors or
contributories in a winding up by the court shall be certified by the
official receiver or the liquidator, as the case may be, and fi led in
the Registry of the Superior Courts.
(4) Where a resolution is passed at an adjourned meeting of any
creditors or contributories of a company, the resolution shall,  for all
purposes, be treated as having been passed on the date on which  it
was in fact passed, and shall not be deemed to have been passed  at
any earlier date.
Other proceedings 
at meetings.299. (1) A meeting of creditors or contributories may act
provided there is a quorum present consisting of:
(a) in the case of a creditors’ meeting, at least three
creditors or all the creditors where these number lessthan three; and
(b) in the case of a meeting of contributories, at least three
contributories, or all the contributories where thesenumber less than three.
                    COMP ANIES              [CAP. 386.       173
(2) If within half an hour from the time appointed for the
meeting, a quorum of creditors or contributories, as the case m ay
be, is not present or represented, the meeting shall be adjourn ed to
the same day in the following week at the same time and place o r to
such other day or time or place as the chairman may appoint, bu t so
that the day appointed shall be not less than seven and not mor e
than twenty-one days from the day from which the meeting wasadjourned, and at such adjourned meeting the number present orrepresented shall form a quorum and may act for any purpose.
(3) The chairman may, with the consent of the meeting, adjourn
it from time to time and from place to place, but the adjournedmeeting shall be held at the same place as the original meetingunless in the resolution for adjo urnment another place is speci fied
or unless the court otherwise orders.
(4) The chairman shall cause minutes of the proceedings of
meetings to be drawn up and properly entered in a book kept forthat purpose and the minutes shall be signed by him.
(5) A list of creditors and contributories present at every
meeting shall be made and kept in such form as the chairman maydeem appropriate or as may be prescribed.
Notice of 
resignation or removal of liquidator.
Amended by: 
XXIV .1995.362.300. (1) Upon the resignation of a liquidator from his office,
he shall deliver to the Registrar for registration a notice of his
resignation and the resignation shall only become effective on such
registration.
(2) Where a liquidator is removed from office by the court in
accordance with the provisions of this Title, the Registrar of Courts
shall forthwith deliver a notice of such removal to the Registr ar for
registration.
(3) Where a liquidator has been removed by an extraordinary
resolution of the company in a members’ voluntary winding up, anotice thereof shall be delivered to the Registrar for registra tion by
any member of the company who has duly been authorised by thesame resolution or by the company in general meeting.
(4) Where a liquidator has been removed by a resolution of the
creditors in terms of article 298, in a creditors’ voluntary wi nding
up, a notice thereof shall be delivered to the Registrar forregistration by any creditor of the company who has been dulyauthorised by the same resolution or by the creditors’ meeting.
Rectification of 
scheme of distribution.
Added by:
IV . 2003.117.300A.  (1) Where in the course of the winding up of a company
the liquidator has not taken into account any asset of the comp any,
and the name of the company has been struck off the register, a ny
interested person may, by an application, request the Court to order
the rectification of the scheme of distribution, and the Court may,
where it considers it appropriate, order such rectification und er
those terms and conditions it may deem fit.
(2) Where a company has made a distribution to its
shareholders pursuant to a scheme of distribution and the name of
such company has been struck off the register, any creditor who se
claim against the company has not been satisfied may, by an
 174        CAP. 386. ]                         COMP ANIES
application, claim what is due t o him from the shareholders of the
company pro rata  to the amount received by the shareholders upon
the distribution, and the Court may, where it considers itappropriate, order that payments be made by the shareholders tosuch creditor under those terms and conditions it may deem fit:
Provided that in no case shall a shareholder be required to
contribute an amount exceeding that received by him upondistribution.
(3) No application may be made under this article after the
expiration of five years from the date on which the name of thecompany has been struck off the register.
Restoration of 
company name on register.
Added by:
IV . 2003.117.300B.  (1) Where a company has been struck off the register, any
interested person may, by an application, request the Court to order
that the name of the company be restored to the register and th e
winding up be reopened.
(2) Where, on an application made in terms of sub-article (1),
the Court is satisfied that the winding up and striking off of the
company has been vitiated by fraud or illegality of a materialnature, the Court may order that the name of the company berestored to the register and the winding up be reopened for suc h
purposes and such period as the Court shall specify in its deci sion,
and the Court shall give such directives and impose such condit ions
as it may consider appropriate.
(3) The Court shall only accede to the application where it is
satisfied that this is the only remedy available.
(4) In its decision the Court shall also determine whether its
orders and directives shall be effective in favour of all perso ns or
shall apply limitedly to specified persons indicated in the dec ision.
(5) No application may be made under this article after the
expiration of five years from the date on which the name of thecompany has been struck off the register.
Chapter II - Proof and ranking of claims
Debts of all 
descriptions may be proved.301.  In every winding up of a company the assets of which are
sufficient to meet the liabilities, all debts payable on a cont ingency,
and all claims against the company, present or future, certain or
contingent, ascertained or which may be due in damages, shall b e
admissible as proof against the company, a just estimate beingmade, so far as possible, of the value of such debts or claims as
may be subject to any contingency or which are due in damages b ut
not ascertained, or which for some other reason do not bear acertain value.
Application of 
rules on ranking.302.  In the winding up of a company the assets of which are
insufficient to meet the liabilities, the rights of secured andunsecured creditors and the priority and ranking of their debts  shall
be regulated by the law for the time being in force.
                    COMP ANIES              [CAP. 386.       175
Chapter III - Effects of winding up on antecedent transactions 
Fraudulent 
preference.Substituted by:IV . 2003.118.303.  (1) Every privilege, hypothec or other charge, or transfer
or other disposal of property or rights, and any payment, execu tion
or other act relating to property or rights made or done by oragainst a company, and any obligation incurred by the companywithin six months before the dissolution of the company shall b e
deemed to be a fraudulent preference against its creditors whet her
it is of a gratuitous nature or an onerous nature if it constit utes a
transaction at an undervalue or if a preference is given, unles s the
person in whose favour it is made, done or incurred, proves tha t he
did not know and did not have reason to believe that the compan y
was likely to be dissolved by reason of insolvency, and in the event
of the company being so dissolved every such fraudulentpreference shall be void.
(2) For the purposes of this article -
(a) a company enters into a transaction at an undervalue
if:
(i) the company makes a gift or otherwise enters
into a transaction on terms that provide for thecompany to receive no consideration, or
(ii) the company enters into a transaction for a
consideration the value of which, in money ormoney’s worth, is significantly less than thevalue in money or money’s worth of theconsideration provided by the company;
(b) a company gives a preference to a person if:
(i) that person is one of the company’s creditors or
a surety or guarantor for any of the company’sdebts or other liabilities; and
(ii) the company does anything or suffers anything
to be done which, in either case, has the effect ofputting that person into a position which, in theevent of the company going into insolventwinding up, will be better than the position hewould have been had that act or omission notoccurred.
Liabilities and 
rights with respect to fraudulent preferences.304. (1) Where anything made or done after the appointed day
is void under article 303 as a fraudulent preference of a perso n
interested in property privileged, hypothecated or otherwisecharged to secure the company’s debt, then, without prejudice t o
any rights or liabilities arising apart from the provisions of this
article, the person preferred shall be subject to the same liab ilities
and shall have the same rights as if he had undertaken to bepersonally liable as surety for the debt to the extent of the c harge
on the property or the value of his interest, whichever is the less.
(2) The value of the preferred person’s interest shall be
determined as at the date of the transaction constituting thefraudulent preference, and shall be determined as if the intere st
 176        CAP. 386. ]                         COMP ANIES
were free of all encumbrances or burdens other than those to wh ich
the charge for the company’s debt referred to in sub-article (1 ) was
then subject.
(3) On any application made to the court with respect to any
payment on the ground that the payment was a fraudulentpreference of a surety or guarantor, the court may determine an y
questions with respect to the payment arising between the perso n to
whom the payment was made and the surety or guarantor and togrant relief in respect thereto.
(4) The provisions of sub-article (3) shall apply, with the
necessary modifications, in relation to transactions other thanpayments of money, as they apply in relation to such payments.
Chapter IV - Qualification of Liquidators and Prohibition of 
Certain Transfers by Liquidators
Qualification of 
liquidators.
Amended by:
IV . 2003.119.305. (1) A person shall not be qualified to act as liquidator
unless he is an advocate or is an individual who is a certified  public
accountant or certified public accountant and auditor, or isregistered with the Registrar as fit and proper to exercise thefunction of liquidator.
(2) A person who is qualified to act as liquidator in virtue of
sub-article (1), may not act as liquidator if he has held the o ffice of
director or company secretary or has held any other appointmentwith or in connection with that company, at any time during thefour years prior to the date of dissolution of the company asdetermined in accordance with the provisions of this Act.
For the purposes of this sub-article, director includes a
person in accordance with whose directions or instructions thedirectors of the company are or have been accustomed to act.
Prohibition of 
certain transfers by liquidators.
Amended by:
L.N. 425 of 2007.306. (1) A liquidator shall be prohibited from transferring or
disposing of any assets of a company, directly or indirectly, i n
favour of - 
(a) the liquidator himself, his partners or employees, or to
the spouse of the liquidator, or to any other personrelated to him by consanguinity or affinity in the directline, or, up to the third degree, in the collateral line; or
(b) a commercial partnership, other than a company, of
which he is a partner; or
(c) a company of which he is a director, or of which he
holds more than half in nominal value of its issuedshare capital, or in which he is entitled to more thanhalf its voting power, or to a subsidiary or parentcompany thereof.
(2) A person who acts in contravention of any of the provisions
of sub-article (1) or of article 305 shall be guilty of an offe nce and
liable on conviction to a fine ( multa ) of not more than eleven
thousand and six hundred and forty-six euro and eighty-seven ce nts
(11,646.87).
                    COMP ANIES              [CAP. 386.       177
Chapter V - Offences antecedent to dissolution or in course of 
winding up
Fraud in 
anticipation of dissolution.
Amended by:
L.N. 425 of 2007.307. (1) When a company has been dissolved in accordance
with the provisions of article 214, any person, being a past orpresent officer of the company, shall be guilty of an offence i f,
within the twelve months immediately preceding the deemed dateof dissolution, he has -
(a) concealed any part of the company’s property, or
concealed any debt due to or from the company; or
(b) fraudulently removed any part of the company’s
property; or
(c) concealed, destroyed, mutilated or falsified any book
or paper affecting or relating to the company’sproperty or affairs; or
(d) made any false entry in any book or paper affecting or
relating to the company’s property or affairs; or
(e) fraudulently parted with, or altered any document
affecting or relating to the company’s property oraffairs; or
(f) pledged or disposed of any property of the company
which has been obtained on credit and has not beenpaid for, unless the pledging or disposal was in theordinary course of the company’s business; or
(g) by any false representation or other fraud, obtained
property for or on behalf of the company on creditwhich the company does not subsequently pay for; or
(h) exercised any false representation or fraud for the
purpose of obtaining the consent of the creditors of thecompany or of any of them to an agreement withreference to the affairs of the company or to itsdissolution.
(2) Such person shall be guilty of an offence if within the
period mentioned in sub-article (1) he has been a party to the doing
by others of any of the things mentioned in paragraphs ( c), (d) and
(e) thereof, and he shall be guilty of an offence if, at any time  after
the deemed date of dissolution, he does any of the things menti oned
in paragraphs ( a) to (h) of the said sub-article, or is party to the
doing by others of any of the things mentioned in paragraphs ( c) to
(e) of that sub-article.
(3) It shall be a defence for a person charged to prove that he
had no intent to defraud or to conceal the affairs of the compa ny or
to defeat the law.
(4) Where a person pledges or otherwise disposes of any
property in circumstances which amount to an offence under sub-article (1)( f), every person who receives the property on pledge or
otherwise receives the property knowing it to be pledged ordisposed of in such circumstances, shall be guilty of an offenc e.
 178        CAP. 386. ]                         COMP ANIES
(5) For the purposes of this article, the expression "officer"
shall include any person in accordance with whose directions orinstructions the directors of a company have been accustomed toact.
(6) A person guilty of an offence under this article shall be
liable on conviction to a fine ( multa ) of not more than two hundred
and thirty-two thousand and nine hundred and thirty-seven euroand thirty-four cents (232,937.34) or to imprisonment for a ter m
not exceeding five years or to both such fine and imprisonment.
Fraud by officers 
of companies being wound up.
Amended by:
L.N. 425 of 2007.308. (1) When a company is being wound up by the court or
voluntarily, a person shall be guilty of an offence if, being a n
officer of the company, he - 
(a) has made or caused to be made any gift or transfer of,
or charge on, or has caused or connived at theenforcement of any executive title against, theproperty of the company; or
(b) has concealed or removed any part of the property of
the company since, or within two months before, thedate of any unsatisfied judgment or order for paymentof money against the company.
(2) A person shall not be guilty of an offence under sub-article
(1) if he proves that, at the time of the conduct constituting the
offence, he had no intent to defraud the company’s creditors.
(3) A person guilty of an offence under this article shall be
liable on conviction to a fine ( multa ) of not more than two hundred
and thirty-two thousand and nine hundred and thirty-seven euroand thirty-four cents (232,937.34) or imprisonment for a term n ot
exceeding five years or to both such fine and imprisonment.
(4) For the purposes of this article, the expression "officer"
shall include any person in accordance with whose directions orinstructions the directors of a company have been accustomed toact.
Other offences by 
officers of companies being wound up.
Amended by:
L.N. 425 of 2007.309. (1) If any person, being a past or present officer of a
company - 
(a) does not to the best of his knowledge and belief fully
and truly reveal to the liquidator all the property,movable and immovable, corporeal or incorporeal, ofthe company, and how and to whom and for whatconsideration and when the company disposed of anypart thereof, except such part as has been disposed ofin the ordinary course of the business of the company;or
(b) does not deliver up to the liquidator, or as the
liquidator directs, all or such part of the property of thecompany as is in his custody or under his control, andwhich he is required by law to deliver up; or
(c) does not deliver up to the liquidator, or as the
liquidator directs, all accounts, accounting records and
                    COMP ANIES              [CAP. 386.       179
documents in his custody or under his control
belonging to the company and which he is required bylaw to deliver up; or
(d) makes any material omission in any statement relating
to the affairs of the company; or
(e) knowing or believing that a false debt has been proved
by any person in the winding up, fails for the period of
one month to inform the liquidator thereof; or
(f) after the dissolution of the company prevents the
production of any book or paper affecting or relatingto the property or affairs of the company; or
(g) after the dissolution of the company or at any meeting
of the creditors of the company within twelve monthsimmediately preceding the dissolution of the companyattempts to account for any part of the property of thecompany by fictitious losses or expenses,
he shall be guilty of an offence and shall be liable on convict ion to
a fine ( multa ) of not more than two hundred and thirty-two
thousand and nine hundred and thirty-seven euro and thirty-fourcents (232,937.34) or to imprisonment for a term not exceedingfive years or to both such fine and imprisonment if, at the tim e of
the commission of the alleged offence, the company is being wou nd
up, whether by the court or voluntarily, or if, subsequent to t he
commission of the alleged offence, the company is dissolved inaccordance with the provisions of article 214.
(2) For the purposes of this article, the expression "officer"
shall include any person in accordance with whose directions orinstructions the directors of a company have been accustomed toact.
Defence to a 
charge under article 309.310.  It shall be a good defence to a charge under any of
paragraphs ( a), (b), (c) and ( d) of article 309(1), if the accused
proves that he had no intent to defraud; and to a charge underparagraph ( f) of the said article, if he proves that he had no intent to
conceal the state of affairs of the company or to defeat the la w.
Fraud by 
contributory.
Amended by:
L.N. 425 of 2007.311.  If any contributory of any company being wound up
destroys, mutilates, alters or falsifies any accounts, accounti ng
records, documents, books or securities, or makes or is party t o the
making of any false or fraudulent entry in any register, accoun ting
record or document belonging to the company with intent todefraud or deceive any person, he shall be guilty of an offence  and
shall be liable on conviction to a fine ( multa ) of not more than two
hundred and thirty-two thousand and  nine hundred and thirty-sev en
euro and thirty-four cents (232,937.34) or to imprisonment for a
term not exceeding five years or to both such fine andimprisonment.
Remedy against 
delinquent directors, liquidators, etc.312. (1) The provisions of this article shall apply if in the
course of the winding up of a company, whether by the court orvoluntarily, it appears that a person who - 
(a) is or has been an officer of the company; 
 180        CAP. 386. ]                         COMP ANIES
(b) has acted as liquidator of the company; or
(c) not being a person falling within paragraphs ( a) and
(b), is or has been concerned, or has taken part in the
promotion, formation or management of the company,
has misapplied or retained or become accountable for, any money
or other property of the company, or been guilty of any imprope r
performance or breach of duty in relation to the company.
(2) The court may, on the application of the official receiver o r
the liquidator, or of any creditor or contributory, examine theconduct of any person referred to in sub-article (1) and may co mpel
him - 
(a) to repay, restore or account for the money or property
or any part of it, with interest at such rate as the courtthinks fit; or 
(b) to contribute such sum to the company’s assets by way
of compensation in respect of the improperperformance or breach of duty as the court thinks fit.
Fraud by officers 
of companies subsequently dissolved.
Amended by:
L.N. 425 of 2007.313. (1) If any person, being at the time of the commission of
the alleged offence, an officer of a company which is subsequen tly
dissolved in accordance with the provisions of article 214, has  - 
(a) by false pretences or by means of any other fraud
induced any person to give credit to the company; or
(b) with intent to defraud creditors of the company, made
or caused to be made any gift or transfer of or chargeon, or has caused or connived at the enforcement ofany executive title against, the property of thecompany; or
(c) with intent to defraud creditors of the company,
concealed or removed any part of the property of thecompany since, or within two months before, the dateof any unsatisfied judgment or order for payment ofmoney obtained against the company,
he shall be guilty of an offence and shall be liable on convict ion to
a fine ( multa ) of not more than two hundred and thirty-two
thousand and nine hundred and thirty-seven euro and thirty-fourcents (232,937.34) or imprisonment for a term not exceeding fiv e
years or to both such fine and imprisonment.
(2) A person shall not be guilty of an offence under sub-article
(1) by reason of conduct constituting an offence under paragrap h
(b) of the said sub-article which occurred more than five years
before the date of deemed dissolution.
Liability when 
proper accounting records are not kept by insolvent company.
Amended by:
L.N. 425 of 2007.314.  If, where a company is dissolved, it is shown that proper
accounting records were not kept by the company throughout theperiod of two years immediately preceding the dissolution or th e
period between the registration of the company and the dissolut ion,
whichever is the shorter, and it is furthermore shown that thecompany was, at the moment of its dissolution, unable to pay it s
debts, every officer of the company who is in default shall, un less
                    COMP ANIES              [CAP. 386.       181
he shows that he acted diligently and that in the circumstances  in
which the business of the company was carried on the default wa s
excusable, be guilty of an of fence and liable on conviction to a fine
(multa ) of not more than forty-six thousand and five hundred and
eighty-seven euro and forty-seven cents (46,587.47), orimprisonment for a term not exceeding three years, or to both s uch
fine and imprisonment.
Responsibility for 
fraudulent trading.
Amended by:
L.N. 425 of 2007.315. (1) If in the course of the winding up of a company,
whether by the court or voluntarily, it appears that any busine ss of
the company has been carried on with intent to defraud creditor s of
the company or creditors of any other person or for any fraudul ent
purpose, the court on the application of the official receiver,  or the
liquidator or any creditor or contributory of the company, may,  if it
thinks proper so to do, declare that any persons who wereknowingly parties to the carrying on of the business in the man ner
aforesaid be personally responsible, without any limitation ofliability for all or any of the debts or other liabilities of t he
company as the court may direct.
(2) Where the business of a company is carried on with such
intent or for such purposes as is mentioned in sub-article (1),  every
person who was knowingly a party in the carrying on of thebusiness in the manner aforesaid, shall be guilty of an offence  and
liable on conviction to a fine ( multa ) of not more than two hundred
and thirty-two thousand and nine hundred and thirty-seven euroand thirty-four cents (232,937.34) or imprisonment for a term n ot
exceeding five years, or to both such fine and imprisonment.
Wrongful trading. 316. (1) The provisions of this article shall apply where a
company has been dissolved and is insolvent and it appears that  a
person who was a director of the  company knew, or ought to have
known prior to the dissolution of the company that there was noreasonable prospect that the company would avoid being dissolve d
due to its insolvency.
(2) The court, on the application of the liquidator of a company
to which this article applies, may declare the person who was adirector referred to in sub-article (1) liable to make a paymen t
towards the company’s assets as the court thinks fit.
(3) The court shall not grant an application under this article if
it is satisfied that the person who was a director knew that th ere
was no reasonable prospect that the company would avoid beingdissolved due to its insolvency and accordingly took every step  he
ought to have taken with a view to minimising the potential los s to
the company’s creditors.
(4) For the purposes of sub-articles (2) and (3), the facts whic h
a director of a company ought to know or ascertain, the conclus ions
which he ought to reach and the steps which he ought to take, a re
those which would be known or ascertained, or reached or taken,  by
a reasonably diligent person having both - 
(a) the knowledge, skill and experience that may
reasonably be expected of a person carrying out thesame functions as are carried out by or entrusted to
 182        CAP. 386. ]                         COMP ANIES
that director in relation to the company; and
(b) the knowledge, skill and experience that the director
has. 
(5) For the purposes of this article, "director" includes a pers on
in accordance with whose directions or instructions the directo rs of
the company are accustomed to act.
Restriction on 
reuse of company names.
Amended by:
L.N. 425 of 2007.317. (1) The provisions of this article shall apply to a person
who, on or after the appointed day, was a director of a company("the company being wound up") at any time in the twelve monthspreceding its dissolution and the company is insolvent upon suc h
dissolution.
(2) Except with leave of the court, or in such circumstances as
may be prescribed, any person referred to in sub-article (1) sh all
not at any time during the winding up of the company and up to two
years from the date when its name is struck off the register - 
(a) be a director of a company that is known by a name
which is prohibited by virtue of the provisions of sub-article (3): or
(b) in any way, whether directly or indirectly, be
concerned or take part in the promotion, formation ormanagement of any such company; or
(c) in any way, whether directly or indirectly, be
concerned or take part in the carrying on of a businesscarried on under such a prohibited name.
(3) For the purposes of sub-article (2), a name is a prohibited
name in relation to any person referred to in sub-article (1) i f -
(a) it is a name by which the company being wound up
was known at any time in that period of twelvemonths; or
(b) it is a name which is so similar to a name falling
within paragraph ( a) as to suggest an association with
that company.
(4) A person who acts in contravention of the provisions of this
article shall be guilty of an offence and liable on conviction to a
fine ( multa ) of not more than eleven thousand and six hundred and
forty-six euro and eighty-seven cents (11,646.87). Such personshall also be personally responsible for the debts of any compa ny
referred to in sub-article (2)( a) and (b) which are incurred while he
acts in relation to the company in the manner described in thos e
paragraphs.
(5) For the purposes of this article, "director" includes a pers on
in accordance with whose directions or instructions the directo rs of
the company are accustomed to act.
Reference by court 
for prosecution of delinquent officers, etc.
Amended by: 
XXIV .1995.362.318.  If it appears to the court in the course of a winding up by
the court that any past or present officers, or any member of t he
company, or any other person, has been guilty of any offence inrelation to the company which is an offence under this Act or f or
                    COMP ANIES              [CAP. 386.       183
which he is otherwise criminally liable, the court shall, eithe r on
the application of any person interested in the winding up or o f its
own motion, refer the matter to the Commissioner of Policethrough the Registrar of Courts.
Report by 
liquidator for prosecution of delinquent officers, etc.319.  If it appears to the liquidator in the course of a voluntary
winding up that any past or present officer, or any member, of the
company has been guilty of an offence in relation to the compan y
which is an offence under this Act or for which he is otherwisecriminally liable, he shall forthwith report the matter to theCommissioner of Police.
Disqualification 
orders.
Amended by:
XXIV . 1995.362;L.N. 425 of 2007;XXXI.2020.3.320. (1) The court, upon the application of the Attorney General,
the Official Receiver or the Registrar, may make a disqualifica tion
order against any person who is found guilty of an offence unde r
this Act, other than an offence punishable only with a fine, or  who
has infringed any requirement of this Act with the consequence that
the person becomes liable to contribute to the assets of a comp any
or becomes personally liable for the debts of the company.
(2) The court, upon the application of the Attorney General, the
Official Receiver or the Registrar, may also make a disqu alification
order against any person if it is satisfied - 
(a) that such person, during the time he has been a director of
a company, has been in breach of the provisions of this Actfor the third time in a period of two (2) years that shall bereckoned from the first breach; or
(b) that such person is or has been a director of a company
which at any time has become insolvent, whether whilehe was a director or subsequently , and that his conduct as
a director of that company, either taken alone or takentogether with his conduct as a director of any othercompany or companies, makes him unfit to be involvedin the management of a company.
(3) A disqualification order made under this article may be for
a minimum period of one year and a maximum period of fifteenyears.
(4) For the purposes of this article, a disqualification order i s
an order whereby a person shall not, without leave of the court , be - 
(a) a director or company secretary of a company; or
(b) a liquidator or provisional administrator of a company;
or
(c) a special manager of the estate or business of a
company; or
(d) concerned in any way, whether directly or indirectly,
or take part in the promotion, formation ormanagement of a company, 
for a specified period beginning with the date of the order.
(5) A notice of a disqualification order made under this article
shall - 
(a) be delivered by the Registrar of Courts to the Registrar
 184        CAP. 386. ]                         COMP ANIES
for registration;
(b) be furthermore recorded in a register to be kept for this
purpose by the Registrar and which shall be open forpublic inspection.
(6) Any person who, while being subject to a disqualification
order, acts in contravention thereof, shall be guilty of an off ence
and liable on conviction to a fine ( multa ) of not more than forty-six
thousand and five hundred and eighty-seven euro and forty-sevencents (46,587.47) or imprisonment for a term not exceeding thre e
years or to both such fine and imprisonment.
Other remedies. 321.  The provisions of this Chapter shall be without prejudice
to any other offences or remedies which may exist under any oth er
law.
Chapter VI - Supplementary Provisions
Statement by 
liquidator in respect of pending winding up.
Amended by:
IV . 2003.120.322. (1) If, where a company is being wound up, whether by
the court or voluntarily, the winding up is not concluded withi n
twelve months after the dissolution of the company, the liquida tor,
not being the official receiver, shall, within thirty days from  the
expiry of the said period of twelve months, and subsequently atintervals of six months, until the winding up is concluded, sen d to
the Registrar for registration a statement with respect to theproceedings in and position of the winding up commencing on thedate when the liquidator was first appointed and drawn to the e nd
of the period in respect of which the statement is due, and mad e in
such form and containing such particulars as may be prescribed.  In
a winding up by the court, where the assets of the company havebeen fully realised and distributed before the expiration of a six-
monthly interval, a final statement shall be sent to the Regist rar for
registration.
(2) If a liquidator fails to comply with the provisions of this
article, he shall be liable to a penalty and, for every day dur ing
which the default continues, to a further penalty.
Supplementary 
powers of the court.323. (1) The court may, with respect to all matters relating to
the dissolution and winding up of a company, have regard to thewishes of the creditors or contributories of the company, as pr oved
to it by any sufficient evidence, and may, if it thinks fit, fo r the
purpose of ascertaining those wishes direct that meetings of th e
creditors or contributories be called, held and conducted in su ch
manner as the court considers appropriate and may appoint a per son
to act as chairman of any such meeting and to report the resultthereof to the court.
(2) In the case of creditors, regard shall be had to the value o f
each creditors’ debt; and in the case of contributories, regard  shall
be had to the number of votes conferred on each contributory by  the
memorandum or articles of the company or, if the memorandumand articles are silent, to the value of their respective liabi lities to
                    COMP ANIES              [CAP. 386.       185
contribute.
Publication of 
striking off and disposal of accounting records of company.
Amended by:
XIII. 2004.100.324. (1) Where the name of a company is struck off the
register, the Registrar shall forthwith proceed to publish a no tice
thereof in the Gazette or on a website maintained by the Regist rar.
(2) The liquidator shall keep the accounts, accounting records
and documents of the company for a period of ten years from thedate of publication of the striking of the company’s name off t he
register.
(3) If the liquidator fails to comply with sub-article (2) he sh all
be liable to a penalty.
Defunct 
companies.Substituted by:IV . 2003.121.
Amended by:
XIII. 2004.101.325. (1) Where the Registrar has reasonable cause to believe
that a company is not carrying on business or is not in operati on, he
may send to the company by post a letter inquiring whether thecompany is carrying on business or is in operation.
(2) If the Registrar receives an answer to the effect that the
company is not carrying on business or is not in operation, or does
not within one month of sending the letter receive an answerthereto, he may send to the company by post and publish a notic e in
the Gazette or on a website maintained by the Registrar and in a
daily newspaper circulating wholly or mainly in Malta that, at the
expiration of three months from the date of the last publicatio n of
the said notice, the company’s name shall, unless cause ispreviously shown to the contrary or the Registrar is satisfied that
there are sufficient grounds not to proceed with the striking o ff, be
struck off the register; and the assets of the company shall de volve
upon the Government of Malta.
(3) If, in any case where a company is being wound up
voluntarily, the Registrar has reasonable cause to believe eith er that
no liquidator is acting or that the affairs of the company are fully
wound up, and the returns required to be made by the liquidator  in
terms of article 322 are overdue by six months or more, theRegistrar may publish in the Gazette or on a website maintained  by
the Registrar and in a daily newspaper circulating wholly or ma inly
in Malta, a notice that at the expiration of three months from the
date of the last publication of the said notice, the winding up  of the
company shall, unless cause is previously shown to the contrary , be
deemed to be concluded and consequently that the company’s namebe struck off the register. The Registrar shall also cause a co py of
the said notice to be sent by post to the company and to theliquidator, if any. At the expiration of the aforesaid period o f three
months the winding up of the company shall, unless cause ispreviously shown to the contrary, be deemed to be concluded andthe Registrar shall strike the name of the company off the regi ster
and the company’s assets shall devolve upon the Government ofMalta.
(4) If any member or creditor of the company, or any other
person who appears to the Court to have an interest feels aggri eved
by the fact that the name of the company has been struck off th e
register by virtue of this article, the Court on an application  made
by the member or creditor or such other person before the
 186        CAP. 386. ]                         COMP ANIES
expiration of five years from the publication of the notice of the
striking off provided for in sub-articles (2) and (3) may, if s atisfied
that it is proper that the name of the company be restored to t he
register, order that such name be restored to the register, and  upon
an official copy of the order being delivered by the Registrar of the
Courts to the Registrar for registration, the company shall bedeemed to have continued in existence as if its name had not be en
struck off; and the Court may by its order give such directions  and
make such provisions as seem fit for placing the company and al l
other persons in the same position as nearly as may be as if th e
name of the company had not been struck off. The Registrar shal l
forthwith proceed to publish a notice in the Gazette or on a we bsite
maintained by the Registrar and in a daily newspaper circulatin g
wholly or mainly in Malta that the name of the company has beenrestored to the register.
(5) A notice to be sent under this article to a liquidator may b e
addressed to the liquidator at his last known place of business  or
address, and a letter or notice to be sent under this article t o a
company may be addressed to the company at its registered offic e.
(6) Notwithstanding that the name of the company has been
struck off the register in terms of the preceding provisions of  this
article, the liability, if any, of every director or other offi cer of the
company and of every member of the company shall continue andmay be enforced as if the name of the company had not been stru ck
off the register.
(7) Notwithstanding the provisions of article 429(1), the
provisions of this article shall apply to companies whosedissolution and consequential winding up is regulated by theOrdinance.
Relationship with 
enactments on bankruptcy.
Cap. 13.326. (1) Part III of the Commercial Code  relating to
bankruptcy shall not apply to a company.
(2) References in other laws other than Part III of the
Commercial Code to a bankrupt shall, when the context requires,  be
interpreted as including references to a company being wound up  in
circumstances of insolvency under the provisions of this Title,  and
references to bankrupt shall be construed accordingly.
PART VI - COMPANY RECONSTRUCTIONS
Power of company 
to compromise with creditors and members.
Amended by:
IV . 2003.122;XI. 2017.13.327. (1) Where a compromise or arrangement is proposed
between a company and its creditors, or any class of them, orbetween the company and its members, or any class of them:
(a) the court may, on the application of the company or
any creditor or member of it or, in the case of acompany being wound up, the liquidator, order ameeting of the creditors, or of the members of thecompany or class of members, as the case may be, tobe summoned in such manner as the court directs; or
                    COMP ANIES              [CAP. 386.       187
Cap. 474.(b) the company or any creditor, with the sanction of not less
than two-thirds of the creditors or class of creditors, mayseek the appointment of a mediator in terms of article 20of the Mediation Act, and such mediation shall organise ameeting of the creditors, or class of creditors, as the casemay be, in order for such creditors and the company toreach a compromise or arrangement. The principlesunder the Mediation Act shall apply.
(2) (a) If a majority in number representing two-thirds in
value of the creditors or class of creditors or members or clas s of
members, as the case may be, present and voting either in perso n or
by proxy at the meeting called in terms of sub-article (1)(a), agree to
any compromise or arrangement, the compromise or arrangement,if sanctioned by the court, shall be binding on all creditors o r the
class of creditors or on the members or class of members, as th e
case may be, and also on the company or, in the case of a compa ny
in the course of being wound up, on the liquidator andcontributories of the company.
(b)  If all the creditors, as a result of the mediation process,
execute a written agreement containing a compromise or arrangem ent
in terms of sub-article (1)(b), such arrangement shall be bindi ng on all
creditors, and also on the company or, in the case of a company  in the
course of being wound up, on the liquidator.
(3) The court’s order, compromise or agreement reached during
mediation in terms of sub-article (2) shall have no effect unti l a copy
of every such order, compromise or arrangement has been deliver ed to
the Registrar for registration in accordance with article 329(5 ); and a
copy of every such order, compromise or arrangement shall beannexed to every copy of the company’s memorandum issued afterorder, compromise or arrangement has been made.
(4) If a company makes default in complying with sub-article
(3), the company and every officer thereof who is in default sh all be
liable to a penalty.
(5)  For the purposes of this article and article 328 - 
(a) "company" means any company which is unable to pay
its debts in terms of article 214(5) or in those
circumstances where the court is of the opinion thatthere are grounds of sufficient gravity that would haveotherwise warranted the dissolution and consequentwinding up of the company in terms of article
214(2)( b)(iii); and
(b) "arrangement" includes a reorganisation of the
company’s share capital by the consolidation of sharesof different classes or by the division of shares intoshares of different classes, or by both of thosemethods.
Information as to 
compromise to be circulated.
Amended by:
XI. 2017.14.328. (1) The provisions of this article shall apply where a
meeting of creditors or any class of creditors, or of members o r any
class of members, is summoned or where a mediator is appointed in
terms of article 327.
 188        CAP. 386. ]                         COMP ANIES
(2) With every notice summoning the meeting which is sent to
a creditor or member there shall be sent also a statement expla ining
the effect of the compromise or arrangement and in particularstating any material interests of the directors of the company,whether as directors or as members or as creditors of the compa ny
or otherwise, and the effect on those interests of the compromi se or
arrangement, in so far as it is different from the effect on th e like
interests of other persons.
(3) In every notice summoning the meeting which is given by
advertisement there shall be included either such a statement a s
abovementioned or a notification of the place at which, and themanner in which, creditors or members entitled to attend themeeting may obtain copies of the statement.
(4) Where the compromise or arrangement affects the rights of
debenture holders of the company, the statement shall give the like
explanation as regards the holders of any security for the issu e of
the debentures as it is required to give as regards the company ’s
directors.
(5) Where a notice given by advertisement includes a
notification that copies of a statement explaining the effect o f the
compromise or arrangement proposed can be obtained by creditorsor members entitled to attend the meeting, every such creditor or
member shall, on making a request in the manner indicated by th e
notice, be furnished by the company free of charge with a copy of
the statement.
(6) If a company makes default in complying with any
requirement of this article, the company and every officer ther eof
who is in default shall be liable to a penalty; and for this pu rpose a
liquidator of the company shall be deemed to be an officer of t he
company:
Provided that a person shall not be liable under this sub-
article if he shows that the default was due to the refusal of another
person, being a director, to supply the necessary particulars o f his
interests.
(7) It shall be the duty of any director of the company to give
notice to the company and to any debenture holders of such matt ers
relating to himself as may be necessary for purposes of this ar ticle;
and any person who makes default in complying with this sub-article shall be liable to a penalty.
Provisions for 
facilitating company reconstruction or amalgamation.329. (1) The provisions of this article shall apply where
application is made to the court under article 327 for thesanctioning of a compromise or arrangement proposed between acompany and any such persons as are mentioned in that article.
(2) If it is shown - 
(a) that the compromise or arrangement has been proposed
for the purposes of, or in connection with, a schemefor the reconstruction of any company or companies,or the amalgamation of any two or more companies;and
                    COMP ANIES              [CAP. 386.       189
(b) that under the scheme the whole or any part of the
undertaking or the property of any company concernedin the scheme (in this article referred to as "atransferor company") is to be transferred to anothercompany (in this article referred to as "the transfereecompany"),
the court may, either by the order sanctioning the compromise o r
arrangement or by any subsequent order, make provision for all or
any of the matters specified in sub-article (3).
(3) The matters for which the court’s order may make provision
are - 
(a) the transfer to the transferee company of the whole or
any part of the undertaking and of the property orliabilities of any transferor company;
(b) the allotting or appropriation by the transferee
company of any shares, debentures, securities or otherlike interests in that company which under thecompromise or arrangement are to be allotted orappropriated by that company to or for any person;
(c) the continuation by or against the transferee company
of any legal proceedings pending by or against anytransferor company;
(d) the dissolution of any transferor company and the
striking off of its name, without its having to be woundup;
(e) the provision to be made for any persons who, within
such time and in such manner as the court directs,dissent from the compromise or arrangement;
(f) such incidental, consequential and supplemental
matters as are necessary to secure that thereconstruction or amalgamation is fully and effectivelycarried out.
(4) If an order under this article provides for the transfer of
property or liabilities, then - 
(a) that property shall by virtue of the order be transferred
to, and vest in, the transferee company; and
(b) those liabilities shall, by virtue of the order, be
transferred to and become liabilities of that company,
and property, if the order so directs, shall vest freed from an y
charge or other burden which shall, by virtue of the compromise  or
arrangement, cease to have effect.
(5) Where an order is made under this article, every company
in relation to which the order is made shall cause a certified copy of
the order to be delivered to the Registrar for registration wit hin
seven days after its making; and if default is made in complyin g
with this sub-article, the company and every officer thereof wh o is
in default shall be liable to a penalty, and, for every day dur ing
which the default continues, to a further penalty.
 190        CAP. 386. ]                         COMP ANIES
Duties of directors 
where company unable to pay debts.
Added by:
IV . 2003.123.329A.  Where the directors of a company become aware that the
company is unable to pay its debts or is imminently likely tobecome unable to pay its debts, they shall forthwith, not later  than
thirty days from when the fact became known to them, dulyconvene a general meeting of the company by means of a notice t o
that effect for a date not later than forty days from the date of the
notice for the purpose of reviewing the company’s position and of
determining what steps should be taken to deal with the situati on,
including consideration as to whether the company should bedissolved or, where applicable, w hether the company should make
a company recovery application in terms of article 329B.
Company recovery 
procedure.
Added by:
IV . 2003.123.
Amended by:
L.N. 425 of 2007;IX. 2008.32;XXXI. 2015.20;XI. 2017.15;XXXI.2020.4.329B.  (1) ( a) Where a company is unable to pay its debts or is
imminently likely to become unable to pay its debts, a companyrecovery application may be made to the Court requesting the Co urt
to place the company under the company recovery procedure and t o
appoint a special controller to take over, manage and administe r the
business of the company for a period to be specified by the Cou rt
subject to the limitation imposed by paragraph ( d).
(b) A company recovery application, hereinafter in this
article also referred to as the "application", shall bemade by means of an application which may be made:
(i) by the company following an extraordinary
resolution;
(ii) by the directors following a decision of the
board of directors whenever, following a notice to
convene a general meeting in terms of article329A, the general meeting does not convene, or aquorum is not present at the said meeting, or aresolution with regard to the filing of a recoveryapplication is not passed due to an unresolved tiefollowing a vote ; or
(iii) by creditors of the company representing more
than half in value of the company’s creditors; or
(iv)  by creditors forming part of a class of creditors if
such creditors represent more than half in value ofthe company’s creditors in that class.
(c)  (i)  Creditors with different interests should be treated
in separate classes which reflect those interests.
(ii) Where both secured and unsecured creditors exist,
they shall be treated as separate classes.
(d)  The appointment of a special controller shall be made for
a period not exceeding four months; provided that, at anytime during which the company recovery procedure is inforce, the court may, upon good cause being shown,extend the period by further periods of four months,provided that the aggregate additional periods do notexceed a further eight months.
(e) The Minister may, by regulations, amend or substitute
the criteria for the purpose of establishing theapplicability of the provisions of this article.
                    COMP ANIES              [CAP. 386.       191
(f) No application may be submitted by a company after it
has been dissolved voluntarily or if, in respect of thesame company, a winding-up order has already beenmade.
(2) ( a) The application shall, as far as possible, give the full
facts, circumstances and reasons which led to thecompany’s inability or likely imminent inability to payits debts, together with a statement by the applicants asto how the financial and economic situation of thecompany can be improved in the interests of itscreditors, employees and of the company itself as aviable going concern.
(b) Where an application is made by the company, the
following documents shall be annexed to it:
(i) a statement of the company’s assets and
liabilities made up to a date not earlier than thedate of the application by more than twomonths; and
(ii) a list containing the names and addresses,
including electronic mail addresses, of thecreditors together with an indication of theamount due to each such creditor and thesecurity, if any, of the respective creditors.
(c) Where the application is made by the creditors, it shall
be accompanied by appropriate supportingdocumentation and statements.
Power of the 
Court.(3) ( a) On the hearing of an application, the Court may, after
examining all the circumstances and the options thatare available, either dismiss the application or issue acompany recovery order, hereinafter also referred to inthis article as an "order", acceding thereto and placingthe company under the company recovery procedure.
(b) The Court shall accede to the application, and
accordingly place the company under the companyrecovery procedure and issue an order, only if -
(i) it is satisfied that the company is, or is
imminently likely to become, unable to pay itsdebts within the meaning of article 214(5); and
(ii) if it considers that the making of the order would
be likely to achieve one of the followingpurposes:
- the survival of the company as a viable going
concern in part or in whole; or
- the sanctioning under article 327 of a
compromise or arrangement between thecompany and any of its creditors ormembers.
(c) In making an order, the Court shall take into account:
(i) the best interests of the creditors, regard being
 192        CAP. 386. ]                         COMP ANIES
had to the different classes of creditors, of the
shareholders and of the company itself, and the
possibility of safeguarding employment asappears to be reasonably and financiallypossible in the circumstances; and
(ii) the cost that would have to be incurred by
adopting the company recovery procedure,particularly the fees and charges that would haveto be incurred.
(d) Where the company is in possession of a licence or
other authorisation under the laws regulating banking,insurance, investment services, financial institutionsor listing of securities on a Maltese regulated market,the court shall not proceed to make an order withoutfirst having consulted with the relevant competentauthority responsible for supervising that company orany of its activities.
(e) The Court shall take its decision whether to dismiss
the application or to make a company recovery orderwithin not more than forty working days from thefiling of the application.
Effect of the 
company recovery order.(4) (i) The provisions of this article shall not apply with
respect to any new financing given to the company forthe purpose of implementing a recovery plan:
Provided that new financing under this Act shall
exclude financing, debts or obligations which alreadyexisted at the time of the recovery order, even if suchfinancing, debts, or obligations are restructured in anymanner in order to be included with any financingobtained or to be obtained after the recovery order.
(ii) Upon the submission of an application and unless it
is dismissed, or during the period during which thecompany recovery procedure is in force:
(a) any pending or new winding up application shall be
stayed;
(b) no resolution for the dissolution and consequential
winding up of the company may be passed or giveneffect to;
(c) the execution of claims of a monetary nature against
the company and any interest that may otherwiseaccrue thereon shall be stayed;
(d) during the tenure of the lease, no landlord or other
person to whom rent is payable may exercise any rightof termination of lease in relation to premises leased tothe company in respect of a failure by the company tocomply with any term or condition of its tenancy ofsuch premises, except with leave of the Court andsubject to such terms as the Court may deem fit toimpose;
(e) no other steps may be taken to enforce any security
                    COMP ANIES              [CAP. 386.       193
over the property of the company, or to repossess
goods in the possession of the company under anyhire-purchase agreement, except with the leave of theCourt and subject to such terms as the Court may deemfit to impose;
Cap. 12.(f) no precautionary or executive act or warrant
mentioned in the Code of Organization and Civil
Procedure  shall be made or continued against the
company or any property of the company, including anywarrant in terms of article 312 of the 
Code of
Organization and Civil Procedure  except with leave of
the Court and subject to such terms as the Court maydeem fit to impose; 
(g) no arbitration proceeding shall be made or continued
against the company or any property of the company; and
(h) notwithstanding anything contained in this sub-article, no
judicial proceedings shall be commenced or continued
against the company or its property except with leaveof the Court and subject to such terms as the Courtthinks fit to impose.
Appointment of 
special controller.(5) ( a) In the order, the Court shall:
(i) appoint an individual to act as a special
controller for a period as specified in sub-article
(1)(c). The special controller shall carry out such
functions and powers as the Court may entrust tohim in the administration and management ofthe property and business of the company;
(ii) fix such reasonable remuneration of the special
controller, as the Court may consider appropriateafter taking into account the company’s financialposition, business and assets, and in terms of any
applicable regulations made by the Minister;
(iii) order that the remuneration and the
disbursements of the special controller areinitially paid out of a fund established byregulations in terms of sub-article (15), whichexpense shall be recoverable from the companyin accordance with this article. On the making ofsuch order, a copy thereof shall forthwith beforwarded by the Registrar of Courts to theOfficial Receiver.
The expense paid out pursuant to this article shall be
notified in writing to the company.
The company shall effect payment of expenses paid out
pursuant to this article without delay, upon a request by theOfficial Receiver and in the event that the company has beendissolved, the Official Receiver shall, in regard to the saidexpense, enjoy the same preferential ranking as a liquidator fo r
his expenses as properly incurred in accordance with this Act.
 194        CAP. 386. ]                         COMP ANIES
Cap. 12.Without prejudice to the previous paragraph, a copy of
the aforementioned request for payment, served bymeans of a judicial act on the company or itsofficers, shall constitute an executive title for alleffects and purposes of Title VII of Part I of BookSecond of the 
Code of Organization and Civil
Procedure .
(b) The Court shall appoint as the special controller an
individual from the list of individuals eligible to occupythe office of special controller held by the OfficialReceiver, regard being given to the nature of thecompany to be restructured and the special controller’sexperience and expertise in the management of businessenterprises. The Court shall ascertain that there is noconflict of interest in relation to his appointment.
(c) For so long as the special controller holds office, the
fact of his appointment to such office and his full nametogether with his residential or business address shallbe clearly indicated in all the business letters, orderforms, invoices and any other documents of thecompany.
Powers and duties 
of the special controller.(6) ( a) During the period that an order is in force, the
company shall continue to carry on its normalactivities under the management of the specialcontroller.
(b) The special controller shall, as soon as possible upon
his appointment, take into his custody or under hiscontrol all the property of the company and he shallthenceforth be responsible to manage and supervise itsactivities, business and property.
(c) The special controller shall examine the assets, affairs
and business performance of the company, and any
proposals made by the applicant in terms of sub-article(2)(a) as to how the financial and economic situation of
the company can be improved, and shall ascertain and
verify whether there is a reasonable expectation of thecompany’s recovery and continuation as a viable goingconcern, in whole or in part, and he shall submit aninitial report thereon to the Court not later than twomonths from the date of his appointment.
(d) On the appointment of the special controller, any
power conferred on the company, its directors or itsofficers, whether by this Act, by any other law, or bythe Memorandum or Articles of Association of thecompany, shall be suspended unless the consent of thespecial controller to exercise such power has beenobtained, which consent may be given either generallyor in relation to a particular case or cases, and nomeeting of the company may be summoned exceptwith leave of the Court and subject to such terms as theCourt may deem fit to impose.
                    COMP ANIES              [CAP. 386.       195
(e) During such time as the company recovery procedure
is in force, any duty conferred on the company, itsdirectors or its officers, whether by this Act, by anyother law, or by the Memorandum or Articles of
Association of the company, shall be assumed and
exercised by the special controller.
(f) In addition and without prejudice to any other duty
assigned to the special controller by the Court or this
Act or any other law, the special controller shall be
obliged to perform his functions fairly and equitablytaking into account the best interests of the company,its shareholders and creditors together with theinterests of any other interested party.
(g) In addition to the functions and powers entrusted to
him by the Court, the special controller shall have thepower:
(i) after informing the Court, by means of a note, to
remove any director of the company and toappoint any individual to serve as a manager;
(ii) to engage persons for the provision of
professional or administrative services, andcommit the company to the payment of theirrespective fees or charges; or
(iii) to call any meeting of the members or creditors
of the company.
(h) The special controller shall not, without the prior
express authorisation of the Court:
(i) engage the company into any commitment of
more than six months duration; or
(ii) terminate the employment of company
employees as he considers necessary forinsuring the continuation of the company as aviable going concern in whole or in part; or
(iii) sell or otherwise dispose of property of the
company to himself, or to his spouse or relatives
and the provisions of article 306 shall apply asthough references to the liquidator werereferences to the special controller.
(i) The Court may, upon the request of the special
controller, and upon good cause being shown, extendhis appointment and relative functions and powers toany company being a group company in relation to thecompany placed under the company recoveryprocedure, provided that, in so far as possible, theCourt shall, before so doing, hear the views of thedirectors, or any of them, of such group company, as itmay deem appropriate.
Meeting of 
creditors and members.(7) ( a) Within one month from his appointment, the special
controller shall convene a meeting or meetings ofcreditors and members, or classes thereof, whether
 196        CAP. 386. ]                         COMP ANIES
separately or jointly as he may consider appropriate,
for the purpose of -
(i) laying before them for their information and
review a comprehensive statement of thecompany’s affairs together with preliminaryproposals on the future prospects andmanagement of the company; 
(ii) appointing a joint creditors and members
committee, consisting of not more than threecreditors and not more than three members, torender such advice and assistance as the specialcontroller may require in the management of theaffairs, business and property of the companyand its recovery as a viable going concern; 
(iii) discussing the proposals for the future prospects
and management of the company, to be presentedto the court.
(b) Not less than seven days notice shall be given of the
holding of the first meeting of creditors and members, orclasses thereof, and the special controller shall also
send a copy of the notice convening the meeting to anydirectors or other officers of the company, includingpersons who have been directors or other officers inthe past, whose presence at the meeting is, in theopinion of the special controller, required.
(c) The special controller shall publish a notice of the first
meeting of creditors and members, or classes thereof, in adaily newspaper circulating wholly or mainly in Malta,not later than seven days before the holding of the
meeting.
(d) Where for any reason the creditors or the members or
both do not appoint their representatives on the jointcreditors’ and members’ committee, the specialcontroller may proceed to continue in the exercise ofhis functions without such committee or solely with acreditors’ or members’ committee, as the case may be;
(e)  The special controller shall ensure that any notice
convening the first meeting of creditors or members, orclasses thereof, shall also be given to known creditorsresiding or based abroad, and such foreign creditors shallalso be given the opportunity to participate in any suchmeeting, and any voting rights may be exercised bymeans of electronic communication.
Fraudulent trading. (8) ( a) If during such time as the company recovery procedure
is in force, it appears that any business of the company
has been carried on with intent to defraud creditors ofthe company or for any fraudulent purpose, the Courton the application of the special controller, may, if itthinks proper so to do, declare that any persons whowere knowingly parties to the carrying on of thebusiness in the manner aforesaid be personally
                    COMP ANIES              [CAP. 386.       197
responsible, without any limitation of liability for all
or any of the debts or other liabilities of the companyas the Court may direct.
(b) Where the business of a company is carried on with
such intent or for such purposes as is mentioned inparagraph ( a), every person who was knowingly a
party in the carrying on of the business in the manneraforesaid, shall be guilty of an offence and liable onconviction to a fine ( multa ) of not more than two
hundred and thirty-two thousand and nine hundred andthirty-seven euro and thirty-four cents (232,937.34) orimprisonment for a term not exceeding five years, or toboth such fine and imprisonment.
Wrongful trading. (9) ( a) The provisions of this sub-article shall apply where a
company recovery procedure is in force and it appearsthat a person who is a director of the company knew, orought to have known, that the company is unable topay its debts or is imminently likely to become unableto pay its debts.
(b) The Court, on the application of the special controller
of a company to which this sub-article applies, maydeclare the person being a director referred to inparagraph ( a) liable to make a payment towards the
company’s assets as the Court thinks fit.
(c) The Court shall not grant an application under this
sub-article if it is satisfied that the person who is adirector took every step he ought to have taken with aview to minimising the potential loss to the company’screditors.
(d) For the purposes of paragraphs ( b) and ( c), the facts
which a director of a company ought to know orascertain, the conclusions which he ought to reach andthe steps which he ought to take, are those whichwould be known or ascertained, or reached or taken,by a reasonably diligent person having both -
(i) the knowledge, skill and experience that may
reasonably be expected of a person carrying outthe same functions as are carried out by orentrusted to that director in relation to thecompany; and
(ii) the knowledge, skill and experience that the
director has.
(e) For the purposes of this sub-article, director includes a
person in accordance with whose directions orinstructions the directors of the company areaccustomed to act.
Removal or 
vacancy in the office of special controller.(10) ( a) If a vacancy occurs by reason of death, resignation or
otherwise in the office of the special controller, theCourt may appoint another individual to fill thevacancy on an application made for this purpose by theoutgoing special controller, by a creditor, by a member,
 198        CAP. 386. ]                         COMP ANIES
by a director, or by the Court of its own motion, as the
case may be.
(b) The Court may, of its own motion or on the application
of any member or creditor, review, confirm, modify orreverse any act or decision of the special controllerand give him such directions or orders as it deems fitor remove a special controller if it is satisfied thatthere exist sufficient grounds to warrant his removaland appoint another special controller.
Reports to be 
submitted by the special controller.(11) ( a) (i) At the end of the original period of appointment or at
the end of each extension, the sp ecial controller shall
submit to the Court a comprehensive report in writingon the proceedings of his administration and of hisproposals regarding the prospects for the recovery ofthe company as a viable going concern in whole or inpart.
(ii)  The special controller may, if he deems it is
reasonably necessary, together with the said report,present an application to the court for a one timeextension of his appointment for a further period of fourmonths up to a maximum period of appointment notexceeding twelve months;
(b) When the special controller submits to the Court the
report referred to in paragraph ( a), the Registrar of
Courts shall forthwith forward a copy of it to theRegistrar for registration;
(c) The court shall within a period not exceeding twenty
working days from the termination of the period ofappointment of the special controller, including anyextension thereof, declare the termination of thecompany recovery procedure, and that the companyhas recovered, or that it shall be dissolved and woundup, irrespective whether it has received the said reportfrom the special controller. The court shall make suchprovisions and conditions, as it may considernecessary in the circumstances of the case;
(d) Any creditor or member or the Registrar or the Official
Receiver may at any time after the lapse of the twentyworking days mentioned in paragraph (c) apply to thecourt for a declaration of the termination of the recoveryprocedure.
Termination of 
company recovery order.(12) ( a) If, at any time during which a company recovery
procedure is in force, it results to the special controller,after consulting the joint creditors’ and members’committee, that it would serve no useful purpose forthe company to continue with the said procedure, thespecial controller shall forthwith make an applicationto the Court for the termination of the companyrecovery procedure, containing his detailed andcomprehensive reasons therefor.
Following the receipt of the application made by the
                    COMP ANIES              [CAP. 386.       199
special controller for the termination of the company
recovery procedure, the Court shall order that thecompany be wound up by the Court. On the making ofthe winding up order, a copy thereof shall forthwith beforwarded by the Registrar of Courts to the Registrarfor registration.
(b) If, at any time during which a company recovery
procedure is in force, it results to the specialcontroller, after consulting the joint creditors’ andmembers’ committee, that the affairs of the companyhave improved to the extent that it is in a position topay its debts, he shall submit an application to theCourt, containing his detailed and comprehensivereasons to that effect, and requesting the Court to issuean order for the termination of the company recoveryprocedure. In the event that the Court accedes theapplication, it shall make such provisions andconditions, as it may consider necessary in thecircumstances of the case.
(c) If, at any time during which a company recovery
procedure is in force, the directors of the company orthe members at an extraordinary general meetingbecome satisfied that the affairs of the company haveimproved to the extent that it is in a position to pay itsdebts, they may submit an application to the Court,accompanied by appropriate supporting documentationand information, confirming that they are so satisfied,and requesting the Court to issue an order for thetermination of the company recovery procedure, andthe Court shall not proceed to make an order accedingto or declining the application without having firstheard the special controller.
In the event that the Court accedes the application, it
shall make such provisions and conditions, as it mayconsider necessary in the circumstances of the case.
(d) At the end of the period of his appointment, the special
controller shall submit a written final report to theCourt containing his detailed and comprehensiveopinions and reasons as to whether or not the company
has a reasonable prospect of continuing as a viablegoing concern in whole or in part and will be in aposition to pay its debts regularly in the future.
(e) Where the final report submitted by the special
controller expresses the opinion that the company hasa reasonable prospect of continuing as a viable goingconcern, in whole or in part, regard being had to the
interests of the creditors, the company and its members,and the particular classes of members and creditors, orwhere an application is made to the Court by thespecial controller under paragraph ( b), it shall
additionally have attached to it a precise and detailedrecovery plan which shall contain all the proposals
 200        CAP. 386. ]                         COMP ANIES
required to enable the company to continue as a viable
going concern, with such explanations as may berequired to give effect to such recovery, includingproposals in relation to financial resources, including
new financing the retention of employees and the
future management of the company. The said recoveryplan shall also explain the proposed manner of payingcreditors the whole or a proportion of their claims,whether a voluntary compromise has been reachedwith all the creditors, or whether it is proposed that theCourt sanction a compromise which has not beenapproved by all the creditors, and shall include the
position of the creditors with regard to the said proposals.
(f) Following receipt of the application referred to in
paragraph ( b) or of the final report and the recovery
plan, the Court may request any explanations andclarifications as it may consider appropriate whichshall be provided either verbally or in writing as theCourt may direct.
(g) The Court may either reject the proposed recovery
plan, or it may accept and approve it in whole or inpart and may require amendments thereto. Where theCourt approves the recovery plan submitted by thespecial controller, whether with or withoutamendments as the Court may direct, the recovery planshall be effective and binding on all interested partiesfor all purposes of law.
(h) Where the court accepts the proposed recovery plan, with
or without amendments, the dissenting creditors mayapply to the Court of Appeal (Inferior Jurisdiction)constituted in terms of article 41(6) of the Code ofOrganization and Civil Procedure, if they consider thattheir rights are likely to be reduced to a level which islower than what they would be granted had the companybeen dissolved and wound up at the time of the recoveryapplication in terms of sub-article (1)(b). In the interestof the creditors supporting the plan, such appeal shall not
automatically suspend the implementation of therecovery plan and procedures, and remedies shall belimited to compensation for the loss suffered by theapplicant as a result of the recovery procedure.
(i)  Where the proposed recovery plan seeks new financing,
the providers thereof shall, in the absence of anyfraudulent actions, be exempt from civil and criminalliability relating to the recovery procedure.
Submission of 
documents to Registrar for registration.(13) ( a) Upon the submission of a company recovery
application, the issue of a company recovery order, theappointment and termination of the appointment of aspecial controller and the appointment of areplacement thereof, the submission of an applicationfor the termination of a company recovery order andthe order of the Court terminating the company
                    COMP ANIES              [CAP. 386.       201
recovery procedure for any reason, the Registrar of
Courts shall forthwith submit a copy of any suchapplication, Court order or other relevant document tothe Registrar for registration.
(b) The Registrar of Courts shall forthwith forward a true
copy of the final report, as accepted and approved bythe Court, to the Registrar for registration.
(c) Notwithstanding the provisions of paragraphs ( a) and
(b), a copy of the recovery plan, attached to the final
report or required to be attached to an application forthe termination of a company recovery order, shall notbe delivered to the Registrar together with such reportor application.
Winding up by the 
Court.(14) Where, in terms of any of the provisions of this article, t he
Court issues an order for the termination of the company recove ry
procedure on the grounds that the company has no reasonableprospect of continuing as a viable going concern and will not b e in
a position to pay its debts regularly in the future, it shall o rder that
the company be wound up by the Court. On the making of thewinding up order, a copy thereof shall forthwith be forwarded b y
the Registrar of Courts to the Registrar for registration.
Power to make 
regulations.(15) The Minister may make regulations for the better carrying
out of any of the provisions of this article.
PART VII - CONVERSION OF COMMERCIAL 
PARTNERSHIPS 
Requirements for conversion of commercial partnerships.
Amended by:
IV . 2003.124.330. (1) A commercial partnership (in this Chapter referred to
as "the commercial partnership to be converted") may, bycomplying with the requirements prescribed in relation to theformation, share capital and validity of the kind of commercialpartnership into which it is to be converted, be converted into  a
commercial partnership of that kind (in this Chapter referred t o as
"the commercial partnership resulting from the conversion").
(2) Where the commercial partnership to be converted is either
an en nom collectif  or an en commandite  or limited partnership the
conversion may only be made by a decision taken in accordancewith the provisions of the deed of partnership or, in the absen ce of
any such provision, with the consent of all the partners both g eneral
and limited:
Provided that where one or more limited partners holding in
the aggregate not more than one-fourth of the total contributio n of
the limited partners of a partnership en commandite or limited
partnership, the capital of which is not divided into shares, o r one-
tenth of the share capital of the partnership en commandite or
limited partnership, the capital of which is divided into share s, have
not given their consent, the commercial partnership maynevertheless proceed with the conversion, but it shall be requi red,
for the purposes of the conversion, to liquidate and re-imburse  to
 202        CAP. 386. ]                         COMP ANIES
every limited partner who has not given his consent, if he so
requests, his interest in the commercial partnership or to rede em the
shares held by him on such terms as may be agreed or as the cou rt,
on a demand of either the commercial partnership or the limitedpartner, thinks fit to order.
(3) Where the commercial partnership to be converted is a
company, whether public or private, the conversion may only bemade if it has been approved by an extraordinary resolution tak en
at a general meeting of the company. The company shall berequired, for the purpose of the conversion, to redeem the shar es
held by the dissenting members, if they so request, on such ter ms as
may be agreed or as the court, on a demand of either the compan y
or the dissenting members, thinks fit to order.
(4) The commercial partnership to be converted shall be
dissolved without having to be wound up in accordance with theprovisions of Title II of Part V of this Act in relation to a c ompany
and with the relevant provisions of Part III of this Act in rel ation to
the other kinds of commercial partnerships; and dissolution sha ll be
deemed to take place when the conversion becomes effective inaccordance with the provisions of article 332.
Registration of the 
conversion of commercial partnerships.331. (1) The decision or resolution approving the conversion
of a commercial partnership together with the instruments givin g
effect to the decision or resolution, or an authentic copy ther eof,
shall be delivered for registration to the Registrar who, beingsatisfied that the requirements of article 330 have been compli ed
with, shall register it.
(2) The aforesaid delivery shall be made by any of the partners
or directors of the new commercial partnership as the case may be.
Where commercial 
partnership ceases to exist on conversion.332. (1) Upon the conversion of a commercial partnership
which has become effective either through the lapse of the peri od
referred to in article 334 or, where objection is made under th at
article, by a decision of the court, the Registrar shall strike  the
name of the commercial partnership that has been converted off the
register and shall issue a new certificate of registration for the
commercial partnership resulting from the conversion, denoting the
fact of the formation of that commercial partnership as a resul t of
the conversion. Where a conversion which has been registeredunder this article becomes ineffective by a decision of the cou rt
under article 334, the Registrar shall amend the registrationaccordingly.
(2) The Registrar shall, in the cases specified in sub-article ( 1),
either proceed to publish the conversion after it has becomeeffective or to publish a notice that the conversion has becomeineffective by decision of the court under article 334, in acco rdance
with the provisions of article 401(1)( e).
Partners with 
unlimited liability to remain bound unless creditors consent to conversion.333.  The conversion of a commercial partnership shall not
discharge partners with unlimited liability from liability for the
obligations of the commercial partnership contracted prior to t he
publication of the statement referred to in article 401(1)( e) unless it
                    COMP ANIES              [CAP. 386.       203
is proved that the creditors of the commercial partnership have
given their consent to the conversion.
Rights of creditors 
to oppose conversion.
Amended by:
L.N. 181 of 2006;L.N. 186 of 2006.334. (1) The conversion of a commercial partnership shall not
take effect until three months from the date of the publication  of the
statement referred to in article 401(1)( e) relating to the decision or
resolution approving the conversion.
(2) During the aforesaid period of three months any creditor of
the commercial partnership whose debt existed prior to thepublication of the statement referred to in sub-article (1) may  by
sworn application object to the conversion and, if he shows goo d
cause why it should not take effect, the court shall either uph old the
objection or allow the conversion on sufficient security beinggiven.
(3) Without prejudice to the provisions of sub-article (2) any
partner or shareholder, as the case may be, of the commercialpartnership being converted, or the Registrar, shall have the r ight to
challenge the validity of the conversion only within the afores aid
period of three months by means of a sworn application.
(4) Where as a result of the proceedings for which provision is
made in sub-article (3), the court is satisfied that the conver sion is
not valid, the court shall disallow the said conversion:
Provided that the court shall have the right to suspend its
decision disallowing the conversion and to grant time, which sh all
not be in excess of six months, to the commercial partnership i n
default, to remedy the default rendering the conversion invalid ; and
if the default is remedied within the time allowed the conversi on
shall take effect.
Commercial 
partnership formed succeeds commercial partnership ceasing to exist.
Amended by:
IV . 2003.125;XIX. 2010.35.335. (1) The commercial partnership resulting from the
conversion shall succeed to all the assets, rights, liabilities  and
obligations without the requirement of any formalities other th an
those arising under this Part, and shall retain the same legalpersonality of the commercial partnership that has been convert ed;
and the said succession shall be effective as regards third par ties.
(2) Where the commercial partnership resulting from the
conversion is a partnership en nom collectif  or a partnership en
commandite or limited partnership the unlimited liability of all the
partners in the partnership en nom collectif and that of the general
partners in the partnership en commandite or limited partnership, as
the case may be, shall also extend to the obligations of thecommercial partnership that has been converted.
PART VIII - AMALGAMATION OF COMMERCIAL 
PARTNERSHIPS 
TITLE I - AMALGAMATION OF PARTNERSHIPS EN NOM 
COLLECTIF AND  EN COMMANDITE
 204        CAP. 386. ]                         COMP ANIES
Application of 
articles 337 to 342.
Amended by:
IV . 2003.126.336. (1) The provisions of articles 337 to 342 shall apply to
the amalgamation of partnerships en nom collectif and partnerships
en commandite or limited partnerships .
(2) Amalgamation between two or more commercial
partnerships (referred to in this Part as "the amalgamatingcommercial partnerships") may be effected where all theamalgamating commercial partnerships are en nom collectif or
where they are all en commandite  or limited partnerships or where
at least one of the commercial partnerships being amalgamated i s
en nom collectif and the other commercial partnership or
partnerships are en commandite or limited partnerships, or vice
versa.
Requirements for 
amalgamation of commercial partnerships.337. (1) The provisions of article 330(2) shall apply to the
amalgamation of any two or more commercial partnerships whethersuch an amalgamation is effected by the formation of a newcommercial partnership (referred to in this Part as "the newcommercial partnership") instead of the existing commercialpartnerships (referred to in this Part as "the commercialpartnerships to be substituted") or by the merger of one or mor e
commercial partnerships (referred to in this Part as "the comme rcial
partnerships to be acquired") with another existing commercialpartnership (referred to in this Part as "the acquiring commerc ial
partnership") as though references to conversion therein werereferences to amalgamation.
(2) The commercial partnerships to be acquired or, as the case
may be, the commercial partnerships to be substituted, shall bedissolved without having to be wound up in accordance with therelevant provisions of Part III of this Act, and dissolution sh all be
deemed to take place when the amalgamation becomes effective inaccordance with the provisions of article 339.
Registration of the 
amalgamation of commercial partnerships.338. (1) The decisions taken by each of the amalgamating
commercial partnerships approving the amalgamation together wit h
the instruments giving effect thereto, or an authentic copy the reof,
shall be delivered for registration to the Registrar, who, bein g
satisfied that the requirements of article 337 have been compli ed
with, shall register them.
(2) The aforesaid delivery shall be made by any of the partners
of the new commercial partnership or of the acquiring commercia l
partnership as the case may be.
Where a 
commercial partnership ceases or partnerships cease to exist on amalgamation.339. (1) Upon the amalgamation of two or more commercial
partnerships which has become effective either through the laps e of
the period referred to in article 341 or where objection is mad e
under that article, by a decision of the court, the Registrar s hall
strike the name of the commercial partnership or of each of thecommercial partnerships ceasing to exist off the register and s hall,
according to the case, either issue a new certificate of regist ration
for the new commercial partnership denoting the fact of theformation of the commercial partnership as a result of theamalgamation, or issue a certificate of registration altered to  meet
the circumstances of the case and denoting the fact of the
                    COMP ANIES              [CAP. 386.       205
amalgamation for the acquiring commercial partnership; and wher e
an amalgamation which has been registered under this articlebecomes ineffective by a decision of the court under article 34 1, the
Registrar shall amend the registration accordingly.
(2) The Registrar shall, in the cases specified in sub-article ( 1),
in respect of every one of the amalgamating commercialpartnerships, either proceed to publish the amalgamation after it
has become effective or to publish a notice that the amalgamati on
has become ineffective by decision of the court under article 3 41,
in accordance with the provisions of article 401(1)( e).
Partners with 
unlimited liability to remain bound unless creditors consent to amalgamation.340.  The amalgamation of two or more commercial
partnerships shall not discharge partners with unlimited liabil ity
from liability for the obligations of the amalgamating commerci al
partnerships contracted prior to the publication of the stateme nt
referred to in article 401(1)( e), unless it is proven that the creditors
of the amalgamating commercial partnerships have given theirconsent to the amalgamation.
Right of creditors 
to oppose amalgamation.
Amended by:
L.N. 181 of 2006;L.N. 186 of 2006.341. (1) The amalgamation of two or more commercial
partnerships shall not take effect until three months from the date
of the publication of the statement referred to in article 401( 1)(e)
relating to the decisions approving the amalgamation.
(2) During the aforesaid period of three months any creditor of
any of the amalgamating commercial partnerships whose debtexisted prior to the publication of the statement referred to i n sub-
article (1) may by sworn application object to the amalgamation ,
and if he shows good cause why it should not take effect, the c ourt
shall either uphold the objection or allow the amalgamation toproceed upon sufficient security being given.
(3) Without prejudice to the provisions of sub-article (2) any
partner of any of the amalgamating commercial partnerships or t he
Registrar shall have the right to challenge the validity of theamalgamation only within the af oresaid period of three months b y
means of a sworn application.
(4) Where as a result of the proceedings for which provision is
made in sub-article (3), the court is satisfied that the amalga mation
is not valid, the court shall disallow the said amalgamation:
Provided that the court shall have the right to suspend its
decision disallowing the amalgamation and to grant time whichshall not be in excess of six months, to the commercial partner ship
or partnerships in default to remedy the default rendering theamalgamation invalid; and if the default is remedied within thetime allowed, the amalgamation shall take effect.
Acquiring or new 
commercial partnership succeeds commercial partnership ceasing to exist.
Amended by:
IV . 2003.127;II. 2004.59.342. (1) An acquiring commercial partnership or, where a new
commercial partnership is formed, the new commercial partnershi p,
shall succeed to all the assets, rights, liabilities and obliga tions of
the commercial partnership or partnerships ceasing to exist,without the requirement of any formalities other than thoserequired under this Title, and the said succession shall be eff ective
as regards third parties.
 206        CAP. 386. ]                         COMP ANIES
(2) Where the acquiring commercial partnership or the new
commercial partnership, as the case may be, is a partnership en nom
collectif , the unlimited liability of all the partners thereof shall als o
extend to the obligations of the commercial partnership orpartnerships ceasing to exist.
(3) Where the acquiring commercial partnership or the new
commercial partnership as the case may be is a partnership en
commandite  or limited partnership the unlimited liability of all the
general partners thereof shall also extend to the obligations o f the
commercial partnership or partnerships ceasing to exist.
TITLE II - AMALGAMATION OF COMPANIES
Amalgamation in 
the form of a "merger by formation of a new company" or "merger by acquisition".
Amended by:
IV . 2003.128.343. (1) Amalgamation of two or more companies may be
effected by - 
(a) merger by acquisition; or
(b) merger by formation of a new company.
(2) Merger by acquisition is the operation whereby a company
(referred to in this Part as "the acquiring company") acquires all the
assets and liabilities of one or more other companies (referred  to in
this Part as "the companies being acquired") in exchange for th e
issue to the shareholders of the companies being acquired of sh ares
in the acquiring company and a cash payment, if any, not exceed ing
ten per cent of the nominal value of the shares so issued.
(3) Merger by formation of a new company is the operation
whereby two or more companies (referred to in this Part as "themerging companies") deliver to a company which they set up(referred to in this Part as "the new company") all their asset s and
liabilities in exchange for the issue to the shareholders of th e
merging companies of shares in the new company and a cashpayment, if any, not exceeding ten per cent of the nominal valu e of
the shares so issued.
(4) The companies being acquired or, as the case may be, the
merging companies, shall be dissolved without having to be woun d
up in accordance with the provisions of Title II of Part V of t his Act
and dissolution shall be deemed to take place when theamalgamation becomes effective in accordance with the provision s
of article 353.
(5) The fact that one or more of the companies being acquired,
or one or more of the merging companies has been dissolvedvoluntarily by an extraordinary resolution, and a declaration o f
solvency has been filed shall not prevent such companies takingpart in the amalgamation provided that none of their assets hav e
been distributed to shareholders after dissolution. Any provisi on of
this Part requiring the directors of a company to act shall beinterpreted in relation to a company which has been dissolved a s
requiring the liquidator to act.
                    COMP ANIES              [CAP. 386.       207
(6) The fact that one or more of the companies being acquired
or one or more of the merging companies has been dissolved by t he
court in terms of article 214, and in the case of a voluntary w inding
up a declaration of solvency has not been filed, shall invalida te the
amalgamation with respect to all the amalgamating companies.
(7) A company may only be amalgamated with one or more
companies, and may not be amalgamated with any other kind ofcommercial partnership.
Chapter I - Merger by acquisition
Draft terms of 
merger.344. (1) The directors of the acquiring company and of each of
the companies being acquired (hereinafter referred to in this P art as
"the amalgamating companies") shall draw up draft terms of merg er
in writing.
(2) The draft terms of merger shall specify the following:
(a) the status, name and registered office of each of the
amalgamating companies;
(b) the share exchange ratio and the amount of any cash
payment;
(c) the terms relating to the allotment of shares in the
acquiring company;
(d) the date from which the holding of such shares entitles
the holders to participate in profits and any specialconditions affecting that entitlement;
(e) the date from which the transactions of each of the
companies being acquired shall be treated foraccounting purposes as being those of the acquiringcompany;
(f) the rights conferred by the acquiring company on the
holders of shares to which special rights are attachedand on the holders of debentures or other securities, orthe measures proposed concerning them; and
(g) any special advantage granted to the experts referred
to in article 348 acting on behalf of each of theamalgamating companies authorised to examine thedraft terms of merger and to draw up a written reportto the shareholders, and to the directors of each of theamalgamating companies.
(3) The draft terms of merger, duly completed, shall be signed
by at least one director and the company secretary of each of t he
amalgamating companies, and forwarded to the Registrar forregistration, who being satisfied that the requirements of sub-article (2) have been complied with, shall register them.
 208        CAP. 386. ]                         COMP ANIES
Approval by 
extraordinary resolution of amalgamation.
Amended by:
IV . 2003.129;XIX. 2010.36.345. (1) A merger by acquisition shall only be made if it has
been approved by an extraordinary resolution of each of theamalgamating companies. Each of such companies shall berequired to redeem the shares held by the dissenting members, i f
they so request, on such terms as may be agreed or as the court , on
a demand by either the company or the dissenting members, think s
fit to order.
(2) For the purposes of sub-article (1), approval shall not be
valid unless the extraordinary resolution is adopted at least o ne
month after the publication of the draft terms of merger and no t
later than three months therefrom.
(3) The provisions of this Act governing alterations and
additions to the memorandum and articles shall, as appropriate,apply to any alterations and additions to the memorandum andarticles necessitated by any amalgamation referred to in this P art.
(4) Where there is more than one class of shares in any of the
amalgamating companies the extraordinary resolutions of thosecompanies concerning the amalgamation shall be subject to aseparate vote by at least each class of shareholders whose righ ts are
affected thereby.
(5) The extraordinary resolution taken by each of the
amalgamating companies shall cover both the approval of the dra ft
terms of merger and any alterations and additions to thememorandum and articles necessitated by the amalgamation.
(6) The approval of the general meeting of the acquiring
company shall not be required if the following conditions arefulfilled - 
(a) the draft terms of the merger for the acquiring
company have been duly published in accordance withparagraph ( e) of sub-article (1) of article 401 by the
Registrar at least one month before, and not more thanthree months before the date fixed for the generalmeeting of the company or the latest of the separategeneral meetings of the companies being acquiredwhich are to decide on the draft terms of merger; and
(b) at least one month before the date specified in
paragraph ( a), all shareholders of the acquiring
company shall be entitled to inspect the documentsreferred to in article 349, in accordance with theprovisions of that article:
Provided that, in any case, one or more shareholders of the
acquiring company holding at least five per cent of the issued share
capital of the company entitled to vote at general meetings of the
company shall have the right to require that a general meeting of
the acquiring company be called to decide whether to approve th e
amalgamation. 
                    COMP ANIES              [CAP. 386.       209
Drawing up of 
detailed written report on draft terms of merger by directors.Substituted by:XIX. 2010.37.346. (1) The directors of each of the amalgamating companies
shall:
(a) draw up a detailed written report explaining the draft
terms of the merger and setting out the legal andeconomic grounds for them, in particular the shareexchange ratio, and shall describe any specialvaluation difficulties which have arisen; and
(b) inform the general meeting of their company and the
directors of the other amalgamating company orcompanies so that they may inform their respectivegeneral meetings, of any material change in the assetsand liabilities between the date of preparation of thedraft terms of merger and the date of the generalmeetings which are to decide on the draft terms ofmerger.
(2) The report referred to in sub-article (1)( a) and the
information referred to in sub-article (1)( b) shall not be required if
all the shareholders and the holders of other securities confer ring
the right to vote of each of the amalgamating companies have soagreed.
Non applicability 
of article 73(4), (5) and (6) in certain cases of amalgamation.
Amended by:
XIX. 2010.38.347.  In the event of an increase in the issued share capital made
to pay the shareholders of the companies being acquired in orde r to
give effect to an amalgamation, ar ticle 73(4), (5) and (6) shall not
apply where an independent expert’s report on the draft terms o f
merger is drawn up.
Written report to 
shareholders to be drawn up by one or more experts.
Amended by:
IX. 2008.33.348. (1) One or more experts acting on behalf of each of the
amalgamating companies, but independent of them and approvedby the Registrar, shall examine the draft terms of the merger a nd
draw up a written report to the shareholders.
(2) The report shall specify whether the share exchange ratio is
fair and reasonable and to this effect it shall - 
(a) indicate the method or methods used to arrive at the
share exchange ratio proposed; and
(b) state whether such method or methods are adequate in
the case in question, indicating the values arrived atusing each such method and giving an opinion on therelative importance attributed to such method ormethods in arriving at the value decided on.
(3) The report shall describe any special valuation difficulties
which have arisen.
(4) Each expert shall be entitled to obtain from the
amalgamating companies all relevant information and documentsand to carry out all necessary investigations.
(5) One or more independent experts may be appointed to draw
up a joint report for all the amalgamating companies by theRegistrar at the joint request of the companies involved.
(6) The provisions of this article shall not apply if all the
shareholders of all the companies involved in the amalgamation
 210        CAP. 386. ]                         COMP ANIES
have so agreed.
Documents which 
shareholders of amalgamating companies are entitled to inspect.
Amended by:
IX. 2008.34;XIX. 2010.39.349. (1) All shareholders of every amalgamating company are
entitled to inspect the following documents at the registered o ffice
of each company at least one month before the date fixed for th e
general meeting which is to decide on the draft terms of merger  - 
(a) the draft terms of merger;
(b) the annual accounts and the directors’ reports of the
amalgamating companies for the preceding threeaccounting periods;
(c) where required, an accounting statement drawn up as
at a date which shall not be earlier than the first day ofthe third month preceding the date of the draft terms ofthe merger, if the latest annual accounts relate to anaccounting period which ended more than six monthsbefore that date;
(d) where required, the reports of the directors of the
amalgamating companies relating to theamalgamation;
(e) where required, the reports of the experts relating to
the amalgamation; and
Cap. 345.(f) for the purposes of paragraph ( c), an accounting
statement shall not be required if the companypublishes a half-yearly financial report in accordancewith listing rules issued in terms of the 
Financial
Markets Act and governing such reports, and makes it
available to shareholders in accordance with this sub-article. Furthermore, an accounting statement shall notbe required if all the shareholders and all holders ofother securities conferring the right to vote of each ofthe companies involved in the merger have so agreed.
(2) The accounting statement provided for in paragraph ( c) of
sub-article (1) shall be drawn up using the same methods and th e
same layout as used for the latest balance sheet:
   Provided that - 
(a) it shall not be necessary to take a fresh physical
inventory; and
(b) the valuations shown in the latest balance sheet shall
be altered only to reflect entries in the accountingrecords. 
   Notwithstanding the provisions of paragraphs ( a)
and (b), interim depreciation and provisions as well as
material changes in actual values not shown in theaccounting records shall be taken into account.
(3) Every shareholder shall be entitled to obtain, on request an d
free of charge, full or, if so desired, partial copies of the d ocuments
mentioned in sub-article (1), and where a shareholder hasconsented to the use by the company of electronic means forconveying information, such copies may be provided in such
                    COMP ANIES              [CAP. 386.       211
manner.
(4) A company shall be exempt from the requirement to make
the documents referred to in sub-article (1) available at itsregistered office if, for a continuous period beginning at leas t one
month before the day fixed for the general meeting which is todecide on the draft terms of merger and ending not earlier than  the
conclusion of that meeting, it makes them available on its webs ite.
(5) Sub-article (3) shall not apply if the company’s website
gives shareholders the possibility, throughout the period refer red to
in sub-article (4), of downloading and printing the documentsreferred to in sub-article (1).
Registration of the 
amalgamation of companies.350.  The extraordinary resolutions taken by each of the
amalgamating companies approving the amalgamation togetherwith the instruments giving effect thereto, or an authentic cop y
thereof, shall be delivered for registration to the Registrar, who,
being satisfied that the requirements of this Part have beencomplied with, shall register them.
Rights of creditors 
to oppose amalgamation.
Amended by:
L.N. 181 of 2006;L.N. 186 of 2006.351. (1) The amalgamation of two or more companies shall
not take effect until three months from the date of the lastpublication of the statement referred to in article 401(1)( e) relating
to the extraordinary resolutions approving the amalgamation,referred to in article 350.
(2) During the aforesaid period of three months any creditor of
any of the amalgamating companies whose debt existed prior to t he
publication of the draft terms of merger in terms of article 345(6)( a)
may by sworn application object to the amalgamation and, if heshows good cause why it should not take effect, the court shalleither uphold the objection or allow the amalgamation on suffic ient
security being given.
(3) The provisions of sub-articles (1) and (2) shall apply to th e
debenture holders of the amalgamating companies so long as themerger has not already been approved by the debenture holdersindividually, or by a special meeting of the debenture holders called
specifically for the purpose, at which meeting all the debentur e
holders shall signify their consent.
Protection of 
holders of securities in an amalgamation.352.  The holders of securities, other than shares, in the
companies being acquired, to which special rights are attachedshall be given rights against the acquiring company in accordan ce
with the draft terms of merger at least equivalent to those the y
possessed in the companies being acquired, unless - 
(a) the holders of those securities individually agree to the
alteration of their rights; or
(b) the alteration has been approved by a meeting of the
holders of those securities called specifically for thepurpose, at which meeting all the holders of suchsecurities shall signify their consent; or
(c) the holders of those securities are entitled to have their
securities re-purchased by the acquiring company.
 212        CAP. 386. ]                         COMP ANIES
Duties of Registrar 
in respect of amalgamations.353. (1) Upon the amalgamation of two or more companies
which has become effective either through the lapse of the peri od
referred to in article 351 or, where objection is made under th at
article, by decision of the court, the Registrar shall strike t he name
of the companies being acquired off the register and issue acertificate of registration, altered to meet the circumstances of the
case and denoting the fact of the merger for the acquiring comp any;
and where an amalgamation which has been registered under thisPart does not become effective pursuant to a decision of the co urt
under article 351, the Registrar shall amend the registrationaccordingly.
(2) The Registrar shall in respect of every one of the
amalgamating companies, either p roceed to publish a notice of t he
amalgamation after it has become effective or to publish a noti ce
that the amalgamation has not become effective pursuant to adecision of the court under article 351, in both cases as speci fied in
sub-article (1).
Consequences of 
amalgamation.
Amended by:
IV . 2003.130;II. 2004.60;XIX. 2010.40.354. (1) An amalgamation shall have the following
consequences: 
(a) the acquiring company shall succeed to all the assets,
rights, liabilities and obligations of the companiesbeing acquired, both as between the companies beingacquired and the acquiring company and as regardsthird parties, without the requirement of anyformalities other than those arising under this Title;
(b) the shareholders of the companies being acquired shall
become shareholders of the acquiring company; and
(c) the companies being acquired shall cease to exist.
(2) No shares in the acquiring company shall be exchanged for
shares in the companies being acquired held either - 
(a) by the acquiring company; or
(b) by the companies being acquired.
(3) Where the assets of a company being acquired include
immovable property or rights relating thereto, the directors of  the
acquiring company shall cause wi thin one month from the coming
into force of the amalgamation, a declaratory public deed to bepublished, containing a detailed description of the immovableproperty or rights relating thereto delivered to the acquiringcompany, and a true copy of the said deed shall be lodged with the
Registrar within fourteen days from the enrolment thereof at th e
Public Registry.
Liability of 
director or expert for misconduct.355.  Any director of any of the amalgamating companies
answerable for wilful or negligent misconduct in the preparatio n
and the implementation of the amalgamation, or any expertresponsible for drawing up, on behalf of any of the amalgamatin g
companies, of the report on the draft terms of the mergeranswerable for wilful or negligent misconduct in the performanc e
of his duties, shall be liable for all damages occasioned to an y
shareholder of any of the amalgamating companies as a
                    COMP ANIES              [CAP. 386.       213
consequence of his misconduct.
Appeal from 
decision of the Registrar.
Amended by:
XIII. 2004.102.356.  Any interested party may contest the registration made by
the Registrar, by virtue either of article 344 or article 350 b efore
the court in accordance with the following conditions:
(a) the contestation shall be made by application against
the Registrar within one month from the publicationfollowing the registration referred to in article 344 onthe grounds that the draft terms of merger were notdrawn up in accordance with the provisions of article344; or within three months from the publicationfollowing the registration referred to in article 350 onthe grounds that the resolution of the extraordinarygeneral meeting was void or voidable; notice of theapplication shall be published by the Registrar in theGazette or on a website maintained by the Registrar;
(b) where it is possible to remedy a defect liable to render
an amalgamation void or voidable, the court shallgrant the companies involved a period within which torectify the situation;
(c) a notice that the judgment of the court has been
delivered shall be published by the Registrar in theGazette or on a website maintained by the Registrar,which notice shall specify whether the application hasbeen allowed or dismissed;
(d) a judgment declaring an amalgamation void or
voidable shall not of itself affect the validity ofobligations owed by or in relation to the acquiringcompany which arose before the judgment wasdelivered and after the date of registration of the draftterms of merger referred to in article 344 or of theresolutions and the other instruments referred to inarticle 350 according to the case;
(e) companies which have been parties to an
amalgamation shall be jointly and severally liable inrespect of the obligations of the acquiring companyreferred to in paragraph  (d);
(f) the amalgamation shall not take effect until the lapse
of the three months referred to in paragraph ( a) or, if
an application is filed, until the date of the finaljudgment, if the application is refused; and
(g) upon the delivery of the judgment the Registrar shall,
where the application is allowed, amend theregistration accordingly as if the amalgamationprocedure had never commenced.
Chapter II - Merger by formation of a new company
 214        CAP. 386. ]                         COMP ANIES
Application of 
articles 344 to 356 to merger by formation of a new company.
Amended by:
IV . 2003.131;II. 2004.62;XIX. 2010.41.357. (1) The provisions of articles 344 to 356 other than article
345(6) shall apply to merger by formation of a new company asthough references to the acquiring company were references to t he
new company and as though references to the amalgamatingcompanies and to the companies being acquired were references t o
the merging companies:
Provided that, in the case of a merger by formation of a new
company, the draft terms of merger shall only be drawn up by ea ch
of the merging companies:
Provided further that in article 344(2)( a), the reference to
amalgamating companies shall also include the new company.
(2) The draft terms of merger of each of the merging companies
and the memorandum and articles of association of the newcompany shall be approved by an extraordinary resolution of eac h
of the merging companies.
(3) The new company shall be formed in accordance with the
provisions of this Act except that the rules governing theverification of any consideration other than cash laid down inarticle 73(4), (5) and (6) shall not apply where an independentexpert’s report on the draft terms of merger is drawn up.
(4) The Registrar shall, after striking the name of the company
being acquired off the register in accordance with the provisio ns of
article 353(1), proceed to issue a certificate of registration for the
new company denoting the fact of the formation of that company as
a result of the merger.
Chapter III - Acquisition of one company by another which 
holds ninety per cent or more of its shares
Acquisition of one 
company by another which holds all its shares.
Amended by:
IV . 2003.132;XIX. 2010.42.358. (1) The operation whereby the assets and liabilities of
one or more companies are delivered to another company which isthe holder of all their shares and other securities conferring the
right to vote at general meetings and whereby the formercompanies are dissolved without having to be wound up shall beregulated by articles 344 to 356 to the exclusion of the provis ions
contained in ar ticle 344(2)( b), (c) and (d), article 346, article 348,
particle 349(1)( d) and ( e), article 354(1)( b) and article 355.
(2) For the purpose of this article and of article 359, any
reference to "draft terms of acquisition" shall be taken to be a
reference to "draft terms of merger" as specified in article 34 4.
(3) The approval of the general meeting of each of the
companies involved in the operation shall not be required andarticle 345 shall not apply to the operation specified in sub-a rticle
(1), if the following conditions are fulfilled:
(a) the draft terms of acquisition as regards each company
involved in the operation shall be delivered to theRegistrar for registration and shall be published byhim at least three months before the operation takes
                    COMP ANIES              [CAP. 386.       215
effect; and
(b) within the period mentioned in paragraph ( a), all
shareholders of the acquiring company shall beentitled to inspect at the registered office of thecompany the documents specified in article 349(1)( a),
(b) and where required, ( c) which those same
shareholders would be entitled to inspect in case of anamalgamation made in any of the manners specified inarticle 343; and the provisions of article 349(2), (3),(4) and (5) shall apply:
Provided that, in any case, the shareholders of the acquiring
company holding at least five per cent of the issued share capi tal
carrying the right to vote at general meetings of the company s hall
be entitled to require that a general meeting of the acquiringcompany be called to decide whether to approve the operation.
Acquisition of one 
company by another which holds 90% or more, but not all, of its voting shares.
Amended by:
IV . 2003.133;IX. 2008.35;XIX. 2010.43.359. (1) Where a merger by acquisition is carried out by a
company which holds ninety per cent or more, but not all, of th e
shares and other securities conferring the right to vote at gen eral
meetings of the company or companies being acquired, the genera l
meeting of the acquiring company need not approve the acquisiti on
provided the following conditions are fulfilled:
(a) the draft terms of the acquisition as regards the
acquiring company shall be delivered to the Registrarfor registration and shall be published by him;
(b) the general meetings of the companies being acquired
which are to decide on the draft terms of acquisitionshall be held at least one month after, and not laterthan three months from the publication referred to inparagraph ( a);
(c) within the period mentioned in the preceding
paragraph, all shareholders of the acquiring companyshall be entitled to inspect the documents referred to inarticle 358(3)( b) and the provisions of the said article
358(3)( b) shall apply;
(d) the provisions of the proviso to article 358(3) shall
apply to the acquisition regulated by this article.
(2) All the other provisions of Chapter I of this Part relating to
merger by acquisition shall apply:
Provided that the provisions regarding the drawing up of a
report on the draft terms of the merger by the directors and by  the
experts as specified in articles 346 and 348 respectively and t he
right of all shareholders to inspect and obtain copies of thedocuments specified in article 349 shall not apply, as long as the
dissenting minority shareholders of the company or companiesbeing acquired have the right to have their shares purchased by  the
acquiring company for a consideration corresponding to the fairvalue of their shares and in the event of disagreement regardin g the
fair value of such consideration, as shall be determined by thecourt.
 216        CAP. 386. ]                         COMP ANIES
PART IX - DIVISION OF COMPANIES
Division of a 
company by acquisition or by formation of new companies.
Amended by:
IV . 2003.134.360. (1) Division of a company into two or more companies
may be effected by - 
(a) division by acquisition; or
(b) division by formation of new companies; or
(c) division by a combination of a division by acquisition
with a division by the formation of one or more newcompanies.
(2) Division by acquisition is the operation whereby a company
(referred to in this Part as "the company to be divided") deliv ers to
two or more existing companies (referred to in this Part as "th e
recipient companies") all its assets and liabilities in exchang e for
the allocation to the shareholders of the company to be divided  of
shares in the recipient companies and a cash payment, if any, n ot
exceeding ten per cent of the nominal value of the shares so is sued.
(3) Division by formation of new companies is the same as the
operation described in sub-article (2) except that the recipien t
companies are formed as new companies for the purposes of takin g
part in the division. The expression "the companies involved in  a
division" used in the case of a division by formation of newcompanies in this Part shall be interpreted as referring only t o the
company to be divided.
(4) Division by a combination of a division by acquisition with
a division by formation of one or more new companies is the sam e
as the operation described in sub-article (2) combined with theoperation as described in sub-article (3).
(5) The company to be divided shall be dissolved without
having to be wound up in accordance with the provisions of Titl e II
of Part V of this Act; dissolution shall be deemed to take plac e
when the division becomes effective in accordance with theprovisions of article 370.
(6) The fact that the company to be divided has been dissolved
voluntarily by an extraordinary resolution, and a declaration o f
solvency has been filed, shall not prevent that company taking part
in the division provided that none of its assets have beendistributed to shareholders aft er dissolution. Any provision of  this
Part requiring the directors of a company to act shall be inter preted
in relation to a company which has been dissolved as requiring the
liquidator to act.
(7) The fact that the company to be divided has been dissolved
by the court in terms of article 214, and in the case of a volu ntary
winding up a declaration of solvency has not been filed, shallinvalidate the division with respect to all the companies invol ved in
the division.
(8) A division of a company may only be effected into two or
more companies, and it shall not be possible to effect a divisi on
involving any other kind of commercial partnership.
                    COMP ANIES              [CAP. 386.       217
Chapter I - Division by acquisition
Draft terms of 
division.
Amended by:
IV . 2003.135.361. (1) The directors of the company to be divided and of
each of the recipient companies (hereinafter referred to in thi s Part
as "the companies involved in a division") shall draw up draft terms
of division in writing.
(2) The draft terms of division shall specify the following:
(a) the status, name and registered office of each of the
companies involved in the division;
(b) the share exchange ratio and the amount of any cash
payment;
(c) the terms relating to the allotment of shares in each of
the recipient companies;
(d) the date from which the holding of such shares entitles
the holders to participate in profits and any specialconditions affecting that entitlement;
(e) the date from which the transactions of the company to
be divided shall be treated for accounting purposes asbeing those of one or other of the recipient companies;
(f) the rights conferred by each of the recipient companies
on the holders of shares to which special rights areattached and the holders of securities other thanshares, or the measures proposed concerning them;
(g) any special advantage granted to the experts referred
to in article 364 and to the directors of each of thecompanies involved in the division;
(h) the precise and detailed description and allocation of
the assets, rights, liabilities and obligations to bedelivered to each of the recipient companies; and
(i) the allocation to the shareholders of the company to be
divided of shares in the recipient companies and thecriterion upon which such allocation is based.
(3) Where an asset is not allocated by the draft terms of
division and where the interpretation of these terms does not m ake
a decision on its allocation possible, the asset or the conside ration
therefor shall be allocated to all the recipient companies inproportion to the share of the net assets allocated to each of those
companies under the draft terms of the division.
(4) Where a liability is not allocated by the draft terms of
division and where the interpretation of these terms does not m ake
a decision on its allocation possible, each of the recipientcompanies shall be jointly and severally liable for it:
Provided that such joint and several liability shall be
limited to the net assets allocated to each company.
(5) The draft terms of division for each of the companies
involved in a division duly completed, shall be signed by at le ast
one director and the company secretary of each of the companiesinvolved in the division, and forwarded to the Registrar by eac h
 218        CAP. 386. ]                         COMP ANIES
company for registration, who being satisfied that the requirem ents
of the provisions of this article have been complied with, shal l
register them.
Approval by 
extraordinary resolution of division.
Amended by:
IV . 2003.136;XIX. 2010.44.362. (1) A division may only be made if it has been approved
by an extraordinary resolution of each company involved in thedivision to be adopted by each such company at least one monthafter the publication of its draft terms of division and not la ter than
three months therefrom.
(2) Where shares in the recipient companies are allocated to the
shareholders of the company to be divided otherwise than inproportion to their rights in the capital of that company, thedissenting members of that company may exercise the right to ha ve
their shares redeemed. In such case, the shares shall be redeem ed
on such terms as may be agreed or as the court, on a demand mad e
either by any of the recipient companies or by any of the disse nting
members of the company to be divided, thinks fit to order.
(3) The provisions of this Act governing alterations and
additions to the memorandum and articles shall, as appropriate,apply to any alterations and additions to the memorandum andarticles necessitated by any division referred to in this Part.
(4) Where there is more than one class of shares in any of the
companies involved in a division the extraordinary resolutions of
those companies concerning the division shall be subject to aseparate vote by at least each class of shareholders whose righ ts are
affected thereby.
(5) The extraordinary resolution taken by each of the
companies involved in a division shall cover both the approval of
the draft terms of division a nd any alterations and additions t o the
memorandum and articles necessitated by the division.
(6) The general meeting of any recipient company shall not be
required if the following conditions are fulfilled: 
(a) the publication of the statement referred to in article
401(1)( e), provided for pursuant to the registration
required by virtue of article 361(5) shall be effected,
for each recipient company, at least one month and notmore than three months before the date fixed for thegeneral meeting of the company to be divided which is
to decide on the draft terms of division;
(b) at least one month before the date specified in
paragraph ( a) all shareholders of each recipient
company shall be entitled to inspect the documentsspecified in article 365(1) in accordance with theprovisions of that article; and
(c) one or more shareholders of any recipient company
holding at least five per cent of the issued share capitalwhich carries a right to vote at general meetings of thecompany shall be entitled to require that a generalmeeting of that recipient company be called to decidewhether to approve the division.
                    COMP ANIES              [CAP. 386.       219
(7) Without prejudice to sub-article (6), approval of the
division by the general meeting of the company being divided sh all
not be required if the recipient companies together hold all th e
shares and other securities conferring the right to vote at gen eral
meetings of the company being divided, and the followingconditions are fulfilled:
(a) the publication of the statement referred to in article
401(1)( e), provided for pursuant to the registration
required by virtue of article 361(5) shall be effected,for all companies involved in the division, at least onemonth and not more than three months before the datefixed for the general meeting of the company to bedivided which is to decide on the draft terms ofdivision;
(b) at least one month before the date specified in
paragraph ( a) all shareholders of all companies
involved in the division shall be entitled to inspect thedocuments specified in article 365(1) in accordancewith the provisions of that article; and
(c) where a general meeting of the company being
divided, required for the approval of the division, isnot convened, the information provided for by article363(4) covers any material change in the assets andliabilities after the date of preparation of the draftterms of division.
Drawing up of 
detailed written report on draft terms of division by directors.
Amended by:
IV . 2003.137;XIX. 2010.45.363. (1) The directors of each of the companies involved in a
division shall draw up a detailed written report explaining the  draft
terms of division and setting out the legal and economic ground s
for them, in particular the share exchange ratio and the criter ion
determining the allocation of shares. The report shall also des cribe
any special valuation difficulties which have arisen.
(2) Where applicable, the report shall refer to any report
prepared pursuant to article  73(4).
(3) The directors of a company to be divided shall inform the
general meeting of that company of any material change in theassets and liabilities between the date of preparation of the d raft
terms of division and the date of the general meeting of thecompany to be divided which is to be convened to decide on thedraft terms of division.
(4) The directors of a company to be divided shall furthermore
inform the directors of the recipient companies so that thesedirectors can inform the respective general meetings of anymaterial change in the assets and liabilities as specified in s ub-
article (3).
Written report to 
shareholders to be drawn up by one or more experts.
Amended by:
XIX. 2010.46.364. (1) One or more experts acting on behalf of each of the
companies involved in a division but independent of them andapproved by the Registrar, shall examine the draft terms of div ision
and draw up a written report to the shareholders.
(2) The provisions of article 348(2) to (5) shall apply to the
 220        CAP. 386. ]                         COMP ANIES
report.
(3) The report on considerations other than in cash referred to
in article 73(4) and the report on the draft terms of division drawn
up in accordance with sub-article (1) shall be drawn up by theexpert or experts approved under sub-article (1):
Provided that the report on considerations other than in
cash shall not be required if a written report in accordance wi th
sub-article (1) has been drawn up.
Documents which 
shareholders of companies involved in a division are entitled to inspect.
Amended by:
XIX. 2010.47.365. (1) All shareholders of the companies involved in a
division shall be entitled to inspect the following documents a t the
registered office of each company  involved in the division at l east
one month before the date of the general meeting which is to de cide
on the draft terms of division: 
(a) the draft terms of division;
(b) the annual accounts and directors’ reports of the
companies involved in the division for the precedingthree accounting periods;
(c) an accounting statement drawn up as at a date which
shall not be earlier than the first day of the third monthpreceding the date of the draft terms of division, if thelatest annual accounts relate to an accounting periodwhich ended more than six months before that date;
(d) the reports of the directors of the companies involved
in the division provided for in article 363(1); and
(e) the reports provided for in article 364:
Cap. 345.Provided that for the purposes of paragraph ( c), an
accounting statement shall not be required if the companypublishes a half-yearly financial report in accordance with lis ting
rules issued in terms of the 
Financial Markets Act and governing
such reports, and makes it available to shareholders in accorda nce
with this sub-article.
(2) The accounting statement provided for in sub-article (1)( c)
shall be drawn up using the same methods and the same layout asthe latest balance sheet:
   Provided that - 
(a) it shall not be necessary to take a fresh physical
inventory;
(b) the valuations shown in the latest balance sheet shall
be altered only to reflect entries in the accountingrecords; and
(c) the following shall nevertheless be taken into account:
interim depreciation and provisions, and materialchanges in actual values not shown in the accountingrecords.
(3) Every shareholder shall be entitled to obtain, on request an d
free of charge, full or, if so desired, partial copies of the d ocuments
referred to in sub-article (1) and where a shareholder has cons ented
                    COMP ANIES              [CAP. 386.       221
to the use by the company of electronic means for conveying
information, such copies may be provided in such manner.
(4) A company shall be exempt from the requirement to make
the documents referred to in sub-article (1) available at itsregistered office if, for a continuous period beginning at leas t one
month before the day fixed for the general meeting which is todecide on the draft terms of division and ending not earlier th an the
conclusion of that meeting, it makes them available on its webs ite.
(5) Sub-article (3) shall not apply if the website gives
shareholders the possibility, throughout the period referred to  in
sub-article (4), of downloading and printing the documents refe rred
to in sub-article (1).
Non-applicability 
of certain provisions where shareholders involved in a division are in agreement.366.  The provisions of article 363, article 364(1) and (2) and
article 365(1)( c), (d) and (e) shall not apply if all the shareholders
of all the companies involved in a division have so agreed.
Delivery of 
extraordinary resolutions relating to division to Registrar for registration.367.  The extraordinary resolution approving the division
passed by the company to be divided and the extraordinaryresolutions passed by the recipient companies together with theinstruments giving effect to the division, or an authentic copythereof, shall be delivered for registration to the Registrar w ho,
being satisfied that the requirements of the preceding provisio ns of
this Part have been complied with, shall register them.
Rights of creditors 
to oppose division.
Amended by:
IV . 2003.138;L.N. 181 of 2006;L.N. 186 of 2006.368. (1) The division shall not take effect until three months
from the date of the publication of the statement referred to i n
article 401(1)( e) relating to the extraordinary resolutions approving
the division.
(2) During the aforesaid period of three months any creditor of
any of the companies involved in a division whose debt existedprior to the publication of the statement referred to in articl e
401(1)( e), provided for pursuant to the registration required by
virtue of article 361(5) may, by sworn application, object to t he
division, and if he shows good cause why it should not take eff ect,
the court shall either uphold the objection or allow the divisi on on
sufficient security being given.
(3) In so far as a creditor of a company to which the obligation
or liability has been allocated in accordance with the draft te rms of
division has not obtained satisfaction, the recipient companies  shall
be jointly and severally liable for that obligation:
Provided that as regards the recipient companies other than
the one to which the obligation or liability has been allocated , this
liability shall be limited to the net assets allocated to each of those
companies:
Provided further that this sub-article shall not apply where
the operation involving the division is subject to the supervis ion of
the court in accordance with article 375 and a majority in numb er
representing three-fourths in value of the creditors of the com pany
to be divided have agreed to forego such joint and several liab ility
 222        CAP. 386. ]                         COMP ANIES
at a meeting held pursuant to article 375(2)( c).
(4) The provisions of sub-articles (1), (2) and (3) shall apply to
the debenture holders of the companies involved in a division s o
long as the division has not already been approved by the deben ture
holders, individually or by a special meeting of the debentureholders called specifically for the purpose, at which meeting a ll the
debenture holders shall signify their consent.
Protection of 
holders of securities in a division.369.  The holders of securities, other than shares, to which
special rights are attached, shall be given rights in the recip ient
companies against which such securities may be invoked inaccordance with the draft terms of division, at least equivalen t to
the rights they possessed in the company to be divided, unless - 
(a) the holders of those securities individually agree to the
alteration of their rights; or
(b) the alteration has been approved by a meeting of the
holders of those securities called specifically for thepurpose at which meeting all the holders of suchsecurities shall signify their consent; or
(c) the holders of these securities are entitled to have their
securities repurchased.
Duties of Registrar 
in respect of a division.
Amended by:
IV . 2003.139.370. (1) Upon the division becoming effective either through
the lapse of the period referred to in article 368 or, where ob jection
is made under that article, by a decision of the court, the Reg istrar
shall strike the name of the comp any to be divided off the regi ster
and issue a certificate of registration, altered to meet thecircumstances of the case and denoting the fact of the division , for
all the recipient companies, and where a division which has bee n
registered under this Part does not become effective pursuant t o a
decision of the court under article 368, the Registrar shall am end
the registration accordingly.
(2) The Registrar shall, in respect of every company involved
in a division, either proceed to publish a notice of the divisi on after
it has become effective or to publish a notice that the divisio n has
not become effective pursuant to a decision of the court underarticle 368 in both cases as specified in sub-article (1). Thepublication shall be made in accordance with the provisions ofarticle 401(1)( e).
Consequences of 
division.
Amended by:
IV . 2003.140;II. 2004.61.371. (1) A division shall have the following consequences:
(a) the recipient companies shall succeed to all the assets,
rights, liabilities and obligations of the company to bedivided, both as between the company to be dividedand the recipient companies and as regards thirdparties without the requirement of any formalitiesother than those arising under this Part;
(b) the shareholders of the company to be divided shall
become shareholders of one or more of the recipientcompanies; and
(c) the company to be divided shall cease to exist.
                    COMP ANIES              [CAP. 386.       223
(2) No shares in a recipient company shall be exchanged for
shares held in the company to be divided either - 
(a) by that recipient company; or 
(b) by the company to be divided.
(3) The division shall not prejudice the rights enjoyed by the
creditors of the company to be divided over any of the assets o f that
company.
(4) Where the assets of the company to be divided include
immovable property or rights relating thereto, the directors of  the
recipient companies shall cause within one month from the comin g
into force of the division, a declaratory public deed to be pub lished,
containing a detailed description and the allocation of theimmovable property or rights relating thereto delivered to each  of
the recipient companies, and a true copy of the said deed shall  be
lodged with the Registrar within fourteen days from the enrolme nt
thereof at the Public Registry.
Liability of 
director or expert for wilful or negligent misconduct.
Amended by:
IV . 2003.141.372.  Any person who - 
(a) being a director of a company to be divided and who is
responsible for the preparation and the implementationof the division, or
(b) being an expert who is responsible for drawing up on
behalf of the said company the report on the draftterms of the division,
and who, as a consequence of his wilful or negligent misconduct  in
the performance of his duties causes damages to any shareholder  of
the company to be divided, shall be liable for such damages.
Appeal from 
decisions of Registrar.
Amended by:
IV . 2003.142.373.  Any interested party may contest the registration made by
the Registrar, by virtue either of article 361 or of article 36 7 before
the court in accordance with the following conditions:
(a) the contestation shall be made by application against
the Registrar within one month from the publicationfollowing the registration referred to in article 361 onthe grounds that the draft terms of division were notdrawn up in accordance with the provisions of article361, or within three months from the publicationfollowing the registration referred to in article 367 onthe grounds that any of the resolutions of theextraordinary general meetings mentioned therein wasvoid or voidable; notice of the application shall bepublished by the Registrar;
(b) where it is possible to remedy a defect liable to render
a division void or voidable, the court shall grant thecompanies involved a period within which to rectifythe situation;
(c) a notice that the judgment of the court has been
delivered shall be published by the Registrar, whichnotice shall specify whether the application has beenallowed or dismissed;
 224        CAP. 386. ]                         COMP ANIES
(d) a judgment declaring a division void or voidable shall
not of itself affect the validity of obligations owed byor in relation to the recipient companies which arosebefore the judgment was delivered and after the date ofregistration of the draft terms of division referred to in
article 361 or of the resolutions and the otherinstruments referred to in article 367 according to thecase;
(e) each of the recipient companies shall be liable for its
obligations arising after the date on which the divisiontook effect and before the date on which the judgmentdeclaring the division void was delivered;
(f) the company to be divided shall also be liable for the
obligations referred to in paragraph ( e):
        Provided that the extent of this liability shall be
limited to the share of the net assets delivered to therecipient company on whose account such obligationsarose;
(g) the division shall not become operative until the lapse
of the three months referred to in paragraph  (a) or, if
an application is filed, until the date of the finaljudgment, if the application is refused; and
(h) upon the delivery of the judgement the Registrar shall,
where the application is allowed, amend theregistration accordingly as if the division procedurehad never commenced.
Chapter II - Division by the formation of new companies
Application of 
preceding articles of this Part to division by formation of new companies.
Amended by:
IV . 2003.143;II. 2004.63;XX. 2013.93.374. (1) The provisions of articles 361, 362(1) to (5), 363,
364(1) and (2) and articles 365 to 373 shall apply to division by the
formation of new companies, as though references to the compani es
involved in a division were references only to the company to b e
divided.
(2) In addition to the information specified in article 361(2), the
draft terms of division, which in the case of a division by for mation
of new companies shall only be drawn up by the company to bedivided, shall indicate the status, name and registered office of each
of the new companies.
(3) The draft terms of division of the company to be divided
and, if they are contained in a separate document, the draftmemorandum and the draft articles of each of the new companiesshall be approved by an extraordinary resolution taken at a gen eral
meeting of the company to be divided.
(4) ( Deleted by Act XX. 2013.93 ).
(5) Neither article 364 nor article 365, in so far as they relat e to
the expert’s report, shall apply where the shares in each of th e new
companies are allocated to the shareholders of the company to b e
                    COMP ANIES              [CAP. 386.       225
divided in proportion to their holding in the issued share capi tal of
that company.
(6) The Registrar shall, after striking the name of the company
to be divided off the register in accordance with the provision s of
article 370(1), proceed to issue a certificate of registration for each
one of the new companies formed, denoting the fact of itsformation as a result of the division.
Added by:
IV . 2003.145.Chapter III - Division by a combination of a division by 
acquisition with a division by the formation of one or more new  
companies
Division by a 
combination of division by acquisition and division by formation of new companies.
Added by:
IV . 2003.145.
Amended by:
II. 2004.64.374A.  (1) The provisions of articles 361, 362, 363, 364(1) and
(2) and articles 365 to 373 shall apply to division by combinat ion
of a division by acquisition with a division by formation of on e or
more new companies.
(2) In addition to the information specified in article 361(2),
the draft terms of division, shall also indicate the status, na me and
registered office of the new company or companies.
(3) The draft terms of division and, if they are contained in a
separate document, the draft memorandum and the draft articles of
the new company or companies shall be approved by anextraordinary resolution taken at a general meeting of the comp any
to be divided and of each existing recipient company.
(4) Neither article 364 nor article 365, in so far as they relat e to
the written report drawn up by one or more experts shall apply in
respect of new companies where the shares in such companies areallocated to the shareholders of the company to be divided inproportion to their holding in the issued share capital of thatcompany.
(5) The Registrar shall, after striking the name of the company
to be divided off the register in accordance with the provision s of
article 370(1), proceed to issue a certificate of registration for each
one of the new companies formed, denoting the fact of itsformation as a result of the division.
Amended by:
IV . 2003.144.Chapter IV - Division under the supervision of the court
Application to 
court to supervise division and powers of the court in relation thereto.
Amended by:
IV . 2003.146.375. (1) The company to be divided may apply to the court for
it to supervise the division.
(2) The court shall as a result have the power - 
(a) to call a general meeting of the shareholders of the
company to be divided in order to decide upon thedivision by extraordinary resolution;
(b) to ensure that the shareholders of each of the
companies involved in the division have received or
 226        CAP. 386. ]                         COMP ANIES
can obtain at least the documents referred to in article
365 in time to examine them before the date of thegeneral meeting of their company called to decideupon the division:
   Provided that if, by virtue of article 362(6), the
general meeting of any of the recipient companies isnot to be held, the court shall ensure that theshareholders of the recipient companies shall have atleast one month within which to exercise the rightsconferred on them by that article:
   Provided further that the provisions of this
paragraph shall, with regard to division by theformation of new companies, apply only to thecompany being divided;
(c) to call any meeting of creditors of each of the
companies involved in the division in order to decideupon the division;
(d) to ensure that the creditors of each of the companies
involved in the division have received or can obtain atleast the draft terms of division in time to examinethem before the date referred to in paragraph ( b); and
(e) to approve the draft terms of division.
(3) Where the court establishes that the conditions referred to
in sub-article (2)( b) and ( d) have been fulfilled and that no
prejudice would be caused to shareholders or creditors, it may - 
(a) relieve the Registrar from the obligation relating to the
publication of the statement referred to in article401(1)( e) required pursuant to the registration of the
draft terms of division in accordance with article
361(5);
(b) relieve the companies involved in the division from
applying the conditions referred to in article 362(6)( a)
and (b); and
(c) relieve the companies involved in the division from
applying the provisions of article 365, in so far as theyrelate to the period and the manner prescribed for theinspection of the documents referred to therein.
(4) The provisions of article 368(3) shall not apply to a
division under this Chapter where a majority in numberrepresenting three-fourths in value of the creditors of the com pany
to be divided have agreed to forego such joint and several liab ility
as is referred to in article 368(3).
PART X - ASSOCIATION EN PARTICIPATION
Definition. 376.  An association en participation is a contract whereby a
person assigns to another person, for a valuable consideration
                    COMP ANIES              [CAP. 386.       227
contributed by the latter, a portion of the profits and losses of a
business or of one or more commercial transactions.
Consent of 
associates required for admission of other associates.377.  Saving any agreement to the contrary, the associating
party may not have other associates in the same business ortransactions without the consent of his associates.
Relations of parties 
vis-à-vis third 
parties and among themselves.378. (1) In regard to third parties the ownership of, or other
rights over, a thing contributed by an associate shall vest in the
associating party.
(2) In the relations of the parties among themselves, saving any
agreement that a thing contributed is to be restored in kind, t he
associate shall, on the termination of the association, be enti tled to
the reimbursement of the value of his contribution.
Only associating 
party acquires rights and assumes obligations.379.  A third party shall acquire rights and assume obligations
against and in favour only of the associating party.
Rights of 
associating party and of associates.380.  The management of the business or of the transactions in
respect of which the association was formed shall vest only in the
associating party:
Provided that the associate may, where it is so agreed and to
the extent agreed, supervise such business or transactions:
Provided further that the associate shall, in all cases, be
entitled to an account of any transaction that is completed and ,
where the association lasts for more than one year, to an annua l
account of the management of the business or transactions inrespect of which the association was formed.
Liability of 
associate.381.  Unless otherwise agreed, the associate shall bear the
losses in the same proportion in which he partakes in the profi ts,
and his liability shall be limited to his contribution.
Agreements 
allowed between parties.382.  Saving the provisions of the preceding articles of this Part,
an association en participation  may be formed in such manner, in
such proportions of interests and upon such conditions as may b e
agreed upon by the parties.
Formalities 
required for association en 
participation .383.  An association en participation  shall be constituted by an
instrument in writing although any such association so constitu ted
shall not be subject to any other formalities prescribed in reg ard to
partnerships and it shall not have a legal personality distinct  from
that of its members.
 228        CAP. 386. ]                         COMP ANIES
PART XI - BODIES CORPORATE CONSTITUTED OUTSIDE 
MALTA
Amended by:
IV . 2003.147.Chapter I - Provisions as to establishment of branch
or place of business in Malta
Application of 
articles 385 to 389.
Amended by:
IV . 2003.147.Substituted by:XXXVI.2018.120.384.  Articles 385 to 389 shall apply to all companies, commercial
partnerships, as well as other legal organisations enjoying leg al
personality which have characteristics similar to companies andcommercial partnerships constituted or incorporated outside Mal ta
(hereinafter in this Chapter and in Chapter III of this Part re ferred to as
"oversea companies") which establish a branch or place of busin ess
within Malta.
Documents, etc., to 
be delivered by oversea companies carrying on business in Malta.
Amended by:
IV . 2003.147, 148.385. (1) Oversea companies which, on or after the appointed
day, establish a branch or place of business within Malta shall ,
within one month of the establishment of the place of business,deliver to the Registrar for registration - 
(a) an authentic copy of the charter, statutes or
memorandum and articles of the oversea company orother instrument constituting or defining theconstitution of the oversea company, and, if theinstrument is not written in the English or Malteselanguage, a translation thereof into either of suchlanguages, certified to be a correct translation in suchmanner as may be prescribed;
(b) a list of the directors and company secretary, if any, or
of the persons vested with the administration of theoversea company, where that company does not havedirectors or a company secretary, and, in all cases, alist of the persons vested with the representation of theoversea company. Such lists shall include thefollowing particulars:
(i) in the case of an individual, his name, his usual
residential address, his nationality and hisbusiness occupation; and
(ii) in the case of a body corporate, its registered or
corporate name and registered or principaloffice;
(c) a return containing the following particulars:
(i) the name under which the branch or place of
business is carrying on its activities wheredifferent from the name of the oversea company;
(ii) the address of the branch or place of business
established in Malta by the oversea company,and where more than one branch or place ofbusiness has been established, there shall beindicated the address of the principal branch orplace of business;
(iii) the activities to be carried out by the branch or
place of business established in Malta;
(iv) the names and addresses of one or more
                    COMP ANIES              [CAP. 386.       229
individuals resident in Malta authorised to
represent the oversea company for the activitiesof the branch or place of business established inMalta; and
(v) the extent of the authority of any individual
falling within sub-paragraph (iv), includingwhether that individual is authorised to act aloneor jointly with others, and in the latter case, thename of any person with whom he is authorisedto act;
(d) unless disclosed by the document specified in
paragraph ( a), a return containing the following
particulars about the oversea company:
(i) the legal form of the oversea company; and
(ii) the identity of the register in which the oversea
company is registered and the number withwhich it is so registered.
(2) Oversea companies constituted or incorporated outside
Malta which, before the appointed day, have been duly registere d
with the Registrar in accordance with the provisions of Part VI II of
the Ordinance, shall be deemed to be registered in accordance w ith
the provisions of this Part:
Provided that oversea companies which have, before the
appointed day, established a branch or place of business withinMalta and continue to have an established branch or place ofbusiness within Malta on the appointed day, shall comply with t he
provisions of this Part and in particular shall deliver to theRegistrar for registration the documents and particulars specif ied
under sub-article (1)( a), (b) and ( c) within six months of the
appointed day, unless they have already registered such documen ts
and particulars under the Ordinance.
Return to be 
delivered by oversea company where documents, etc., altered.
Amended by:
IV . 2003.149.386.  If any alteration is made in - 
(a) the charter, statutes or memorandum and articles of an
oversea company or any such instrument as aforesaid;or
(b) the directors or company secretary or the persons
vested with the administration or the representation ofan oversea company, or in the particulars specifiedunder article 385(1)( b); or
(c) the names or addresses of the individuals authorised to
represent an oversea company for the activities of thebranch or place of business established in Malta,
the company shall, within one month of any such alteration, del iver
to the Registrar for registration a return containing the parti culars
of the alteration, signed by a director, the company secretary or
other authorised officer of the company.
 230        CAP. 386. ]                         COMP ANIES
Accounts of 
oversea company.
Amended by:
XV . 2007.12;XXXI. 2015.21.387. (1) Every oversea company shall, within within twelve
months from the end of every accounting period, make out anddeliver to the Registrar for registration a balance sheet, a pr ofit and
loss account and the notes to the accounts in such form, andcontaining such particulars and including such documents as, un der
the provisions of this Act, the directors would, if the company  had
been a company formed and regis tered under this Act, be require d
to make out and lay before the company in general meeting:
Provided that the Registrar may accept for registration a
balance sheet, profit and loss account and the notes to the acc ounts
prepared in the form required under the law of the place of thecompany’s constitution or incorporation if, in his opinion, or if as
prescribed, such accounts give substantially the same informati on
as, or greater information than, that required to be given in t he
accounts referred to in article 167.
(2) Notwithstanding that the balance sheet, profit and loss
account and the notes to the accounts prepared in the form requ ired
under the law of the place of the company’s constitution orincorporation do not give substantially as much information as that
required in the accounts referred to in article 167, the Regist rar
may, in his absolute discretion, nevertheless agree to accept s uch
accounts for registration in compliance with sub-article (1); b ut in
that event, subject as provided by sub-article (4), the company  shall
also deliver to the Registrar for registration -
(a) a profit and loss account made out as nearly as may be
in the form and containing the particulars required bythe provisions of Chapter X of Title I of Part V andgenerally accepted accounting principles and practicegoverning the profit and loss account of companiesformed and registered in Malta and giving a true andfair view of the profit and loss, during the period towhich it relates, on the company’s operations in Maltaas if such operations had been conducted by a separate
company formed and registered in Malta under this
Act;
(b) a statement, as at the end of the period to which the
profit and loss account referred to in paragraph  (a)
relates, showing the company’s assets locally situatedin Malta classified, distinguished and valued inaccordance with the provisions governing the accountsof companies formed and registered in Maltacontained in Chapter X of Title I of Part V andgenerally accepted accounting principles and practice,and the nature and amount of the specific charges onsuch assets; and
(c) the notes to the accounts giving additional information
to that given in the profit and loss account and in thebalance sheet referred to in paragraphs ( a) and ( b)
relating to the company’s operations in Malta and theassets locally situated in Malta, drawn up inaccordance with the provisions of Chapter X of Title Iof Part V and generally accepted accounting principles
                    COMP ANIES              [CAP. 386.       231
and practice governing the notes to the accounts of
companies formed and registered in Malta; and
(d) a report on the account and statement referred to in the
foregoing paragraphs of this sub-article by an auditorqualified in accordance with article 153 stating that inhis opinion and to the best of his information theaccounts and statements are in accordance with theaccounting records of the company and give theinformation required by this Act in the manner thereinrequired and give a true and fair view of the matterstherein stated:
Provided that the provisions of this sub-article shall not
apply to any company which has at any time made in Malta anyinvitation to the public to acquire any of its shares or debent ures or
to deposit money with it.
(3) In the profit and loss account referred to in sub-article
(2)(a), the company may make such apportionments and add such
explanations as shall, in its opinion, be necessary or desirabl e in
order to give a true and fair view of the profit or loss of itsoperations in Malta and for this purpose may debit a reasonable  rate
of interest on capital employed in Malta.
(4) Notwithstanding that the Registrar agrees to accept a
balance sheet, profit and loss account and the notes to the acc ounts
under sub-article (2) he may waive compliance with paragraphs ( a),
(b), (c) and ( d) of that sub-article or any of such paragraphs if
satisfied that compliance therewith is impracticable having reg ard
to the nature of the company’s operations in Malta.
(5) If any such document as is mentioned in sub-articles (1) to
(4) is not written in the Maltese or English language there sha ll be
annexed to it a translation thereof into either of such languag es,
certified to be a correct translation in such manner as may beprescribed.
Other obligations 
of oversea company.388.  Every oversea company shall in every prospectus inviting
subscriptions for its shares or debentures in Malta state the c ountry
in which the company is constituted or incorporated.
Penalties. 389.  If an oversea company fails to comply with any of the
foregoing provisions of this Part, any officer or agent of thecompany who is in default shall be liable to a penalty, and, in  the
case of a continuing default, to a further penalty for every da y
during which the default continues.
Amended by:
L.N. 391 of 2005.Chapter II - Issues by companies constituted or incorporated or  
to be constituted or incorporated outside Malta
in a non-Member State or non-EEA State
Application of 
articles 391 to 399.
Amended by:
IV . 2003.150;L.N. 391 of 2005.390. (1) The provisions of articles 391 to 399 shall apply to
companies constituted or incorporated or to be constituted orincorporated outside Malta in a non-Member State or non-EEAState:
 232        CAP. 386. ]                         COMP ANIES
Cap. 370.Provided that the said provisions shall not apply to a
prospectus issued by a holder of a collective investment schemelicence within the meaning of the 
Investment Services Act and
provided further that the issue of such a prospectus complies w ith
the rules and regulations made under that Act.
(2) In this Chapter the term "expert" includes engineer, valuer,
accountant and any other person whose profession gives authorit y
to a statement made by him.
Prospectus of 
oversea company.
Amended by:
IV . 2003.147, 151;L.N. 391 of 2005;IX. 2008.36.391. (1) It shall not be lawful for a person to issue, circulate or
distribute in Malta any prospectus offering for subscription sh ares
in or debentures of a company constituted or incorporated or to  be
constituted or incorporated outside Malta in a non-Member State  or
non-EEA State, whether the company has or has not established, or
when formed will or will not establish, a branch or place ofbusiness in Malta, unless the prospectus complies with therequirements of sub-articles (2) and (3).
(2) The prospectus shall be dated and shall contain particulars
with respect to the following matters:
(a) the instrument constituting or defining the constitution
of the company;
(b) the enactments, or provisions having the force of an
enactment, by or under which the constitution orincorporation of the company was effected;
(c) an address in Malta where that instrument, and those
enactments or provisions, or copies of them, and, ifthey are not in the Maltese or English language, atranslation thereof into either of such languages,certified to be a correct translation in such manner asmay be prescribed, can be inspected;
(d) the date on which, and the country in which, the
company was constituted or incorporated; and
(e) whether the company has established a place of
business in Malta and, if so, the address of that placewhere the business is principally carried out in Malta.
(3) Subject to the following provisions of this article, the
prospectus shall comply - 
(a) with Part I of Part B of the Second Schedule, as
respects the matters to be specified in the prospectus;and
(b) with Part II of Part B of that Schedule as respects the
reports to be set out.
(4) Sub-article (2)( a) to (c) shall not apply in the case of a
prospectus issued more than two years after the company is enti tled
to commence business, and, in the application of Part I of Part  B of
the Second Schedule for the purposes of this sub-article, refer ences
to the articles of a company shall be interpreted as references  to the
constitution or incorporation of the company.
(5) It shall not be lawful for a person to issue to any person i n
                    COMP ANIES              [CAP. 386.       233
Malta a form of application for shares in or debentures of such  a
company or intended company as is mentioned in sub-article (1)unless the form is issued with a prospectus which complies withthis Chapter and the issue of which in Malta does not contraven e
the provisions of articles 393 and 394:
Provided that this sub-article shall not apply if it is shown
that the form of application was issued in connection with a bona
fide invitation to a person to enter into an underwriting agreement
with respect to the shares or debentures.
(6) The provisions of this article - 
(a) shall not apply to the issue to a company’s existing
members or debenture holders of a prospectus or formof application relating to shares in or debentures of thecompany, whether an applicant for shares ordebentures will or will not have the right to renouncein favour of other persons; and
(b) except in so far as it requires a prospectus to be dated,
shall not apply to the issue of a prospectus relating toshares or debentures which are or are to be in allrespects uniform with shares or debentures previouslyissued and for the time being listed on a regulatedmarket or on any equivalent market in a non-MemberState or non-EEA State; but subject as aforesaid theprovisions of this article shall apply to a prospectus orform of application whether issued on or withreference to the formation of a company orsubsequently.
Attempted evasion 
of article 391 to be void.
Amended by:
L.N. 391 of 2005.392.  A condition requiring or binding an applicant for shares or
debentures to waive compliance with any requirement imposed - 
(a) by article 391(2), as regards the particulars to be
contained in the prospectus; or
(b) by article 391(3), as regards compliance with Part B of
the Second Schedule,
or purporting to affect an applicant with notice of any contrac t,
document or matter not specifically referred to in the prospect us,
shall be void.
Prospectus 
containing statement by expert.
Amended by:
IV . 2003.147;L.N. 391 of 2005. 393. (1) The provisions of this article shall apply in the case of
a prospectus offering for subscription shares in or debentures of a
company constituted or incorporated or to be constituted orincorporated outside Malta in a non-Member State or non-EEAState, whether it has or has not established, or when formed wi ll or
will not establish, a branch or place of business in Malta, if the
prospectus includes a statement purporting to be made by an exp ert.
(2) It shall not be lawful for any person to issue, circulate or
distribute in Malta such a prospectus if - 
(a) the expert has not given, or has before delivery of the
prospectus for registration withdrawn, his writtenconsent to the issue of the prospectus with the
 234        CAP. 386. ]                         COMP ANIES
statement included in the form and context in which it
is included; or
(b) there does not appear in the prospectus a statement that
he has given and has not withdrawn his consent asabove mentioned. 
(3) For the purposes of this article, a statement shall be deeme d
to be included in a prospectus if it is contained in it, or in any
report or memorandum appearing on its face, or by referenceincorporated in, or issued with, the prospectus.
Restrictions on 
allotment to be secured in prospectus.
Amended by:
IV . 2003.147;L.N. 391 of 2005.394. (1) It shall not be lawful for a person to issue, circulate or
distribute in Malta a prospectus offering for subscription shar es in
or debentures of a company constituted or incorporated or to beconstituted or incorporated outside Malta in a non-Member State  or
non-EEA State, whether the company has or has not established, or
when formed will or will not establish, a branch or place ofbusiness in Malta unless the prospectus complies with the condi tion
set out in sub-article (2).
(2) The prospectus shall have the effect, where an application
is made in pursuance of it, of rendering all persons concernedbound by all the provisions of articles 99, 101 and 102 so far as
applicable.
Certificate 
exempting from compliance with Part B of the Second Schedule.
Amended by:
IV . 2003.147, 152;L.N. 391 of 2005;IX. 2008.37.395. (1) The provisions of this article shall apply where -
(a) it is proposed to offer to the public by a prospectus any
shares in or debentures of a company constituted orincorporated or to be constituted or incorporatedoutside Malta in a non-Member State or non-EEAState, whether the company has or has not established,or when formed will or will not establish, a branch orplace of business in Malta; and
(b) application is made to the Listing Authority for the
admissibility to listing of its shares or debentures on aMaltese regulated market.
(2) There may, on the applicant’s request, be given by or on
behalf of the Listing Authority a certificate that compliance w ith
Part B of the Second Schedule would be unduly burdensome,having regard to the proposals, as stated in the request, as to  the
size and other circumstances of the issue of shares or debentur es
and as to any limitation on the number and class of persons towhom the offer is to be made.
(3) If a certificate is given under sub-article (2), and if the
proposals above mentioned are adhered to and the particulars an d
information required to be published in connection with theapplication for admissibility to listing on a Maltese regulatedmarket are so published - 
(a) a prospectus giving the particulars and information in
the form in which they are so required to be publishedshall be deemed to comply with Part B of the SecondSchedule; and
                    COMP ANIES              [CAP. 386.       235
(b) except as respects the requirement for the prospectus
to be dated, article 391 shall not apply to any issue,after the permission applied for is given, of aprospectus or form of application relating to the sharesor debentures.
Registration of 
oversea prospectus before issue.
Amended by:
IV . 2003.147, 153;L.N. 391 of 2005;IX, 2008.38.396. (1) It shall not be lawful for a person to issue, circulate or
distribute in Malta a prospectus offering for subscription shar es in
or debentures of a company constituted or incorporated or to beconstituted or incorporated outside Malta in a non-Member State  or
non-EEA State, whether the company has or has not established, or
when formed will or will not establish, a branch or place ofbusiness in Malta, unless before the issue, circulation ordistribution the requirements of this article have been complie d
with.
(2) A copy of the prospectus, certified by two directors, or
persons holding or occupying equivalent posts, of the company a s
having been approved by resolution of the board of directors orequivalent body, shall have been delivered for registration to the
Registrar.
(3) The prospectus shall state on the face of it that a copy has
been so delivered to the Registrar and the following shall beendorsed or attached to that copy of the prospectus - 
(a) any consent to the issue of the prospectus which is
required by article 393;
(b) a copy of any contract required by paragraph 23 of
Part B of the Second Schedule to be stated in theprospectus or, in the case of a contract not reduced intowriting, a memorandum giving full particulars of it.
(4) Where, in the case of a prospectus deemed by virtue of a
certificate under article 395 to comply with Part B of the Seco nd
Schedule, a contract or a copy of it, or a memorandum of acontract, is required to be available for inspection in connect ion
with an application under that article to a Maltese regulated m arket,
a copy or, as the case may be, a memorandum of the contract sha ll
be endorsed on or attached to the copy of the prospectus delive red
to the Registrar for registration.
(5) References in sub-article (3)( b) and in sub-article (4) to the
copy of a contract shall be, in the case of a contract wholly o r partly
in a foreign language, to a copy of a translation of the contra ct into
Maltese or English, or a copy embodying a translation into Malt ese
or English of the parts in a foreign language, as the case may be,
and - 
(a) the translation shall in either case be certified to be a
correct translation in such manner as may beprescribed; and
(b) the reference in sub-article (4) to a copy of a contract
required to be available for inspection includes a copyof a translation of it or a copy embodying a translationof parts of it, certified as aforesaid.
 236        CAP. 386. ]                         COMP ANIES
Consequences of 
non-compliance with articles 391 to 396.
Amended by:
IV . 2003.147;L.N. 391 of 2005.397. (1) A person who is knowingly responsible for the issue,
circulation or distribution of a prospectus, or for the issue o f a form
of application for shares or debentures, in contravention of an y of
the provisions of articles 391 to 396 shall be liable to a pena lty.
(2) The provisions of article 94 shall extend to every
prospectus offering for subscription shares in or debentures of  a
company constituted or incorporated or to be constituted orincorporated outside Malta in a non-Member State or non-EEAState, whether the company has or has not established, or whenformed will or will not establish, a branch or place of busines s in
Malta, substituting for any reference to article 92 a reference  to
article 393.
(3) In the event of non-compliance with or contravention of
any of the requirements of article 391(2) as regards the partic ulars
to be contained in the prospectus, or article 391(3) as regardscompliance with Part B of the Second Schedule, a director or ot her
person responsible for the prospectus shall incur no liability by
reason of the non-compliance or contravention if - 
(a) as regards any matter not disclosed, he proves that he
was not cognisant of it; or
(b) he proves that the non-compliance or contravention
arose from an honest mistake of fact on his part; or
(c) the non-compliance or contravention was in respect of
matters which, in the opinion of the court, wereimmaterial or were otherwise such as ought, in theopinion of the court, having regard to all thecircumstances of the case, reasonably to be excused.
(4) In the event of failure to include in a prospectus to which
this Part applies a statement with respect to the matters conta ined in
paragraph 24 of Part B of the Second Schedule, no director or o ther
person shall incur any liability i n respect of the failure unle ss it is
proved that he had knowledge of the matters not disclosed.
(5) Nothing contained in articles 391 or 392 or in this article,
shall limit or diminish any liability which a person may incur under
this Act or under any other law in force in Malta apart from th ose
provisions.
Supplementary.
Amended by:
L.N. 391 of 2005.398. (1) Where a document by which the shares or debentures
of a company constituted or incorporated outside Malta in a non -
Member State or non-EEA State are offered for sale to the publi c
would, if the company had been a company formed and registeredunder this Act, have been deemed by virtue of article 95 to be a
prospectus issued by the company, that document shall be deemed ,
for the purposes of this Part a prospectus so issued.
(2) An offer of shares or debentures for subscription or sale to  a
person whose ordinary business it is to buy or sell shares ordebentures, whether as principal or agent, shall not be deemed an
offer to the public for those purposes.
(3) In this Part "shares" and "debentures" have the same
meaning as when these expressions are used, elsewhere in this A ct,
                    COMP ANIES              [CAP. 386.       237
in relation to a company formed and registered under this Act.
Chapter III - Provisions as to the winding up of the affairs in  
Malta of an oversea company
Affairs in Malta of 
an oversea company may be wound up by the court.399. (1) The court may wind up the affairs in Malta of an
oversea company constituted or incorporated outside Malta in an y
of the cases mentioned in article 214 in which it may dissolve and
wind up a company formed and registered in Malta.
(2) The court may exercise its power under sub-article (1)
irrespective of whether the oversea company is being or has bee n
wound up or has otherwise been dissolved or ceased to exist as a
company under the law of its constitution or incorporation.
(3) For the purposes of this article, every person, who is liabl e
to pay or contribute to the payment of any debt or liability of  the
oversea company, or to pay or contribute to the payment of any sum
for the adjustment of the rights of members among themselves, o r
to pay or contribute to the payment of the expenses of the wind ing
up of the company, shall be deemed to be a contributory.
(4) Every contributory shall be liable to contribute to the
oversea company’s assets all sums due from him in respect of su ch
liability as is mentioned in sub-article (3).
(5) Subject to the provisions of sub-articles (1) to (4), the
winding up of the oversea company’s affairs in Malta shall becarried out by applying the provisions of Title II of Part V of  this
Act, with such modifications as are necessary to accommodate th e
fact that the oversea company, the affairs of which are being w ound
up, is a company constituted or incorporated outside Malta.
Closure by oversea 
company of its branch or place of business in Malta.
Added by:
IV . 2003.154.399A.  (1) ( a) An oversea company shall within one month of
the closure of its branch or place of business in Maltadeliver a notice to the Registrar for registrationnotifying him of such closure.
(b) Where an oversea company, constituted or
incorporated outside Malta, which has established abranch or place of business within Malta, has beendissolved or for any other reason is being wound up, itshall, within one month from the date of thedissolution or the date on which the winding-upbegins, deliver to the Registrar for registration a returnin the prescribed form containing the followingparticulars:
(i) a brief description of the winding-up or other
proceedings to which the oversea company hasbecome subject to, specifying whether suchproceedings amount to insolvency proceedings,or an arrangement or composition, or anyanalogous proceedings;
(ii) whether the oversea company has been dissolved
 238        CAP. 386. ]                         COMP ANIES
or is being wound up by an order of a court;
(iii) if the company is not being so dissolved or
wound up, as a result of what action thedissolution or winding-up has commenced;
(iv) whether the dissolution or winding up has been
instigated by:
(a) the oversea company’s members;
(b) the oversea company’s creditors; or
(c) some other person or persons; and
(v) the date on which the dissolution or winding-up
became or will become effective.
(c) If an oversea company fails to comply with the
provisions of this sub-article, the liquidator or anyofficer or agent of the company, as the case may be,who is in default shall be liable to a penalty and, in thecase of a continuing default, to a further penalty forevery day during which the default continues.
(2) ( a) A person appointed to be the liquidator of the oversea
company shall, within one month from the date of hisappointment, deliver to the Registrar for registration areturn in the prescribed form containing the followingparticulars:
(i) his name, his residential address and his
business or professional occupation;
(ii) the date of his appointment; and
(iii) a description of his powers together with an
explanation of the extent to which these powersare derived otherwise than from the general lawor the company’s constitution.
(b) The liquidator of the oversea company shall, within
one month from the termination of the winding up ofthe oversea company, deliver to the Registrar forregistration, a return in the prescribed form notifyinghim of such termination.
(c) If the liquidator fails to comply with any of the
requirements of paragraphs ( a) and ( b) he shall be
liable to a penalty and, for every day during which thedefault continues, to a further penalty.
PART XII - GENERAL
Power of Minister 
to appoint Registrar.
Amended by:
XIX. 2010.48;XX. 2013.94;V .2020.36.400. (1) The Minister shall appoint a senior official of the
Agency to be Registrar of Companies and other Commercial
Partnerships, who shall be designated "Registrar of Companies",and may appoint persons to assist such Registrar, conferring on  any
such persons all or any of the powers of the Registrar under th is
Act or any other law.
                    COMP ANIES              [CAP. 386.       239
(2) Without prejudice to the provisions of sub-article (1), the
Registrar may authorise in writing any person serving with theoffice of the Registrar to perform any of the functions assigne d to
the Registrar under this Act or any other law.
Additional duties 
of Registrar.
Amended by:
IV . 2003.155;XIII. 2004.103;XV . 2007.13;IX. 2008.39;XXII. 2014.21;XLVII.2020.8.401. (1) In addition to the other duties prescribed by this Act,
it shall be the duty of the Registrar - 
(a) to ensure compliance with any provision of this Act
requiring an act to be done or to be omitted to be donewhether under a penalty or not; and to consult theofficial receiver where such action relates to mattersfalling within Title II of Part V of this Act;
(b) to recover penalties due under this Act in accordance
with the provisions of sub-articles (3) to (17);
(c) to exercise any powers of investigation conferred upon
him by this Act;
Cap. 426.(d) (i) to retain and register any document which is
required to be delivered or given to or served onhim for registration under any of the provisionsof this Act and any such delivery, submission orservice to the Registrar and the retention andregistration of any document by the Registrar,may be carried out in such manner and by suchmeans and in such format, including electroniccommunication within the meaning of the
Electronic Commerce Act, as the Registrar may
deem appropriate:
Provided that any such document shall be drawn
up in any one of the official languages of Malta;
(ii) to retain, in addition to any document which is
required to be delivered or given to or served onhim as indicated in sub-paragraph (i), atranslation of any such document which mayvoluntarily be delivered or given to or served onhim, and provided it is a certified translation intoone of the official languages of the Community.
In case of conflict between any document
delivered in accordance with the provisions ofsub-paragraph (i) and any translation deliveredvoluntarily in accordance with this sub-paragraph, the translation may not be reliedupon against third parties. Third parties maynevertheless rely on the translation voluntarilydelivered, unless the company proves that thethird parties had knowledge of the version whichwas required to be delivered or submitted orserved to the Registrar;
(e) where under any of the provisions of this Act - 
(i) any document is required to be delivered or
given to or served on him for registration; or
(ii) any certificate is issued by him on the
 240        CAP. 386. ]                         COMP ANIES
registration or change of name or conversion or
amalgamation or division of a commercialpartnership, or the name of a commercialpartnership is struck off the register,
to cause without delay, normally within twenty one
days from receipt of the complete documentationincluding any legality checks as may be required forentry in the register, a statement to be published in theGazette or on a website maintained by the Registrarshowing the date at which the registration, delivery orservice was made, or at which the certificate wasissued or at which the name of the commercialpartnership was struck off the register, and the generalnature of the document or certificate, and giving suchparticulars as are necessary to distinguish thecommercial partnership to which the statement related:
Provided that the twenty one day period referred to in
this sub-paragraph shall not apply to annual accountsdelivered to the Registrar for registration inaccordance with this Act:
Provided further that the Registrar shall additionally
be required to publish without delay in a dailynewspaper circulating wholly or mainly in Malta anotice showing substantially the same informationcontained in the statement published in the Gazette oron a website maintained by the Registrar, consequentto the registration referred to in the following articlesof this Act:
   Sub-article (2 ) of article  19; 
   Sub-article (1) of article 36;    Sub-article (3 ) of article  88;
   Sub-article (6 ) of article  88; 
   Sub-article (8 ) of article  88; 
   Sub-article (1) of article 224;    Sub-article (1) of article 265;    Sub-article (5 ) of article  320; 
   Sub-article (1) of article 331;    Sub-article (1) of article 338;    Article 350;   Paragraph ( a) of sub-article (3 ) of article  358; 
   Paragraph  (a) of sub-article (1) of article 359; 
   Article 367; and   Sub-article (4 ) of article  428.
   In the event of any reduction, dissolution or
assignment as are referred to in article 21, or of anyreduction referred to in article 83, the Registrar shallproceed with the publication of a statement in the
                    COMP ANIES              [CAP. 386.       241
Gazette or on a website maintained by the Registrar
and in a daily newspaper in accordance with therequirements of this paragraph.
   The publication of the notice referred to in this
proviso shall be subject to the following provisions:
(i) The publication of the notice shall be made by
the Registrar at the expense of the commercialpartnership concerned, with the exception of thepublication of a disqualification order made inaccordance with article 320, in which case thepublication shall be made at the expense of theperson disqualified;
(ii) A commercial partnership, liable for the expense
of the publication of a notice in accordance withthis proviso, shall effect payment without delay,and in the event that such commercialpartnership is or has been dissolved, theRegistrar shall, in regard to the said expense,enjoy the same preferential ranking as expensesproperly incurred by a liquidator in accordancewith this Act;
(iii) The expense incurred by the Registrar in
publishing a notice pursuant to this proviso shallbe notified in writing to the commercialpartnership or person liable for the expense inaccordance with this proviso. Such notificationshall be deemed equivalent to a notice given interms of sub-article (3), and the expense incurredby the Registrar shall, in so far as applicable, beconsidered equivalent to a penalty referred to inthe same sub-article. The provisions of sub-articles (3) to (17) shall mutatis mutandis  apply
to such expense;
(f) to supply copies or certified copies of documents
registered pursuant to this article against payment ofthe prescribed fee to any person who requests themand such copies may also be supplied by electronicmeans;
(g) to deliver to the Director of the Public Registry for
registration at the Public Registry Office a noticecontaining the particulars of any conversion,amalgamation or division which has taken effect inaccordance with Parts VII, VIII and IX respectively ofthis Act, or of the striking off of the name of acompany, under the provisions of article 325. Suchnotice shall show substantially the same particulars asthe statement published in the Gazette or on a websitemaintained by the Registrar pursuant to the proviso toparagraph ( e); and it shall be the duty of the Director
of the Public Registry to register the notice or a notethereof in like manner as notes of reference, in so faras applicable, as the Director may consider
 242        CAP. 386. ]                         COMP ANIES
appropriate;
(h) when processing personal data to do so in accordance
with Directive 95/46/EC  of the European Parliament
and of the Council of 24th October 1995 on theprotection of individuals with regard to the processingof personal data and on the free movement of such
data;
(i) to exercise the functions of Registrar for other legal
persons as listed and specified in the Second Schedule ofthe Civil Code and the subsidiary legislation made asauthorised by the said Second Schedule.
(2) Any document, certificate, or other particular required to b e
delivered, given to or served on the Registrar for registration  may
be relied on by the commercial partnership as against third par ties
only after it has been duly published in accordance with sub-ar ticle
(1)(e), unless the commercial partnership proves that third parties
had knowledge thereof in which case the commercial partnershipmay rely on any such document, certificate or other particularnotwithstanding that it has not yet been so published. Anytransactions taking place before the sixteenth day following th e
publication of any such document, certificate or other particul ar
shall not be relied on as against third parties who prove that it was
not possible for them to have had knowledge thereof:
Provided that at any time third parties may always rely on
any such document, certificate or other particular, even if thepublication formalities in relation thereto have not at that ti me been
complied with:
Provided further that where this Act requires that any
provision shall not take effect until the lapse of a particular  period,
the provisions of this sub-article shall only come into effect on the
lapse of the later period.
The Registrar shall make available on a website maintained
by him up to date information explaining the provisions of thisarticle according to which third p arties can rely on documents and
particulars which are registered in terms of any of the provisi ons of
this Act, or any other Act requiring such registration. Suchinformation shall also be made available by the Registrar on th e
European e-Justice portal in accordance with the portal’s rules  and
technical requirements as stipulated in Article 3a(2) of 
Directive
2009/101/EC .
(3) Where the Registrar gives notice in writing to any person
that such person has become liable to a penalty under this Actspecifying the nature of the infringement, and indicating an am ount
as due by way of penalty in respect of such infringement, theperson to whom the notice is given shall, without prejudice to the
provisions of sub-articles (4) to (17), be deemed to have incur red a
penalty under this Act, and the amount indicated as aforesaid a s
due by way of penalty including any penalty due for each dayduring which the default continues shall be deemed to be thepenalty due under this Act in respect of the infringement speci fied
in the notice.
                    COMP ANIES              [CAP. 386.       243
Cap. 12.(4) A notice as is referred to in sub-article (3) shall, upon th e
service of a copy thereof by means of a judicif329al act on theperson indicated in the notice, constitute an executive title f or all
effects and purposes of Title VII of Part I of Book Second of t he
Code of Organization and Civil Procedure  unless such person shall
within thirty days from the date of such service instituteproceedings before the court objecting to the penalty so fixed.
(5) Where any person desires to institute proceedings objecting
to a penalty referred to in sub-article (3), such proceedings s hall be
instituted by application against the Registrar.
(6) The application shall, under pain of nullity, state clearly
and concisely the nature of the complaint, the facts out of whi ch the
complaint arises, the reasons why such complaint should be uphe ld,
and the claim that the penalty is not due at law or is due at l aw only
in a smaller amount.
(7) The court shall not annul or reduce a penalty as aforesaid
unless such penalty cannot at law be imposed in the circumstanc es
of the case, or cannot at law be fixed in the amount fixed by t he
Registrar.
(8) The applicant shall attach to the application all such
documents in support of his claim as it may be in his power toproduce, and shall indicate in his application the names of allwitnesses he intends to produce stating, in respect of each, th e
proof which he intends to make.
(9) The court shall, without delay, set down the application for
hearing at an early date, which date shall in no case be later than
thirty days from the date of the filing of the application.
(10) The application, and the notice of the date fixed for
hearing, shall be served on the Registrar without delay, and th e said
Registrar shall file his reply thereto within fourteen days aft er the
date of the service of the application.
(11) The Registrar shall, in his reply, state clearly and concis ely
whether he agrees to the facts set out in the application, and the
reasons why he objects to the claim; he shall moreover state in  his
reply the names of the witnesses in support of his reasons and shall
attach thereto all the documents in support thereof.
(12) On the day fixed for the hearing of the application, the
court shall consider only the issues of fact and of law as areascertainable from the application, reply or documents filed, b y
either of the parties, or from the evidence indicated by either  of the
parties in the application or reply, as the case may be, or fro m the
oral pleading of either of the parties.
(13) The court shall hear the application to a conclusion within
five working days from the date fixed for the original hearing of the
application, and no adjournment shall be granted except either with
the consent of both parties, or for an exceptional reason to berecorded by the court, and such adjourned date shall not be lat er
than that justified by any such reason.
Cap. 12.(14) Saving the preceding provisions of this article, the
 244        CAP. 386. ]                         COMP ANIES
provisions of the Code of Organization and Civil Procedure
relating to proceedings before the First Hall of the Civil Cour t shall
apply in relation to any such application.
Cap. 12. (15) Notwithstanding the provisions of article 256(2) of the Code
of Organization and Civil Procedure, the executive title referr ed to
in sub-article (4) shall not be enforceable before the lapse of  thirty
days from the service of the judicial act therein referred to.
(16) The decision of the court upon an application referred to i n
sub-article (5), confirming the imposition of a penalty fixed b y the
Registrar or reducing any such penalty, shall upon becoming  res
judicata be deemed to be a judgment of the court ordering the
payment by the applicant of the penalty as confirmed or reduced .
(17) An appeal from a decision of the court upon an application
referred to in sub-article (5), shall be made by means of anapplication to the Court of Appeal to be filed within six worki ng
days of the date of the decision; the person against whom theappeal is entered shall within six working days from the servic e
upon him of the application file a reply to the appeal.
Protection of 
shareholders against unfair prejudice.
Amended by:
IV . 2003.156;XIII. 2004.104.402. (1) Any member of a company who complains that the
affairs of the company have been or are being or are likely to be
conducted in a manner that is, or that any act or omission of t he
company have been or are or are likely to be, oppressive, unfai rly
discriminatory against, or unfairly prejudicial, to a member ormembers or in a manner that is contrary to the interests of themembers as a whole, may make an application to the court for anorder under this article.
(2) Where the Registrar has received a report on a company
under article 410 and it appears to him that the company’s affa irs
are being or have been conducted in a manner falling within themeaning of sub-article (1), he may make an application to the c ourt
for the issue of an order under this article.
(3) If on an application made in terms of sub-article (1) or (2) ,
the court is of the opinion that the complaint is well-founded and
that it is just and equitable to do so, the court may make such  order
under such terms as it thinks fit - 
(a) regulating the conduct of the company’s affairs in the
future; or
(b) restricting or forbidding the carrying out of any
proposed act; or
(c) requiring the company to do an act which the applicant
has complained it has omitted to do; or
(d) providing for the purchase of the shares of any
members of the company by other members of thecompany or by the company itself and, in the case of apurchase by the company, for the reductionaccordingly of the company’s issued share capital; or
(e) directing the company to institute, defend, continue or
discontinue court proceedings, or authorising amember or members of the company to institute,
                    COMP ANIES              [CAP. 386.       245
defend, continue or discontinue court proceedings in
the name and on behalf of the company; or
(f) providing for the payment of compensation by such
person as may have been found by the courtresponsible for loss or damage suffered as a result ofthe act or omission complained of, to the personsuffering the said loss or damage; or
(g) dissolving the company and providing for its
consequential winding up.
(4) When an order is made for the dissolution of a company in
terms of sub-article (3)( g), the company shall be deemed to have
been dissolved on the date when the order is made and theprovisions of Sub-Titles I and III of Title II of Part V of thi s Act
regulating the winding up of companies shall apply.
(5) An order made under this article may require a company not
to make any amendment, or to make such amendment as may berequired, in its memorandum or articles.
(6) In this article, the term "member" includes a person entitle d
at law to represent the interests of a deceased member, a perso n to
whom shares in the company have lawfully devolved by way oftestate or intestate succession, and a trustee, as defined in a rticle
127, who holds shares in the company.
Investigation of 
commercial partnerships and oversea companies.403. (1) The provisions of articles 404 to 413 and of articles
418 to 423 which regulate the investigation of the affairs ofcompanies, shall also apply to other commercial partnerships asthough references to "companies" include references to"commercial partnerships", references to "shares" and to "issue d
share capital" include references to " interests in the partner ship",
and references to "directors" include references to "partners o ther
than limited partners."
(2) The provisions of articles 405 to 410, 412, 413 and 423(1)
shall apply to all bodies corporate constituted or incorporatedoutside Malta which are carrying on business in or have at any time
carried on business in Malta, as if they were companies under t his
Act, but subject to any adaptations and modifications as may be
prescribed.
(3) Where the Registrar appoints one or more inspectors for
any of the purposes specified in the following articles of this  Part,
such inspectors shall produce their letter of authority when sorequired in the exercise of their powers.
(4) Where any of the powers arising in terms of this article or
in terms of articles 404 to 407, 410, 411, 414 and 416 to 419 a re
exercised or are to be exercised in respect of a company which is
licensed or supervised by a competent authority as defined in a rticle
420(3), such powers shall be exercised after consultation with the
relevant competent authority.
(5) An inspector appointed under this Part shall be a person
selected by the Registrar from a list, approved by the Minister  from
time to time, of persons deemed competent to act as inspectors
 246        CAP. 386. ]                         COMP ANIES
under this Part.
Investigation of a 
company on its own application or that of its members.
Amended by:
IV . 2003.157.404. (1) The Registrar may by letter of authority appoint one
or more inspectors to investigate the affairs of a company and to
report thereon in such manner as he may direct.
(2) The appointment may be made at the request of at least two
hundred members or of members holding at least one-tenth of theissued share capital, or at the request of the company.
(3) The request shall be supported by such evidence as the
Registrar may require for the purpose of showing that the perso n or
persons making the request have good reason for requiring theinvestigation.
(4) The Registrar may, before appointing inspectors, require
the person or persons making the request to give such security as he
may require for payment of the expenses of the investigation.
(5) The Registrar may exercise the powers conferred by this
article with respect to a company notwithstanding that it is in  the
course of being wound up voluntarily.
(6) The Registrar shall exercise the powers conferred by this
article where it appears to him that it is expedient and in the  public
interest to do so.
Other company 
investigations.405. (1) Where the court, in the course of proceedings before
it under this Act, by order declares that the affairs of a comp any are
to be investigated, the Registrar shall by letter of authority appoint
one or more inspectors to investigate the affairs of that compa ny
and to report thereon in such manner as he directs.
(2) The court shall make an order as specified in sub-article (1 )
if it appears to it that there are circumstances suggesting - 
(a) that the company’s affairs are being or have been
conducted with intent to defraud its creditors orotherwise for a fraudulent or unlawful purpose, or in amanner which is unfairly prejudicial to some part of itsmembers; or
(b) that any actual or proposed act or omission of the
company is or would be so prejudicial, or that thecompany was formed for any fraudulent or unlawfulpurpose; or
(c) that persons concerned with the company’s formation
or the management of its affairs have in connectiontherewith been guilty of fraud or other misconducttowards it or towards its members; or
(d) that the company’s members have not been given all
the information with respect to its affairs which theymight reasonably expect.
(3) The provisions of sub-articles (1) and (2) shall apply
without prejudice to the powers of the Registrar under article 404.
(4) The power conferred by sub-article (2) shall be exercisable
with respect to a company notwithstanding that it is in the cou rse of
                    COMP ANIES              [CAP. 386.       247
being wound up voluntarily.
Inspectors’ powers 
during investigation.
Amended by:
IV . 2003.158.406. (1) If inspectors appointed under article 404 or article
405 to investigate the affairs of a company think it necessary for
the purposes of their investigation to investigate also the aff airs of
another body corporate which is or at any relevant time has bee n
the company’s subsidiary or parent company, or a subsidiary of its
parent company or a parent company of its subsidiary, they shal l
have power to do so; and they shall report on the affairs of th e other
body corporate so far as they think that the results of theirinvestigation of its affairs are relevant to the investigation of the
affairs of the first mentioned company.
(2) Inspectors appointed under article 404 or article 405 may at
any time in the course of their investigation, without the nece ssity
of making an interim report, inform the Registrar of matters co ming
to their knowledge as a result of the investigation tending to show
the existence of a default or the commission of an offence.
Production of 
documents and evidence to inspectors.407. (1) When inspectors are appointed under article 404 or
article 405, it shall be the duty of all officers and agents of  the
company, and of all officers and agents of any other body corpo rate
whose affairs are investigated under article 406(1) - 
(a) to produce to the inspectors all accounts, accounting
records and documents of or relating to the companyor, as the case may be, the other body corporate whichare in their custody or power, when required to do so;
(b) to attend before the inspectors when required to do so;
and
(c) otherwise to give the inspectors all assistance in
connection with the investigation which they arereasonably able to give.
(2) If the inspectors consider that a person other than an offic er
or agent of the company or other body corporate is or may be inpossession of information concerning its affairs, they may requ ire
that person to produce to them any accounts, accounting records  or
documents in his custody or power relating to the company or ot her
body corporate, to attend before them and otherwise to give the m
all assistance in connection with the investigation which he isreasonably able to give, and it shall be the duty of that perso n to
comply with that requirement.
(3) An inspector may examine on oath the officers and agents
of the company or other body corporate, and any such person as is
mentioned in sub-article (2), in relation to the affairs of thecompany or other body corporate, and may administer an oathaccordingly.
(4) In this article a reference to officers or to agents include s
past, as well as present, officers or agents, as the case may b e; and
"agents", in relation to a company or other body corporate, inc ludes
its bankers and persons appointed by it as auditors, whether th ese
persons are or are not officers of the company or other bodycorporate.
 248        CAP. 386. ]                         COMP ANIES
Power of inspector 
to call for directors’ bank accounts.408.  If an inspector has reasonable grounds for believing that a
director, or past director, of the company or other body corpor ate as
referred to in article 406(1) whose affairs he is investigatingmaintains or has maintained a bank account of any description,whether alone or jointly with another person and whether in Mal ta
or elsewhere, into or out of which there has been paid - 
(a) the emoluments or part of the emoluments of his office
as director as aforesaid, whether or not disclosed in theaccounting records of the company; or
(b) any money which has resulted from or been used in the
financing of an undisclosed transaction, arrangementor agreement; or
(c) any money which has been in any way connected with
an act or omission, or series of acts or omissions whichon the part of that director constituted misconduct,whether fraudulent or not, towards the company orbody corporate or its members,
the inspector may require the director to produce to him all
documents in the director’s possession, or under his control,relating to that bank account.
Obstruction of 
inspectors during investigation of company’s affairs.
Amended by:
L.N. 425 of 2007.409.  If any person referred to in article 407 - 
(a) refuses to produce any book or document which it is
his duty under article 407 or article 408 to produce tothe inspectors; or
(b) refuses to attend before the inspectors when required
to do so; or
(c) refuses to answer any question put to him by the
inspectors with respect to the affairs of the company orother body corporate, as referred to in article 406(1),as the case may be,
he shall be guilty of an offence and liable on conviction to a fine
(multa ) of not more than four thousand and six hundred and fifty-
eight euro and seventy-five cents (4,658.75) or imprisonment fo r a
term not exceeding six months or to both such fine andimprisonment.
Inspectors’ reports. 410. (1) The inspectors shall make interim reports to the
Registrar and on the conclusion of their investigation shall ma ke a
final report to him.
(2) If the inspectors were appointed under article 405 in
pursuance of an order of the court, the Registrar shall furnish  a
copy of all their reports to the court.
(3) The Registrar may, if he thinks fit - 
(a) forward a copy of any report made by the inspectors to
the company’s registered office;
(b) furnish a copy on request and on payment of the
prescribed fee to - 
(i) any member of the company or other body
corporate which is the subject of the report;
                    COMP ANIES              [CAP. 386.       249
(ii) any person whose conduct is referred to in the
report;
(iii) the auditors of that company or body corporate; (iv) the applicants for the investigation;
(v) any other person whose financial interests
appear to the Registrar to be affected by thematters dealt with in the report, whether as acreditor of the company or body corporate, orotherwise; and
(c) cause any such report to be published.
Power to bring 
civil proceedings on company’s behalf.411. (1) If, from any report made under article 410 or from
information or documents obtained under article 418 or article 419,
it appears to the Registrar that any civil proceedings ought in  the
public interest to be brought by any body corporate, he may him self
with the consent of the Attorney General bring such proceedings  in
the name and on behalf of that body corporate.
(2) The Registrar shall indemnify the body corporate against
any costs or expenses incurred by it in or in connection withproceedings brought under this article.
Expenses of 
investigating a company’s affairs.412. (1) The expenses of and incidental to an investigation by
inspectors appointed by the Registrar shall be defrayed by him;provided that the persons mentioned in sub-articles (2) to (5) shall
be, to the extent there specified, liable to make repayment to the
Registrar.
(2) A person who is convicted on a prosecution instituted as a
result of the investigation, or is ordered to pay the whole or any
part of the costs of proceedings brought under article 411 may in
the same proceedings be ordered to pay those expenses to suchextent as may be specified in the order.
(3) A body corporate in whose name proceedings are brought
under article 411 shall be liable to the amount or value of any  sums
or assets recovered by it as a result of those proceedings; and  any
amount for which a body corporate is liable under this sub-arti cle
shall be paid, in priority to all other claims, from the sums o r assets
recovered.
(4) A body corporate dealt with by the inspectors’ report shall
be liable for the expenses of and incidental to the investigati on
unless that body corporate was the applicant for the investigat ion,
and unless the Registrar otherwise directs.
(5) The applicant or applicants for the investigation, where the
inspectors were appointed under article 404, shall be liable to  such
extent, if any, as the Registrar may direct.
(6) The report of the inspectors may include a recommendation
as to the directions which they think appropriate, in the light  of
their investigation, to be given under sub-article (4) or sub-a rticle
(5).
(7) For the purposes of this article, any costs or expenses
incurred by the Registrar in or in connection with proceedings
 250        CAP. 386. ]                         COMP ANIES
brought under article 411 are to be treated as expenses of the
investigation giving rise to the proceedings.
(8) Any liability to repay the Registrar arising from sub-
articles (2) and (3) shall, subject to satisfaction of the righ t of the
Registrar to repayment, be a liability also to indemnify all pe rsons
against liability under sub-articles (4) and (5); and any suchliability imposed by sub-article (2) shall, subject as mentione d
above, be a liability also to indemnify all persons against lia bility
under sub-article (3).
(9) A person liable under any one of the sub-articles referred t o
in sub-article (8) is entitled to contribution from any other p erson
liable by virtue of the same sub-article, according to the amou nt of
their respective liabilities by virtue of that sub-article.
(10) Expenses to be defrayed by the Registrar under this article
shall, insofar as not recovered by virtue of its provisions, be  paid
out of public funds.
Inspectors’ report 
to be admissible as evidence.413.  A copy of any report of inspectors appointed under article
404 or article 405 certified by the Registrar to be a true copy , shall
be admissible in any legal proceedings as evidence of the opini on
of the inspectors in relation to any matter contained in that r eport.
Power to 
investigate company ownership.414. (1) Where it appears to the Registrar that there is good
reason to appoint one or more inspectors to investigate and rep ort
on the membership of any company for the purpose of determiningthe true persons who are or have  been financially interested in  the
success or failure of the company or able to control or materia lly
influence its policy, he may by letter of authority appoint one  or
more inspectors for such purpose.
(2) The appointment of inspectors made by virtue of this article
may establish the scope of their investigation, whether as resp ects
the matter or the period to which it is to extend or otherwise,  and in
particular may limit the investigation to matters connected wit h
particular shares or debentures.
(3) If a request for an investigation under this article with
respect to particular shares or debentures of a company is made  to
the Registrar by members of the company, and the number ofpersons making the request or the amount of the shares held bythem is not less than that required for a request for the appoi ntment
of inspectors made by virtue of article  404(2) - 
(a) the Registrar shall appoint inspectors to conduct the
investigation, unless he is satisfied that the request isvexatious; and
(b) the Registrar may exclude from the scope of the
investigation any matter in respect of which he issatisfied that it would be unreasonable to investigate.
(4) Subject to the terms of their appointment, the inspectors’
powers shall extend to the investigation of any circumstancessuggesting the existence of an arrangement or understandingwhich, though not legally binding, is or was adhered to or like ly to
be adhered to in practice and which is relevant to the purposes  of
                    COMP ANIES              [CAP. 386.       251
the investigation.
(5) The Registrar may, before appointing inspectors, require
the person or persons making the request to give such security as he
may require for payment of expenses of the investigation.
Provisions 
applicable on investigation under article 414.415. (1) For the purposes of an investigation made by virtue of
article 414, the provisions of articles 406(1), 407, 408 and 40 9 shall
apply with the necessary modifications of references to the aff airs
of the company or to those of any other body corporate, subjecthowever to the provisions of sub-articles (2) to (4).
(2) The provisions of the articles referred to in sub-article (1 )
shall apply to - 
(a) all persons who are or have been, or whom the
inspector has reasonable cause to believe to be or havebeen, financially interested in the success or failure ofthe company or any other body corporate whosemembership is investigated with that of the company,or able to control or materially influence its policy,including persons concerned in the affairs of thecompany only on behalf of others; and
(b) any other person whom the inspector has reasonable
cause to believe possesses information relevant to theinvestigation, 
as they apply in relation to officers and agents of the company  or
any other body corporate whose membership is investigated, as t he
case may be. "officers" and "agents" shall have the meaningassigned to them by article  407(4).
(3) If the Registrar is of the opinion that there is good reason
for not divulging any part of a report made by virtue of articl e 414
and of this article, he may forward or furnish a copy of the re port in
accordance with the provisions of article 410(3) with the omiss ion
of that part.
(4) The applicant or applicants for the investigation shall be
liable to such extent, if any, as the Registrar may direct; and  subject
as aforesaid, the expenses of an investigation made by virtue o f
article 414 shall be paid out of public funds.
Power to obtain 
information as to those interested in shares, etc.
Amended by:
L.N. 425 of 2007.416. (1) If it appears to the Registrar that there is good reason
to investigate the ownership of any shares in or debentures of a
company and that it is unnecessary to appoint inspectors for th e
purpose, he may require any person, whom he has reasonable caus e
to believe to have or to be able to obtain any information as t o the
present and past interests in those shares or debentures and th e
names and addresses of the persons interested and of any person s
who act or have acted on their behalf in relation to those shar es or
debentures, to give any such information to the Registrar.
(2) For the purpose of this article a person is deemed to have a n
interest in shares or debentures if he has any right to acquire  or
dispose of them or of any interest in them, or to vote in respe ct of
them, or if his consent is necessary for the exercise of any of  the
 252        CAP. 386. ]                         COMP ANIES
rights of other persons interested in them, or if other persons
interested in them can be required, or are accustomed, to exerc ise
their rights in accordance with his instructions.
(3) A person who fails to give information required of him by
virtue of this article, or who in giving such information makes  any
statement which he knows to be false in a material particular, or
recklessly makes any statement which is false in a materialparticular, shall be guilty of an offence and shall be liable o n
conviction to a fine ( multa ) of not more than forty-six thousand and
five hundred and eighty-seven euro and forty-seven cents(46,587.47) or imprisonment for a term not exceeding three year s
or to both such fine and imprisonment.
Power to impose 
restrictions on shares or debentures.
Amended by:
L.N. 425 of 2007.417. (1) Where in connection with an investigation made by
virtue of article 414 or article 416, it appears to the Registr ar that
there is difficulty in finding out the relevant facts about any  shares,
whether issued or to be issued, and that the difficulty is due wholly
or mainly to the unwillingness o f any of the persons referred t o in
the said two articles to assist the investigation as required b y this
Act, the Registrar may by order direct that the shares shall un til
further notice be subject to the restrictions imposed by sub-ar ticles
(2) to (7).
(2) An order made by virtue of sub-article (1) shall have the
following effects:
(a) any transfer of those shares, or in the case of unissued
shares any transfer of the right to be issued with themand any issue of them, shall be void;
(b) no voting rights shall be exercisable in respect of those
shares;
(c) no further shares shall be issued in lieu of those shares
or in pursuance of any offer made to their holder;
(d) except in a winding up, no payment shall be made of
any sums due from the company on those shares,whether in respect of capital or otherwise.
(3) Where the Registrar makes an order directing that shares
shall be subject to the restrictions mentioned in sub-article ( 2), any
person aggrieved thereby may apply to the court and the court m ay,
if it deems fit, direct that the shares shall cease to be subje ct to the
said restrictions.
(4) Any notice of the Registrar or order of the court may direct
that shares shall cease to be subject to the restrictions menti oned in
sub-article (2)( a) and ( b), with a view to permitting a transfer of
those shares, and may retain the restrictions mentioned in the said
sub-article (2)( c) and ( d), either in whole or in part, insofar as they
relate to any right acquired or offer made before the transfer.
(5) Any person who - 
(a) exercises or purports to exercise any right to dispose
of any shares which, to his knowledge, are for the timebeing subject to the restrictions mentioned in sub-article (2), or of any right to be issued with any such
                    COMP ANIES              [CAP. 386.       253
shares; or
(b) votes in respect of any such shares, whether as holder
or as proxy, or appoints a proxy to vote in respectthereof,
shall be guilty of an offence and shall be liable on conviction  to a
fine ( multa ) of not more than four thousand and six hundred and
fifty-eight euro and seventy-five cents (4,658.75) or imprisonm ent
for a term not exceeding six months or to both such fine andimprisonment.
(6) Where shares in any company are issued in contravention of
the restrictions mentioned in sub-article (2), every officer of  the
company who is in default shall be guilty of an offence and sha ll be
liable on conviction to a fine ( multa ) of not more than eleven
thousand and six hundred and forty-six euro and eighty-seven ce nts
(11,646.87).
(7) This article shall apply in relation to debentures as it
applies in relation to shares.
Registrar’s powers 
to require production of documents.
Amended by:
IV . 2003.159;L.N. 425 of 2007.418. (1) The powers arising under this article shall be
exercisable in relation to the following persons with regard to  the
respective entity as follows:
(a)  (i)  the officers of a company;
(ii) the partners having the administration or
representation of any other commercialpartnership; and
(b) the persons having the administration or control in
Malta of, or any individuals authorised to represent inMalta a body corporate constituted or incorporatedoutside Malta which is carrying on business in Maltaor has at any time carried on business in Malta.
(2) The Registrar may at any time, if he thinks there is good
reason to do so, in the exercise of the duties and powers veste d in
him under this Part, give directions to any person referred to in sub-
article (1) requiring him, at such time and place as may be spe cified
in the directions, to produce such accounts, accounting records  or
documents as may be so specified.
(3) Where by virtue of sub-article (2) the Registrar has power
to require the production of accounts, accounting records ordocuments from any person referred to in sub-article (1), he sh all
have the like power to require production of those accounts,accounting records or documents from any person who appears tohim to be in possession of them; provided that where any suchperson claims a privilege or other charge on accounts, accounti ng
records or documents produced by him, the production shall bewithout prejudice to that privilege or charge.
(4) The power under this article to require a person referred to
in sub-article (1) or other person to produce accounts, account ing
records or documents shall include the power - 
(a) if the accounts, accounting records or documents are
 254        CAP. 386. ]                         COMP ANIES
produced - 
(i) to take copies of or extracts from them; and
(ii) to require that person, or any other person who is
a present or past officer of, or is or was at anytime employed by the entity in question, toprovide an explanation of any of them;
(b) if the accounts, accounting records or documents are
not produced, to require the person who was requiredto produce them to state, to the best of his knowledgeand belief, where they are.
(5) If the requirement to produce accounts, accounting records
or documents or to provide an explanation or to make a statemen t is
not complied with, the person on whom the requirement was soimposed shall be guilty of an offence and liable on conviction to a
fine ( multa ) of not more than eleven thousand and six hundred and
forty-six euro and eighty-seven cents (11,646.87).
(6) Where a person is charged with an offence under sub-article
(5) in respect of a requirement to produce any accounts, accoun ting
records or documents, it shall be a defence to prove that they were
not in his possession or under his control and that it was notreasonably practicable for him to comply with the requirement.
Entry and search of 
premises.
Amended by:
L.N. 425 of 2007.419. (1) If the Registrar is satisfied that reasonable grounds
exist for suspecting that there are on any premises any account s,
accounting records or documents of which production has beenrequired under article 418 and which have not been produced incompliance with that requirement, he shall have the right to en ter
and search any such premises in accordance with the provisions of
sub-articles (2) and (3).
(2) The Registrar, in exercising his right to enter and search t he
premises as specified in sub-article (1), shall have the right to take
possession of any accounts, accounting records or documentsappearing to be such accounts, accounting records or documents as
referred to in the said sub-article, or to take in relation to any
accounts, accounting records or documents so appearing, any oth er
steps which he shall consider to be necessary for preserving th em
and preventing interference with them.
(3) The right conferred upon the Registrar by virtue of sub-
article (1) shall only be exerci sable during working days, betw een
seven in the morning and seven in the evening, and in all cases  the
Registrar shall be accompanied by an officer of the Police of a  rank
not below that of inspector and the Registrar shall, if require d,
produce evidence of his authority.
(4) Any accounts, accounting records or documents of which
possession is taken under this article may be retained - 
(a) for a period of ninety days; or
(b) if within that period any such criminal proceedings as
are mentioned in article 420(1)( a) or ( b), being
proceedings to which the accounts, accounting recordsor documents are relevant, shall commence,
                    COMP ANIES              [CAP. 386.       255
until the conclusion of those proceedings.
(5) A person who obstructs the exercise of a right of entry or
search conferred by virtue of this article, or who obstructs th e
exercise of a right so conferred to take possession of any acco unts,
accounting records or documents, shall be guilty of an offence and
liable on conviction to a fine ( multa ) of not more than four
thousand and six hundred and fifty-eight euro and seventy-fivecents (4,658.75) or to imprisonment for a term not exceeding si x
months or to both such fine and imprisonment.
Provision for 
security of information obtained.
Amended by:
L.N. 425 of 2007;X. 2011.70.420. (1) No information or document relating to an entity as is
referred to in article 418(1) which has been obtained under the  said
article 418 or article 419 shall, without the previous consent in
writing of that entity, be published or disclosed, unless thepublication or disclosure is required - 
(a) with a view to the institution of, or otherwise for the
purposes of, any criminal proceedings pursuant to, orarising out of, this Act or any other law;
(b) for the purposes of the examination of any person by
inspectors appointed under this Part in the course oftheir investigation;
Cap. 403. 
Cap. 330.Cap. 345.Cap. 476.Cap. 370.Cap. 371.Cap. 376.(c) for the purpose of enabling the responsible Minister,
the Registrar or the competent authority to exercise, in
relation to the entity or any other entity, any of theirfunctions under this Act, the 
Insurance Business Act,
the Malta Financial Services Authority Act, the
Financial Markets Act, the Prevention of Financial
Markets Abuse Act, the Investment Services Act, the
Banking Act and the Financial Institutions Act;
(d) for the purposes of proceedings under article 419.
(2) A person who publishes or discloses any information or
document in contravention of this article shall be guilty of anoffence and liable on conviction to a fine ( multa ) of not more than
forty-six thousand and five hundred and eighty-seven euro andforty-seven cents (46,587.47) or imprisonment for a term notexceeding three years or to both such fine and imprisonment. 
(3) For the purposes of this article "competent authority" shall
mean - 
(a) the Central Bank of Malta;
Cap. 370. (b) the competent authority under the Investment Services
Act;
Cap. 403. (c) an inspector appointed under the Insurance Business
Act; 
Cap. 371. (d) an inspector appointed under the Banking Act; 
Cap. 330.(e) the Malta Financial Services Authority carrying out its
functions under the Malta Financial Services Authority
Act;
Cap. 345.(f) the regulated market carrying out its functions under
the Financial Markets Act; and
 256        CAP. 386. ]                         COMP ANIES
Cap. 376. (g) the competent authority under the Financial
Institutions Act.
Punishment for 
destroying, mutilating, etc., company documents.
Amended by:
L.N. 425 of 2007.421. (1) A person, being an officer of any such entity as is
referred to in article 418(1), who - 
(a) destroys, mutilates or falsifies, or permits, assists or
participates in the destruction, mutilation orfalsification of a document affecting or relating to theentity’s assets or affairs; or
(b) makes, or permits, assists or participates in the making
of, a false entry in such a document,
shall be guilty of an offence.
(2) Any person as referred to in sub-article (1) who
fraudulently either disposes of, alters or makes an omission in  any
such document as is referred to in that sub-article or permits,assists or participates in a fraudulent disposal, fraudulent al tering
or fraudulent making of an omission in, any such document, shal l
be guilty of an offence.
(3) A person guilty of an offence under this article shall be
liable on conviction to a fine ( multa ) of not more than forty-six
thousand and five hundred and eighty-seven euro and forty-sevencents (46,587.47) or imprisonment for a term not exceeding thre e
years or to both such fine and imprisonment.
Punishment for 
furnishing false information.
Amended by:
L.N. 425 of 2007.422.  A person who, in responding to a requirement imposed
under article 418 to provide an explanation or make a statement ,
knowingly or recklessly provides or makes an explanation orstatement which is false in a material particular shall be guil ty of an
offence and liable on conviction to a fine ( multa ) of not more than
forty-six thousand and five hundred and eighty-seven euro andforty-seven cents (46,587.47) or imprisonment for a term notexceeding three years or to both such fine and imprisonment.
Privileged 
information.423. (1) Nothing contained in articles 404 to 417 shall require
the disclosure to the Registrar or to an inspector appointed by  him - 
Cap. 12.(a) of communications which are privileged by virtue of
the provisions of article 588 of the Code of
Organization and Civil Procedure ;
(b) by a company’s bankers of information on the affairs
of any of their customers other than the companyitself.
(2) Nothing contained in articles 418 to 422 shall be deemed to
compel the production by any person as is referred to in articl e 588
of the 
Code of Organization and Civil Procedure of any document
containing a communication which is privileged in accordance wi th
that article, or shall authorise the taking of possession of an y such
document which is in that person’s possession.
(3) Notwithstanding the provisions of article 418, the Registrar
shall not require the production by a person carrying on thebusiness of banking of a document relating to the affairs of acustomer, unless it appears to the Registrar that it is necessa ry to do
                    COMP ANIES              [CAP. 386.       257
so for the purpose of investigating the affairs of that person
carrying on the business of banking or of the customer, being a n
entity in terms of article 418.
Cap. 377.(4) Subject to the provisions of sub-article (3), nothing
contained in the Professional Secrecy Act shall be construed as
precluding or otherwise restricting - 
(a) the powers and functions assigned to the Registrar or
to an inspector appointed by him under the provisionsof this Part; and
(b) the disclosure by any person of information,
documentation or other communication to theRegistrar or to an inspector appointed by him, or thedoing of anything required to be done, by virtue of anyof the provisions of this Part.
Right to inspect 
and obtain copies of documents, etc., kept by Registrar.424.  Any person may - 
 (a) inspect the documents kept by the Registrar other than
documents obtained by him or coming to hisknowledge in the course of the exercise of his powersarising under articles 403 to 423;
(b) obtain a copy of the certificate of the registration of
any commercial partnership or a copy or extract of anyother document, and require it to be certified by theRegistrar as a true copy.
Power to make 
regulations.
Amended by:
XVII. 2002.234;IV . 2003.160;XIII. 2004.105;L.N. 391 of 2005;XV . 2007.14;L.N. 425 of 2007;IX. 2008.40;X. 2011.71;XX. 2013.95;XXII. 2014.22;XXXI. 2015.22;XI.2017.16;XXXI. 2017.81;XXXI.2020.5. 425. (1) The Minister may make regulations for the purpose of
carrying into effect the provisions of this Act, and may, witho ut
prejudice to the generality of the foregoing, by such regulatio ns - 
(a) prescribe the fees to be levied in relation to the
registration, publication, inspection or issue ofdocuments, certificates, copies or extracts, required orallowed under this Act, and different fees may belevied for different kinds or categories of commercialpartnerships, and may further prescribe different feesfor companies on the basis of their status;
(b) prescribe forms to be used under this Act;
(c) amend, revoke or substitute the minimum share capital
requirement established by article 72, the criteria setout in article 185 and the formulae for determining theaverage number of employees set out in sub-article(12) of the last mentioned article;
(d) amend any Schedule to this Act other than the Ninth,
Eleventh and Twelfth Schedule and for this purposemay distinguish between different categories ofcompanies;
(e) prescribe the qualifications necessary to act as
company secretary, including any residencequalification, as he may deem fit;
(f) prescribe regulations, not inconsistent with the
provisions of this Act, for the conduct of winding up
 258        CAP. 386. ]                         COMP ANIES
proceedings under Title II of Part V of this Act, and
prescribe criteria for establishing who may beconsidered as a fit and proper person to act asliquidator for the purposes of article 305(1);
(g) prescribe requirements in relation to the allotment and
the transfer of shares or debentures, their numbering,their registration with the company and with theRegistrar, the keeping of the register of members andof debentures, and the issue of the relevant share anddebenture certificates in respect of any allotment ortransfer of shares or debentures, in relation tocompanies listed on any regulated market or anyequivalent market in a non-Member State or non-EEAState and to investment companies with variable sharecapital, and such requirements that are prescribed mayalso be in substitution of those of the relevantprovisions contained in Chapters IV and VI of Title Iof Part V of this Act;
(h)Deleted by Act XI. 2017.16.
(i) provide for the exemption of companies, or any kind
or category thereof, from any of the provisions ofarticles 105 to 111, or for the application to any suchcompanies of the said provision subject to suchvariations and conditions as may be prescribed;
Cap. 330.(j) provide for the exemption of offshore companies
formed and registered under the Malta Financial
Services Authority Act from any of the provisions of
this Act, or for the application to any such companiesof the said provisions with such qualifications andsubject to such variations and conditions as may beprescribed, including the prescription of additional ordifferent rules and requirements regulating suchcompanies;
(k) provide for the exemption of oversea companies,
which establish a branch or place of business withinMalta under Part XI of this Act, from any of theprovisions of Part XI of this Act, or for the applicationto any such oversea companies of the said provisionswith such qualifications and subject to such variationsand conditions as may be prescribed, including theprescription of additional or different rules andrequirements regulating such oversea companies;
(l) prescribe requirements in relation to the drawing-up,
approval, publication and distribution of prospectusesrelating to an offer to the public of securities and suchrequirements may stipulate any further conditionsnecessary to implement 
the Prospectus Directive ;
(m) prescribe requirements in relation to the system of
interconnection of registers and the interoperability ofregisters within the system of interconnection ofregisters through the European e-Justice portal, and
                    COMP ANIES              [CAP. 386.       259
such requirements may stipulate any further conditions
necessary to implement Directive 2012/17/EU    of the
European Parliament and of the Council of 13 June2012 amending 
Council Directive 89/666/EEC  and
Directives 2005/56/EC  and 2009/101/EC  of the
European Parliament and of the Council as regards theinterconnection of central, commercial and companiesregisters;
(n) require undertakings other than small undertakings to
disclose information in their annual financialstatements which is additional to that requiredpursuant to this Act;
(o) transpose and implement Community Company Law
Directives; such regulations may provide for suchexemptions, modifications, adaptations and variationsof any of the provisions of this Act and may introduceconditions or qualifications thereto as may bespecified and as may be necessary for the transpositionand implementation of such Directives;
(oa) provide for the exemption of certain small undertakings
from the provisions of Chapter IX of Title I of Part V ofthis Act and from th e requirements imposed by article
179, subject to such conditions and requirements as may
be prescribed; and
(p) prescribe anything that may be prescribed and
generally do any other matter incidental orsupplementary to any of the foregoing matters.
(2) The Minister may by regulations provide for the obligation
and for the form and manner of disclosure and notification ofinterests, including ownership, in shares in public companies, and
may in particular:
(a) prescribe by and to whom, when, under what
circumstances and conditions and how such disclosureor notification shall be made; and different obligationsand duties may be prescribed for different types ofcompanies;
(b) establish the particulars to be contained in any
notification of interests in shares and thecircumstances when investigations may be carried outby a company in respect of the holding of any shares,or other interest therein, and further establish when, towhom and in what manner the company shall beobliged to report on the findings of any suchinvestigation;
(c) provide for the keeping of registers of interests in
shares, for the notification and registration of shareacquisitions and disposals, and for the manner inwhich such notification and registration shall berecorded, and provide for the investigation of shareacquisitions and disposals;
 260        CAP. 386. ]                         COMP ANIES
(d) establish -
(i) offences, providing for a fine ( multa ) of not more
than two hundred and thirty thousand euro(€230,000) or a term of imprisonment not
exceeding five years, or for both such fine andimprisonment;
(ii) administrative penalties not exceeding two
thousand and three hundred euro (€2,300), or dailydefault penalties not exceeding fifty euro (€50) forevery day during which the default continues, or
both such penalties and daily default penalties;
for failure to effect a prescribed disclosure or to make
a notification or for any other contravention of theprovisions of any regulation made in terms of this sub-article;
(e) provide for any matter incidental to or connected with
any of the above.
(3) ( a) The Minister may by regulations provide for the
formation, constitution and regulation of economicinterest groupings to be endowed with such legalpersonality and capacity as may be established. In thissub-article, "economic interest groupings" refers togroups or associations consisting of two or morepersons and whose objects are to facilitate or developthe economic activities of their members, or toimprove or increase the profits or benefits of suchactivities.
(b) Regulations made by the Minister in virtue of
paragraph ( a), shall, in particular and without
prejudice to the authority vested in the Minister by thesaid paragraph, prescribe:
(i) the contents and particulars that are to be stated
in the deed or instrument of constitution of aneconomic interest grouping, including its name,objects and purposes, capital structure, duration,membership, the location of its principal orregistered office, and the requirements relatingto the form, registration and publication of suchdeed or instrument, and the particulars to bestated in the business letters of an economicinterest grouping;
(ii) requirements relating to the keeping of records
with respect to the transactions and financialposition of the grouping, and other accounting,auditing, reporting and disclosure obligations;
(iii) rules in respect of the administration and
management of the grouping and of theadministrative and management organs of thegrouping, including the powers andresponsibilities of the directors, and holding ofmeetings of the members, the keeping of
                    COMP ANIES              [CAP. 386.       261
registers of members and such other records as
may be prescribed;
(iv) rules governing the rights and obligations of the
members, the admission, cessation or expulsionof members, the rights of members to share inthe profits of the grouping and in its residualassets on liquidation and their liability tocontribute to losses;
(v) rules governing the conversion, dissolution and
winding up of an economic interest grouping,including the appointment of a liquidator, andhis powers and responsibilities;
(vi) rules providing for the possibility of cross-
border and transnational economic interestgroupings, including European EconomicInterest Groupings, enjoying the same capacityin two or more states by virtue of theirregistration in one state; for the regulation of theformation, constitution and recognition of suchgroupings; and providing for the application ofany regulations made by virtue of this sub-article to such groupings with such exemptions,variations or modifications as may beestablished;
(vii) the fees that may be levied in relation to the
registration of groupings referred to in this sub-article, or categories of such groupings;
(viii) the articles of this Act which shall apply to
economic interest groupings, or to particularcategories thereof, subject to such conditionsand with such exemptions, modifications andvariations as may be deemed appropriate. 
(4) The Minister may make detailed regulations -
(a) for the purpose of allowing a body corporate, formed
and incorporated or registered in a country other thanMalta, which is similar in nature to a company asknown under the laws of Malta, to be continued as acompany under this Act and under the applicable lawsof Malta, and
(b) for the purpose of allowing the continuance of a
company registered under this Act as a body corporateincorporated or registered under the laws of a countryother than Malta.
Such regulations may establish requirements in relation to
the procedures to be followed and the documentation, undertakin gs
and information to be supplied to the Registrar for the purpose  of
carrying out any such continuance, and the rules may furtherauthorise the Registrar to issue guidelines stipulating such fu rther
conditions and requirements as the Minister may deem appropriat e,
and different regulations and guidelines may be issued for diff erent
categories or classes of cases.
 262        CAP. 386. ]                         COMP ANIES
(5) The Minister may by regulations provide for the formation,
constitution and regulation of European Companies (SE). In thissub-article, a European Company (Societas Europea or SE) refersto a company set up within the territory of the European Union on
the conditions and in the manner laid down in 
Council Regulation
2157/2001 of 8 October 2001 on the Statute for a European
Company (SE).
(6) The Minister may make regulations to transpose, implement
and give effect to the provisions and requirements of Directive s,
Regulations and any other legislative measures of the European Union
requiring transposition and, or implementation, as they may beamended from time to time, including any implementing measures that
have been or may be issued thereunder.
(7) Regulations made under any of the provisions of this Act
may be made in the English language only.
(8) Where in respect of any of the services or other acts to be
performed by the Registrar a fee is prescribed under sub-articl e (1),
the regulations may prescribe that the Registrar may decline toperform such service or other act until the appropriate fee is paid;
and that any instrument, notice, return or other document deliv ered,
given or forwarded to the Registrar under this Act shall, if a fee is
prescribed as aforesaid in respect of the registration or publi cation
thereof, be deemed not to have been delivered, given or forward ed
as required by this Act until the appropriate fee is paid.
(9) The Minister may prescribe regulations for electronic filin g
and, or electronic signing of notices required by this Act, ele ctronic
signatures, the issuing of electronic certificates, letters, an d any
other documents issued by the Registrar and any other ancillarymatters.
(10) The Minister may by regulations on the holding of annual
general meetings, extend the term for the holding of the annualgeneral meeting and for the laying and approval of accounts. Inaddition to that the Minister may by regulations provide forsuspension of any periods for the holding of general meetings,whether ordinary or extraordinary, and to the holding of virtua l
annual general meetings and other meetings.
(11) The Minister may make regulations for the better carrying
out of any of the provisions of sub-article (1) of article 218,  and
may, without prejudice to the generality of the foregoing, by s uch
regulations suspend the right of any of the persons mentioned i n the
said sub-article to file a winding up application in terms of t he said
sub-article (1) of article 218 and article 214.
(12) The Minister may make regulations for the better carrying
out of any of the provisions of article 316, and may, withoutprejudice to the generality of the foregoing, by such regulatio ns
suspend even retrospectively the application of the provisions of
the said article 316.
                    COMP ANIES              [CAP. 386.       263
(13) The Minister may make regulations for the better carrying out
of any of the provisions of article 223, and may, without preju dice to the
generality of the foregoing, by such regulations prescribe new rules in
relation to the deemed date of dissolution of a company.
Breach of 
regulations.
Amended by:
L.N. 425 of 2007;X. 2011.72.426. (1) The power to make regulations under article 425
includes the power to prescribe that any person in breach of an y
provision of any such regulation shall be guilty of an offence and
sshall on conviction be liable to a fine ( multa ) of not more than two
hundred and thirty thousand euro (€230,000) or imprisonment for  a
term not exceeding six months or to both such fine andimprisonment, as may be prescribed.
(2) The power to make regulations under article 425 includes
the power to prescribe that any person who acts in breach of an y
such regulation shall be liable to a penalty of not more than t wo
thousand and three hundred euro (€2,300) and, where applicable,  to a
further penalty of fifty euro (€50) for every day during which the
default continues, to be imposed by the Registrar in terms of a rticle
401.
Administrative 
penalties under this 
Act.
Amended by:
IV . 2003.161.427. (1) Where any provision of this Act provides for the
imposition of a penalty, the amount of such penalty shall bedetermined by reference to the Eleventh Schedule, which specifi es
the maximum penalty that may be imposed by the Registrar underany of the provisions of this Act.
(2) In the Eleventh Schedule, the first column indicates the
article and sub-article of this Act which prescribes that a pen alty
shall be imposed, the second column gives a general description  of
the infringement, which description shall not be relied on ininterpreting any provision of this Act, the third column prescr ibes
the maximum penalty and the fourth column prescribes themaximum daily default penalty, if any. The penalty shall becomedue on the day on which the default occurs and the daily defaul t
penalty shall be due for every day during which the defaultcontinues and shall accrue from the day following that on which  the
default occurs.
(3) Action by the Registrar for the recovery of a penalty under
this Act shall be prescribed by the lapse of five years from th e day
on which the default occurs.
(4) A company shall be jointly and severally liable with its
officers for the payment of any administrative penalties impose d
under this Act.
PART XIII - TRANSITIONAL AND FINAL PROVISIONS
 264        CAP. 386. ]                         COMP ANIES
Transitional 
provisions.
Amended by:
XXX. 1997.2;IV . 2003.162;XII. 2006.73;L.N. 425 of 2007.428. (1) As from the appointed day a commercial partnership
shall not be formed and registered unless it complies with theprovisions of this Act, and a commercial partnership formed andregistered as aforesaid shall be regulated by this Act.
(2) Subject to the provisions of this Part, as from the appointe d
day all commercial partnerships formed and registered under theOrdinance shall be deemed to be formed and registered under thi s
Act, and shall retain the same legal personality and maintain a ll
existing rights and obligations.
(3) Investment companies with variable share capital formed
and registered before the appointed day shall comply with theprovisions of this Act within one month from the appointed day and
the provisions of sub-articles (4) to (13), other than sub-arti cle (8),
shall not apply to them.
(4) Unless otherwise provided in this article, and
notwithstanding anything contained in the Memorandum or
Articles or in the deed of partnership, as the case may be, as from
the 1st March, 1998, the provisions of this Act shall apply tocommercial partnerships formed and registered under theOrdinance. Such commercial partnerships shall, before the 1stMarch, 1998, comply with the provisions of this Act and shall, until
such time, continue to be regulated by the Ordinance:
Provided that a commercial partnership may, by complying
with the provisions of this Act before such date, elect to beregulated by the provisions of this Act and for this purpose th e
company shall additionally deliver a notice in writing to theRegistrar for registration; and such election shall not take ef fect
unless and until such notice is registered.
(5) The provisions of Chapters IX and X of Part V of this Act
shall, in regard to companies formed and registered under theOrdinance, apply to accounting periods commencing after 30thJune 1996.
(6) A private company formed and registered under the
Ordinance shall, by complying with the provisions of this Actrelating to private companies within the period specified in su b-
article (4), continue as a private company under this Act unles s it
changes its status to one of a public company in accordance wit h
the provisions of article 213.
(7) A public company formed and registered under the
Ordinance shall, by complying with the provisions of this Actrelating to public companies within the period specified in sub -
article (4), continue as a public company under this Act unless  it
changes its status to one of a private company in accordance wi th
the provisions of article 213.
(8) If an investment company as is referred to in sub-article (3 ),
fails to comply with the provisions of the said sub-article wit hin the
period therein specified, that company shall be considereddissolved and the Registrar may, at any time, apply to the cour t in
accordance with the provisions of Title II of Part V of this Ac t:
Provided that the court may, if it thinks fit, grant a further
                    COMP ANIES              [CAP. 386.       265
period not exceeding one year from the date of its decision in which
the commercial partnership may remedy the failure.
(9) A commercial partnership as is referred to in sub-article (4 )
shall make the changes necessary in order to comply with theprovisions of this Act by the 28th February, 1998.
(10) Any changes necessitated by virtue of sub-article (9) shall
be made:
(a) in the case of a partnership en nom collectif , with the
consent of a partner or partners having contributed atleast fifty per cent of the contributions made to thepartnership;
(b) in the case of a partnership en commandite , with the
consent of a general partner or partners havingcontributed at least fifty per cent of the contributionsmade by the general partners to the partnership, orholding at least fifty per cent of the nominal value ofthe shares of the partnership held by the generalpartners as the case may be, together with the consentof a limited partner or partners having contributed atleast fifty per cent of the contributions made by thelimited partners to the partnership or holding at leastfifty per cent of the nominal value of the shares heldby the limited partners as the case may be;
(c) in the case of a company, notwithstanding anything
contained in the Memorandum or Articles, by meansof a resolution, passed by a general meeting of thecompany called for the purpose, by -
(i) fifty per cent of the members represented at the
meeting and voting; or
(ii) a number of members having between them not
less than fifty per cent of the nominal value ofthe shares represented at that meeting, andvoting thereat;
and any provision relating to the quorum of members
at that meeting shall not apply.
The provisions of this sub-article shall not  apply to any
changes to the deed of partnership or to the Memorandum or
Articles, as the case may be, which are not strictly necessary in
order to comply with the provisions of this Act.
(11) An association en participation  constituted before the
appointed day shall comply with the provisions of this Act with in a
period of two years from the appointed day.
(12) Notwithstanding the other provisions of this article, artic le
127 shall come into effect on the appointed day.
(13) The provisions of Parts VII, VIII and IX of this Act shall,  in
regard to companies formed and registered under the Ordinance,come into effect as from the appointed day; and a commercialpartnership resulting from a conversion within the meaning of P art
VII, a new commercial partnership or an acquiring commercial
 266        CAP. 386. ]                         COMP ANIES
partnership within the meaning of Title I of Part VIII, a new
company or an acquiring company within the meaning of Title II of
Part VIII and recipient companies or new companies resulting fr om
a division within the meaning of Part IX, shall comply with andshall be regulated by this Act as from the date when the conver sion,
amalgamation or the division becomes effective in terms of this
Act, according to the case.
(14) A commercial partnership as is referred to in sub-article ( 4)
which fails to effect the changes necessary in order to comply with
the provisions of this Act before the 1st March 1998 shall beco me
liable to a penalty of one hundred and sixteen euro and forty-s even
cents (116.47), and for every day thereafter during which thedefault continues, to a further penalty of four euro and sixty- six
cents (4.66). The provisions of article 427(1) and (2) shall no t
apply to the penalties imposed under this sub-article.
(15) Notwithstanding the provisions of article 401(1)( d), until
such time as the instrument or resolution, or a copy thereof, g iving
effect to the changes necessitated by virtue of sub-article (4)  is
delivered to the Registrar for registration, and until such tim e as
any penalties that may be incurred by virtue of sub-article (14 ) are
paid, the Registrar shall not retain and register:
- in the case of a company, any resolution, notice or return
required to be registered under this Act, other than any resolu tion,
notice, return or other document required to be delivered to th e
Registrar in terms of the provisions of Title II of Part V and of
articles 122, 146, 183 and 184 of this Act; and
- in the case of any other commercial partnership any
instrument giving effect to any alteration or addition to the d eed of
partnership.
(16) The Minister may by order in the Gazette, establish a date,
being a date after the 31st December 1998, on which any companywhich fails to comply with the provisions of sub-article (4) sh all be
deemed to be a company which is not carrying on business or is not
in operation for the purposes of article 325. 
Transitional 
provisions as to winding up of 
commercial 
partnerships.429. (1) The dissolution of a commercial partnership
occurring before, on or within six months from the appointed da y
shall, after the appointed day, continue to be in accordance wi th the
provisions of the Ordinance and the consequential winding up ofsuch a commercial partnership shall be regulated accordingly:
Provided that, where, after the lapse of the two year period
referred  to  in  a r t i c l e  428( 4) ,  the  name  of  any  commercialpartnership to which this sub-article applies has not already b een
struck off the register, the Registrar may, at any time thereaf ter,
apply to the court for it to order that the winding up of the a ffairs of
that commercial partnership shall, from then onwards, be inaccordance with the provisions of this Act relating to winding up
by the court, and to appoint, where necessary, a liquidator orliquidators or substitute any existing liquidator or liquidator s to
carry out that winding up.
(2) Any dissolution of a commercial partnership occurring after
                    COMP ANIES              [CAP. 386.       267
the expiry of six months from the appointed day, shall be in
accordance with the provisions of this Act and the consequentia l
winding up of such a commercial partnership shall be regulatedaccordingly.
(3) The provisions of article 304 shall, in relation to companie s
formed and registered under the Ordinance, commence to apply onthe expiry of six months from the appointed day.
(4) The provisions of article 326 shall come into force on the
expiry of six months from the appointed day.
Cap. 13.(5) In relation to a company, bankruptcy proceedings
commenced before, on or within six months from the appointed da y
shall, after the appointed day, continue to be governed by theprovisions of Part III of the 
Commercial Code relating to
bankruptcy.
(6) The provisions of this article shall apply notwithstanding
anything contained in article 428.
Periods for the 
exercise of rights.430.  Where for the exercise of a right this Act establishes a
period shorter than that established by any other law, the peri od
established by this Act shall apply even to such rights as may have
arisen before the appointed day but shall commence to run as fr om
such day:
Provided that where, on the appointed day, the period which
is still to run under such other law is shorter than that estab lished
by this Act, reckoned as aforesaid, the period established by s uch
other law shall continue to apply.
Savings.
Amended by:
XXX. 1997.3;XXII. 2000. 104;IV . 2003.163;XIII. 2004.106.Cap. 330.431. (1) Notwithstanding anything to the contrary contained in
articles 428 and 429 - 
(a) offshore companies formed and registered under the
Malta Financial Services Authority Act shall, subject
to the provisions of the said Act, continue to beregulated by the Ordinance, and the provisions of this
Act shall not apply thereto, for such period or until
such date as the Minister may, by order in the Gazette,establish and the provisions of this Act shallcommence to apply to them from such date:
    Provided that the Minister may, by regulations
made under this Act, exempt such companies from anyone or more of the provisions of this Act, with suchqualifications and subject to such variations andconditions as may be specified therein;
 268        CAP. 386. ]                         COMP ANIES
Cap. 234. (b) private companies, other than offshore companies
referred to in paragraph ( a), whose objects and
activities are limited to the sole purposes of owning,managing, administering or operating ships and totransactions ancillary thereto, whether formed andregistered before, on or after the appointed day, shallbe regulated by the Ordinance and shall continue to beso regulated until such date, as the Minister may byorder in the Gazette establish, from when theprovisions of this Act or of any other law shallcommence to apply to them. In this paragraph "ships"shall have the meaning assigned to it by the 
Merchant
Shipping Act:
Provided that the Minister may establish
different dates on which the different provisions of this
Act shall commence to apply with respect to such
companies: 
   Provided further that, in his order, the Minister
may exempt such companies from any one or more ofthe provisions of this Act, with such qualifications and
under such conditions as may be specified in the order;
(c) the deed of partnership of a partnership en nom
collectif,  or of a partnership en commandite, formed
and registered under the Ordinance, shall not berequired to be amended so as to specify the value ofthe respective contribution of every partner in terms ofarticle 14(1)( e):
   Provided that where all the partners in a
partnership en nom collectif  and where all the partners,
both general and limited, in a partnership en
commandite , so agree, they may specify in the deed of
partnership the value of their respective contributionto the partnership; and
Cap. 383.(d) a commercial partnership which on the 1st March,
1998, is a controlled asset as defined in the Controlled
Companies (Procedure for Liquidation) Act, shall
continue to be regulated by the Ordinance until sixmonths after such commercial partnership shall haveceased to be a controlled asset in accordance with that
Act; and the provisions of article 428 shall apply to
such controlled company as if reference therein to the28th February 1998 were a reference to the last day ofthe period of six moths after the commercialpartnership shall have ceased to be a controlled asset,and a reference to the 1st March 1998 were a referenceto the first day immediately following such period, andthe provisions of sub-article (16) of the said article 428shall only be applicable after the 31st December of theyear in which the said period of six months would havelapsed.
(2) Save as otherwise provided in sub-article (1), in article 42 8
                    COMP ANIES              [CAP. 386.       269
and 429 or in any other provision of this Act, the Ordinance an d the
Commercial Partnerships (Special Provisions) Act, 1994, arehereby repealed:
Provided that notwithstanding their repeal - 
(a) anything that has lawfully been done by virtue of the
Ordinance and the Commercial Partnerships (SpecialProvisions) Act, 1994, shall remain in force, exceptinsofar as it is inconsistent with any of the provisionsof this Act;
(b) all regulations made under the Ordinance and under
the Commercial Partnerships (Special Provisions) Act,1994, shall remain in force and continue to have effectas if made under this Act, except insofar as any suchregulation is inconsistent with any of the provisions ofthis Act, until such time as they are repealed; and
(c) any liability to any penalty under any of the provisions
of the Ordinance shall continue to subsistnotwithstanding the repeal of the Ordinance. Theprovisions of article 401 shall apply also to penaltiesfixed by the Registrar under the Ordinance unlessproceedings for the recovery of such penalties havealready been instituted in accordance with theprovisions of the Ordinance before the appointed day.
 270        CAP. 386. ]                         COMP ANIES
 FIRST SCHEDULE 
(Article 75)
MODEL REGULATIONS FOR A LIMITED LIABILITY COMPANY 
PART I  REGULATIONS FOR THE MANAGEMENT OF A LIMITED 
LIABILITY COMPANY
Share capital and variation of rights
1. Without prejudice to any special rights previously conferred on the holders
of any existing shares or class of shares, any share in the com pany may be issued
with such preferred, deferred or other special rights or such r estrictions, whether in
regard to dividend, voting, return of capital or otherwise as t he company may from
time to time by ordinary resolution determine.
2. Subject to the provisions of article 115 of the Companies Act , (hereinafter
referred to as "the Act"), any preference shares may, with the sanction of an ordinary
resolution, be issued on the terms that they are, or at the opt ion of the company are,
liable to be redeemed on such terms and in such manner as the c ompany before the
issue of the shares may by extraordinary resolution determine.
3. If at any time the share capital is divided into different cl asses of shares, the
change of any shares from one class into another or the variati on of the rights
attached to any class (unless otherwise provided by the terms o f issue of the shares
of that class which is to be changed or the rights attached to which are to be varied,
according to the case) may, whether or not the company is being  wound up, be made
with the consent in writing of the holders of three-fourths of the issued shares of that
class, and the holders of three-fourths of the issued shares of  any other class affected
thereby. Such change or variation may also be made with the san ction of an
extraordinary resolution passed at a separate general meeting o f the holders of the
issued shares of that class and of an extraordinary resolution passed at a separate
general meeting of the holders of the issued shares of any othe r class affected
thereby. To every such separate general meeting the provisions of these regulations
relating to general meetings shall apply.
4. The company may exercise the power of paying commissions or o f making
discounts or allowances provided it complies with the requireme nts of article 113 of
the Act. Such commission may be satisfied by the payment of cas h or the allotment
of fully or partly paid shares or partly in one way and partly in the other.
5. Every person whose name is entered as a member in the registe r of members
shall be entitled without payment to receive one certificate fo r all his shares or
several certificates each for one or more of his shares upon pa yment of 20c for every
certificate after the first or such less sum as the directors s hall from time to time
determine. If a share certificate be defaced, lost or destroyed , it may be renewed on
payment of a fee of 20c or such less sum and on such terms, if any, as to evidence
and indemnity and the payment of out-of-pocket expenses of the company on
investigating evidence as the directors think fit.
Calls on shares
6. The directors may from time to time make calls upon the membe rs in respect
of any moneys unpaid on their shares (whether on account of the  nominal value of
the shares or by way of premium) and not by the conditions of a llotment thereof
made payable at fixed times, provided no call shall exceed one- fourth of the nominal
                    COMP ANIES              [CAP. 386.       271
value of the share or be payable at less than one month from th e date fixed for the
payment of the last preceding call, and each member shall (subj ect to receiving at
least fourteen days’ notice specifying the time or times and pl ace of payment) pay to
the company, at the time or times and place so specified, the a mount called on his
shares. A call may be revoked or postponed as the directors may  determine.
7. The joint holders of a share shall be jointly and severally l iable to pay all
calls in respect thereof.
8. If a sum called in respect of a share is not paid before or o n the date
appointed for payment thereof, the person from whom the sum is due shall pay
annual interest thereon from the day appointed for payment ther eof to the time of
actual payment at such rate not exceeding two percentage points  over the Central
Bank of Malta minimum discount rate as the directors may determ ine, but the
directors shall be at liberty to waive payment of such interest  wholly or in part.
9. Any sum which by the terms of issue of a share becomes payabl e on
allotment or at any fixed date, whether on account of the nomin al value of the share
or by way of premium, shall for the purposes of these regulatio ns be deemed to be a
call duly made and payable on the date on which, by the terms o f issue, the same
becomes payable, and in case of non-payment, all the relevant p rovisions of these
regulations as to payment of interest and expenses, forfeiture or otherwise shall
apply as if such sum had become payable by virtue of a call dul y made and notified.
10. The directors may, on the issue of shares, differentiate bet ween the holders
as to the amount of calls to be paid and the times of payment.
11. The directors may, if they think fit, receive from any membe r willing to
advance the same, all or any part of the moneys uncalled and un paid upon any shares
held by him, and upon all or any of the moneys so advanced may (until the same
would, but for such advance, become payable) pay annual interes t at such rate not
exceeding two percentage points over the Central Bank of Malta minimum discount
rate, as may be agreed upon between the directors and the membe rs paying such sum
in advance.
Transfer and transmission of shares
12. The instrument of transfer of any share shall be executed by  or on behalf of
the transferor and transferee and the transferor shall be deeme d to remain a holder of
the share until the name of the transferee is entered in the re gister of members in
respect thereof.
13. Subject to such of the restrictions of these regulations as may be applicable,
any member may transfer all or any of his shares by instrument in writing in any
usual or common form or any other form which the directors may approve.
14. The directors may decline to register the transfer of a shar e (not being a fully
paid share) to a person of whom they shall not approve.
15. The directors may also decline to recognise any instrument o f transfer
unless -
(a) the instrument of transfer is accompanied by the certificate o f the shares
to which it relates, and such other evidence as the directors m ay
reasonably require to show the right of the transferor to make the
transfer; and
(b) the instrument of transfer is in respect of only one class of share.
16. The registration of transfers may be suspended at such times  and for such
periods as the directors may from time to time determine, provi ded always that such
 272        CAP. 386. ]                         COMP ANIES
registration shall not be suspended for more than thirty days i n any year.
17. Any person becoming entitled to a share in consequence of th e death of a
member may, upon such evidence being produced as may from time to time properly
be required by the directors and subject as hereinafter provide d, elect either to be
registered himself as holder of the share or to have some perso n nominated by him
registered as the transferee thereof, but the directors shall, in either case, have the
same right to decline or suspend registration as they would hav e had in the case of a
transfer of the share by that member before his death.
18. If the person so becoming entitled shall elect to be registe red himself, he
shall deliver or send to the company a notice in writing signed  by him stating that he
so elects. If he shall elect to have another person registered he shall testify his
election by executing to that person a transfer of the share.
19. All the limitations, restrictions and provisions of these re gulations relating
to the right to transfer and the registration of transfers of s hares shall be applicable
to any such notice or transfer as aforesaid as if the death of the member had not
occurred and the notice or transfer were a transfer signed by t hat member.
20. A person becoming entitled to a share by reason of the death  of the holder
shall be entitled to the same dividends and other advantages to  which he would be
entitled if he were the registered holder of the share, except that he shall not, before
being registered as a member in respect of the share, be entitl ed in respect of it to
exercise any right conferred by membership in relation to meeti ngs of the company.
21. Notwithstanding the provisions of regulation 20, the directo rs may at any
time give notice requiring any person referred to in that regul ation to elect either to
be registered himself or to transfer the share, and if the noti ce is not complied with
within ninety days the directors may thereafter withhold paymen t of all dividends,
bonuses or other moneys payable in respect of the share until t he requirements of the
notice have been complied with.
Forfeiture or surrender of shares
22. If a member fails to pay any call or instalment of a call on  the day appointed
for payment thereof, the directors may, at any time thereafter during such time as any
part of the call or instalment remains unpaid, require payment of so much of the call
or instalment as is unpaid, together with any interest which ma y have accrued, by
means of a notice which shall also name a further day (not earl ier than the expiration
of fourteen days from the date of service of the notice) on or before which the
payment required by the notice is to be made, and shall state t hat in the event of non-
payment, at or before the time appointed, the shares in respect  of which the call was
made will be liable to be forfeited.
23. If the requirements specified in any such notice as aforesai d are not
complied with, any share in respect of which the notice has bee n given may at any
time thereafter, before the payment required by the notice has been made, be
forfeited by a resolution of the directors to that effect, or o therwise be surrendered in
favour of the company by the member to whom the said notice is addressed, if the
directors of the company accept such surrender.
24. A forfeited or a surrendered share may be sold or otherwise disposed of on
such terms and in such manner as the directors think fit, and t he company may
receive the consideration, if any, given for the share on any s ale or disposition
thereof and may execute a transfer of the share in favour of th e person to whom the
share is sold or disposed of, who shall thereupon be registered  as the holder of the
share. At any time before a sale or disposition the forfeiture or surrender may be
cancelled on such terms as the directors think fit.
                    COMP ANIES              [CAP. 386.       273
25. A person whose shares have been forfeited or who has surrend ered his
shares to the company shall cease to be a member in respect of the forfeited or
surrendered shares, but shall, notwithstanding, remain liable t o pay to the company
all moneys which, at the date of the forfeiture or surrender, w ere payable by him to
the company in respect of the shares; but his liability shall c ease if and when the
company shall have received payment in full of all such moneys in respect of the
shares.
Conversion of shares into stock
26. The company may by ordinary resolution convert any paid up s hares into
stock, and re-convert any stock into paid up shares of any deno mination.
27. The holders of stock may transfer the same, or any part ther eof, in the same
manner and subject to the same regulations, as and subject to w hich the shares from
which the stock arose might previously to conversion have been transferred, or as
near thereto as circumstances permit; and the directors may fro m time to time fix the
minimum amount of stock transferable but so that such minimum s hall not exceed
the nominal amount of the shares from which the stock arose.
28. The holders of stock shall, according to the amount of stock  held by them,
have the same rights, privileges and advantages as regards divi dends, voting at
meetings of the company and other matters as if they held the s hares from which the
stock arose, but no such privilege or advantage (except partici pation in the dividends
and profits of the company and in the assets on winding up) sha ll be conferred by
any amount of stock which would not, if existing in share, have  conferred that
privilege or advantage.
29. Such of the regulations of the company as are applicable to paid up shares
shall apply to stock, and the words "share" and "shareholder" t herein shall include
"stock" and "stockholder".
General meetings
30. Subject to the provisions of the Act the annual general meet ings shall be
held at such time and place as the directors shall appoint.
31. The directors may, whenever they think fit, convene an extra ordinary
general meeting, and extraordinary general meetings shall also be convened on such
requisition, or, in default, may be convened by such requisitio nists, as provided by
article 129 of the Act.
32. If at any time there are not in Malta sufficient directors c apable of acting to
form a quorum, any director or any two members of the company m ay convene an
extraordinary general meeting in the same manner, as nearly as possible, as that in
which meetings may be convened by the directors.
Notice of general meetings
33. A general meeting of the company shall be called by fourteen  days’ notice in
writing at least. The notice shall be exclusive of the day on w hich it is served or
deemed to be served and of the day for which it is given, and s hall specify the place,
the day and the hour of meeting and, in case of special busines s, the general nature
of that business, and shall be given, in the manner hereinafter  mentioned or in such
other manner, if any, as may be prescribed by the company in ge neral meeting, to
such persons as are, by the Act and under the regulations of th e company, entitled to
receive such notices from the company:
Provided that a meeting of the company shall, notwithstanding t hat it is called by
shorter notice than that specified in this regulation, be deeme d to have been duly
 274        CAP. 386. ]                         COMP ANIES
called if it is so agreed by all the members entitled to attend  and vote thereat.
34. The accidental omission to give notice of a meeting to, or t he non-receipt of
notice of a meeting by, any person entitled to receive notice s hall not invalidate the
proceedings at that meeting.
Proceedings at general meetings
35. All business shall be deemed special that is transacted at a n extraordinary
general meeting, and also all that is transacted at an annual g eneral meeting, with the
exception of declaring a dividend, the consideration of the ann ual accounts and the
reports of the directors and auditors, the election of director s in the place of those
retiring and the appointment of, and the fixing of the remunera tion of, the auditors.
36. No business shall be transacted at any general meeting unles s a quorum of
members is present at the time when the meeting proceeds to bus iness; save as herein
otherwise provided, a member or members present in person or by  proxy holding in
aggregate not less than one tenth of the paid up share capital of the company
carrying the right to attend and vote at general meetings of th e company at the date
of the holding of the meeting, shall be a quorum.
37. If within half an hour from the time appointed for the meeti ng a quorum is
not present, the meeting, if convened by the requisition of mem bers, shall be
dissolved; in any other case it shall stand adjourned to the sa me day in the next
week, at the same time and place or to such other day and at su ch other time and
place as the directors may determine, and if at the adjourned m eeting a quorum is not
present within half an hour from the time appointed for the mee ting, the member or
members present shall be a quorum.
38. The chairman, if any, of the board of directors shall presid e as chairman at
every general meeting of the company, or if there is no such ch airman, or if he shall
not be present within fifteen minutes after the time appointed for the holding of the
meeting or is unwilling to act, the directors present shall ele ct one of their number to
be chairman of the meeting.
39. If at any meeting no director is willing to act as chairman or if no director is
present within fifteen minutes a fter the time appointed for hol ding the meeting, the
members present shall choose one of their number to be chairman  of the meeting.
40. The chairman may, with the consent of any meeting at which a  quorum is
present (and shall if so directed by the meeting), adjourn the meeting from time to
time and from place to place, but no business shall be transact ed at any adjourned
meeting other than the business left unfinished at the meeting from which the
adjournment took place. When a meeting is adjourned for thirty days or more, notice
of the adjourned meeting shall be given as in the case of an or iginal meeting. Save as
aforesaid it shall not be necessary to give any notice of an ad journed meeting or of
the business to be transacted at such meeting.
41. At any general meeting a resolution put to the vote of the m eeting shall be
decided on a show of hands unless a poll is (before or on the d eclaration of the result
of the show of hands) demanded -
(a) by the chairman; or
(b) by at least three members present in person or by proxy; or
(c) by any member or members present in person or by proxy and
representing not less than one-tenth of the total voting rights  of all the
members having the right to vote at the meeting; or
(d) by a member or members holding shares in the company conferrin g a
                    COMP ANIES              [CAP. 386.       275
right to vote at the meeting being shares on which an aggregate  sum has
been paid up equal to not less than one-tenth of the total sum paid up on
all the shares conferring that right.
Unless a poll be so demanded a declaration by the chairman that  a resolution has
on a show of hands been carried or carried unanimously, or by a  particular majority,
or lost and an entry to that effect in the book containing the minutes of the
proceedings of the company shall be conclusive evidence of the fact without proof of
the number or proportion of the votes recorded in favour of or against such
resolution:
Provided that where a resolution requires a particular majority  in value, the
resolution shall not be deemed to have been carried on a show o f hands by the
required majority unless there be present at that meeting, whet her in person or by
proxy, a number of members holding in the aggregate the require d majority as
aforesaid.
The demand for a poll may be withdrawn
42. Except as provided in regulation 44, if a poll is duly deman ded it shall be
taken in such manner as the chairman directs and the result of the poll shall be
deemed to be the resolution of the meeting at which the poll wa s demanded.
43. In the case of an equality of votes, whether on a show of ha nds or on a poll,
the chairman of the meeting at which the show of hands takes pl ace or at which the
poll is demanded, shall be entitled to a second or casting vote .
44. A poll demanded on the election of a chairman or on a questi on of
adjournment shall be taken forthwith. A poll demanded on any ot her question shall
be taken at such time as the chairman of the meeting directs, a nd any business other
than that upon which a poll has been demanded may be proceeded with pending the
taking of the poll.
Votes of members
45. Subject to any rights or restrictions for the time being att ached to any class
or classes of shares, on a show of hands every member present i n person shall have
one vote, and on a poll every member shall have one vote for ea ch share of which he
is the holder. On a poll votes may be given either personally o r by proxy.
46. No member shall be entitled to vote at any general meeting u nless all calls
or other sums presently payable by him in respect of shares in the company have
been paid.
47. No objection shall be raised to the qualification of any vot er except at the
meeting or adjourned meeting at which the vote objected to is g iven or tendered, and
every vote not disallowed at such meeting shall be valid for al l purposes. Any such
objection made in due time shall be referred to the chairman of  the meeting, whose
decision shall be final and conclusive.
48. The instrument appointing a proxy and the power of attorney or other
authority, if any, under which it is signed or a notarially cer tified copy of that power
or authority shall be deposited at the registered office of the  company or at such
other place in Malta as is specified for that purpose in the no tice convening the
meeting, not less than twenty-four hours before the time for ho lding the meeting or
adjourned meeting, at which the person named in the instrument proposes to vote, or,
in the case of a poll, not less than twenty-four hours before t he time appointed for
the taking of the poll, and in default the instrument of proxy shall not be treated as
valid.
 276        CAP. 386. ]                         COMP ANIES
49. An instrument appointing a proxy shall be in the following f orm or a form as
near thereto as circumstances permit:.......................... ............................(name of
the company)
"I/We.......................................................... .....
of ............................................................ .................................................
residing at ................................................... ......................................................
being a member/members of the above-named company, hereby appoi nt
..................................................... of ...... ...................................................... or
failing him...................................... of .......... .................................................. as
my/our proxy to vote for me/us on my/our behalf at the (annual or extraordinary, as
the case may be)  general meeting of the company, to be held on the
................................... day of .................... ............. 19 ......., and at any adjournment
thereof.
Signed this ................ day of   ......................... ... 19.......
This form is to be used in favour of/against* the resolution. Unless otherwise
instructed, the proxy will vote as he thinks fit.".
*Strike out whichever is not desired. 
Directors
50. The remuneration of the directors shall from time to time be  determined by
the company in general meeting. Such remuneration shall be deem ed to accrue from
day to day. The directors may also be paid all travelling, hote l and other expenses
properly incurred by them in attending and returning from meeti ngs of the directors
or any committee of the directors or general meetings of the co mpany or in
connection with the business of the company.
51. The shareholding qualification for directors may be fixed by  the company in
general meeting, and unless and until so fixed no qualification  shall be required.
Powers and duties of directors
52. The directors shall exercise their powers subject to any of these regulations,
to the provisions of the Act and to such regulations, being not  inconsistent with the
aforesaid regulations or provisions, as may be prescribed by th e company in general
meeting; but no regulation made by the company in general meeti ng shall invalidate
any prior act of the directors which would have been valid if t hat regulation had not
been made.
53. The directors shall have power to appoint any person to be t he attorney of
the company for such purposes and with such powers, authorities  and discretion (not
exceeding those vested in or exercisable by the directors under  these regulations)
and for such period and subject to such conditions as they may think fit, and any
such powers of attorney may contain such provisions for the pro tection and
convenience of persons dealing with any such attorney as the di rectors may think fit,
and may also authorise any such attorney to delegate all or any  of the powers,
authorities and discretions vested in him.
54. A director shall not vote at a meeting of the directors in r espect of any
contract or arrangement in which he is interested, and if he sh all do so his vote shall
not be counted, nor shall he be counted in the quorum present a t the meeting, but
neither of these prohibitions shall apply to - 
(a) any arrangement for giving any director any security or indemn ity in
                    COMP ANIES              [CAP. 386.       277
respect of money lent by him to or obligations undertaken by hi m for
the benefit of the company; or
(b) any arrangement for the giving by the company of any security to a third
party in respect of a debt or obligation of the company for whi ch the
director himself has assumed responsibility in whole or in part  under a
guarantee or indemnity or by the deposit of a security; or
(c) any contract by a director to subscribe for or underwrite shar es or
debentures of the company; or
(d) any contract or arrangement with any other company in which he  i s
interested only as an officer of the company or as a holder of shares or
other securities,
and these prohibitions may at any time be suspended or relaxed to any extent, and
either generally or in respect of any particular contract, arra ngement or transaction,
by the company in general meeting.
55. The directors shall cause minutes to be made in books provid ed for the
purpose -
(a) of all appointments of officers made by the directors;
(b) of the names of the directors present at each meeting of the d irectors
and of any committee of the directors;
(c) of all resolutions and proceedings at all meetings of the comp any, and of
the directors, and of committees of directors.
56. The directors on behalf of the company may pay a gratuity or  pension or
allowance on retirement to any director who has held any other salaried office or
place of profit with the company or to his widow or dependants and may make
contributions to any fund and pay premiums for the purchase or provision of any
such gratuity, pension or allowance.
Rotation of Directors
57. At the first annual general meeting of the company all the d irectors shall
retire from office, and at the annual general meeting in every subsequent year one-
third of the directors for the time being or, if their number i s not three or a multiple
of three, then the number nearest one-third, shall retire from office.
58. The directors to retire in every year shall be those who hav e been longest in
office since their last election, but as between persons who be came directors on the
same day those to retire shall (unless they otherwise agree amo ng themselves) be
determined by lot.
59. A retiring director shall be eligible for re-election.60. The company at the meeting at which a director retires in ma nner aforesaid
may fill the vacated office by electing a person thereto.
61. No person other than a director retiring at the meeting shal l unless
recommended by the directors be eligible for election to the of fice of director at any
general meeting unless not less than three nor more than fourte en days before the
date appointed for the meeting there shall have been left at th e registered office of
the company notice in writing, signed by a member duly qualifie d to attend and vote
at the meeting for which such notice is given, of his intention  to propose such person
for election, and also notice in writing signed by that person of his willingness to be
elected.
 278        CAP. 386. ]                         COMP ANIES
Proceedings of directors
62. The directors may meet together for the despatch of business , adjourn and
otherwise regulate their meetings, as they think fit. Questions  arising at any meeting
shall be decided by a majority of votes. In case of an equality  of votes, the chairman
shall have a second or casting vote. A director may, and the co mpany secretary on
the requisition of a director shall, at any time summon a meeti ng of the directors. It
shall not be necessary to give notice of a meeting of directors  to any director for the
time being absent from Malta.
63. The quorum necessary for the transaction of the business of the directors
may be fixed by the directors, and unless so fixed shall be two .
64. The continuing directors may act notwithstanding any vacancy  in their body,
but, if and so long as their number is reduced below the number  fixed by or pursuant
to the regulations of the company as the necessary quorum of di rectors, the
continuing directors or director may act for the purpose of inc reasing the number of
directors to that number, or of summoning a general meeting of the company, but for
no other purpose.
65. The directors may elect a chairman of their meetings and det ermine the
period for which he is to hold office; but if no such chairman is elected, or if at any
meeting the chairman is not present within five minutes after t he time appointed for
holding the same, the directors present may choose one of their  number to be
chairman of the meeting.
66. A resolution in writing, signed by all the directors for the  time being entitled
to receive notice of a meeting of the directors, shall be as va lid and effectual as if it
had been passed at a meeting of the directors duly convened and  held.
Delegation of directors’ powers
67. The directors may from time to time appoint a managing direc tor or a
director or directors holding any other executive office or off ices from amongst
themselves delegating to him or them any of the powers provided  in regulation 70.
68. Each such appointment shall be for such period and on such t erms as the
directors think fit, and, subject to the terms of any agreement  entered into in any
particular case, the directors may revoke such appointment. Any  director so
appointed shall not, whilst holding that office, be subject to retirement by rotation or
be taken into account in determining the rotation or retirement  of directors, but his
appointment shall be automatically determined if he ceases for any reason to be a
director.
69. A managing director or director holding any other executive office shall
receive such remuneration as the directors, subject to the appr oval of the company in
general meeting, may from time to time determine.
70. The directors may delegate to any managing director, or to a ny director
holding any other executive office, any of the powers exercisab le by them upon such
terms and conditions and with such restrictions as they may thi nk fit, and either
collaterally with or to the exclusion of their own powers and m ay from time to time
revoke, withdraw or vary any of such powers.
71. The directors may also appoint a committee consisting of one  of more
persons selected from among themselves delegating to it any of their powers. Any
such delegation may be made subject to any condition or require ment as the directors
may impose and may be made either collaterally with or to the e xclusion of their
own powers, and the directors may from time to time revoke, wit hdraw, alter or vary
all or any of such powers. Any such committee shall, subject to  any of the said
                    COMP ANIES              [CAP. 386.       279
conditions or requirements, regulate its own proceedings, in so  far as possible in like
manner as if its meetings were meetings of the directors.
Company Secretary
72. Without prejudice to the provisions of the Act regulating th e appointment
and functions of the company secretary, the appointment or repl acement of the
company secretary and the conditions of holding office shall be  determined by the
directors. The company secretary shall be responsible for keepi ng:
- the minute book of general meetings of the company; - the minute book of meetings of the board of directors; - the register of members;- the register of debentures; and- such other registers and records as the company secretary may be required to
keep by the board of directors.
The company secretary shall:
- ensure that proper notices are given of all meetings; and- ensure that all returns and other documents of the company are  prepared and
delivered in accordance with the requirements of the Act.
Dividends and reserve
73. The company in general meeting may declare dividends, but no  dividend
shall exceed the amount recommended by the directors.
74. The directors may from time to time pay to the members such interim
dividends as appear to the directors to be justified by the pro fits of the company.
75. The directors may, before recommending any dividend, set asi de out of the
profits of the company such sums as they think proper as a rese rve or reserves which
shall, at the discretion of the directors, be applicable for an y purpose to which the
profits of the company may be properly applied, and pending suc h application may,
at the like discretion, either be employed in the business of t he company or be
invested in such investments, other than shares of the company,  as the directors may
from time to time think fit. The directors may also without pla cing the same to
reserve carry forward any profits which they may think prudent not to divide.
76. Subject to the rights of persons, if any, entitled to shares  with special rights
as to dividend, all dividends shall be declared and paid accord ing to the amounts
paid or credited as paid on the shares in respect whereof the d ividend is paid, but no
amount paid or credited as paid on a share in advance of calls shall be treated for the
purposes of this regulation as p aid on the share. All dividends  shall be apportioned
and paid proportionately to the amounts paid or credited as pai d on the shares during
any portion or portions of the period in respect of which the d ividend is paid; but if
any share is issued on terms providing that it shall rank for d ividend as from a
particular date such share shall rank for dividend accordingly.
77. The directors may deduct from any dividend payable to any me mber all
sums of money, if any, presently payable by him to the company on account of calls
or otherwise in relation to the shares of the company.
78. No dividend shall bear interest against the company.
Accounts
79. Subject to the provisions of article 180 of the Act, the dir ectors shall from
 280        CAP. 386. ]                         COMP ANIES
time to time determine whether and to what extent and at what t imes and places and
under what conditions or regulations the annual accounts and ac counting records of
the company or any of them shall be open to the inspection of m embers not being
directors, and no member, not being a director, shall have any right of inspecting any
such account or record or other document of the company except as conferred by law
or authorised by the directors or by the company in general mee ting.
Capitalisation of profits
80. The company in general meeting may upon the recommendation o f the
directors resolve that it is desirable to capitalise any part o f the amount for the time
being standing to the credit of any of the company’s reserve ac counts or to the credit
of the profit and loss account or otherwise available for distr ibution, and accordingly
that such sum be set free for distribution amongst the members who would have been
entitled thereto if distributed by way of dividend and in the s ame proportions on
condition that the same be not paid in cash but be applied eith er in or towards paying
up any amounts for the time being unpaid on any shares held by such members
respectively or paying up in full unissued shares or debentures  of the company to be
allotted and distributed credited as fully paid up to and among st such members in the
proportion aforesaid, or partly in the one way and partly in th e other, and the
directors shall give effect to such resolution:
Provided that a share premium account and a capital redemption reserve may, for
the purposes of this regulation, only be applied in the paying up of unissued shares to
be issued to members of the company as fully paid bonus shares:
Provided further that the directors may in giving effect to suc h resolution make
such provision by payment in cash or otherwise as they think fi t for the case of
shares or debentures becoming distributable in fractions.
Notice 
81. A notice may be given by the company to any member either pe rsonally or
by sending it by post to him or to his registered address, or, if he has no registered
address in Malta, to the address, if any, in Malta supplied by him to the company for
the giving of notice to him. Where a notice is sent by post, se rvice of the notice shall
be deemed to be effected by properly addressing, prepaying and posting a letter
containing the notice, and to have been effected in the case of  a notice of a meeting
at the expiration of forty-eight hours after the letter contain ing the same is posted,
and in any other case at the time at which the letter would be delivered in the
ordinary course of post.
82. Notice of every general meeting shall be given in the manner  hereinbefore
authorised to - 
(a) every registered member except those members who, having no
registered address in Malta, have not supplied to the company a n
address in Malta for the giving of notices to them; and
(b) the auditor for the time being of the company.
No other person shall be entitled to receive notices of general  meetings.
Indemnity 
83. Every managing director, director holding any other executiv e office or
other director, and every agent, auditor or company secretary a nd in general any
officer for the time being of the company shall be indemnified out of the assets of
the company against any liability incurred by him in defending any proceedings in
which judgment is given in his favour or in which he is acquitt ed.
                    COMP ANIES              [CAP. 386.       281
1. The regulations contained in Part I of this Schedule (with th e exception of
regulation 14) shall apply.
2. The company is a private company and accordingly -
(a) the right to transfer shares is restricted in a manner hereina fter
prescribed; 
(b) the number of members of the company is limited to fifty; and
(c) any invitation to the public to subscribe for any shares or de bentures of
the company is prohibited.
3. The directors may, in their absolute discretion and without a ssigning any
reason therefor, decline to register any transfer of any share,  whether or not it is a
fully paid share.
4. The directors may at any time require any person whose name i s entered in
the register of members of the company to furnish them with any  information,
supported, if the directors so require, by an affidavit, which they may consider
necessary for the purposes of d etermining whether or not the co mpany satisfies the
conditions of qualification as an exempt company mentioned in s ub-article (2) of
article 21 1 of the Act.PART II - REGULATIONS FOR THE MANAGEMENT 
OF A PRIV ATE COMPANYAmended by:
XI.2017.17
 282        CAP. 386. ]                         COMP ANIES
MATTERS TO BE SPECIFIED IN A PROSPECTUS OF A COMPANY 
CONSTITUTED IN A MEMBER STATE OR EEA STATE AND 
REQUIREMENTS FOR ITS APPROV AL AND PUBLICATION
(Chapter III of Title I of Part V of this Act) 
General references 1. References herein to the issuing company are references to th e company
referred to in article 89.
References herein to the "base prospectus" are references to a prospectus
containing all relevant information as specified in paragraphs 4, 5 and 26 in case
there is a supplement, concerning the issuer and the securities  to be offered to the
public, and, at the choice of the issuer, the final terms of th e offering.
References herein to "ESMA" are references to the European Secu rities and
Markets Authority established by 
Regulation (EU) No 1095/2010 of the European
Parliament and of the Council of 24 November 2010.
References herein to the "securities note" are references to th e document
containing the information concerning the securities offered to  the public.
References herein to the share registration document are to the  document which
contains the information relating to the issuer as laid down in  Annex  I  of
Commission Regulation (EC) No 809/2004  implementing the Prospectus Directive .
For the purposes of Part A of this Schedule, Commission Regulation (EC) No 809/
2004 implementing the Prospectus Directive as regards information contained in
prospectuses as well as the format, incorporation by reference and publication of
such prospectuses and dissemination of advertis ements shall also apply and, in terms
of the Prospectus Directive , the provisions of paragraphs 6 to 19 of this Schedule have
been included for indicative purposes.
General principles 2. The issuer or offeror may draw up a prospectus as a single do cument or
separate documents. A prospectus composed of separate documents  shall divide the
required information into: 
(a) a registration document containing the information relating to  the issuer
as provided in paragraph 17;
(b) a securities note containing information relating to the secur ities offered
to the public as provided in paragraph 18; and
(c) a summary note as provided in paragraph 19.
3. Certain information specified in this Schedule may be omitted  from the
prospectus if: 
(a) disclosure of such information would be contrary to the public  interest;
or 
(b) disclosure of such information would be seriously detrimental to theSECOND SCHEDULE
Amended by:
IV . 2003.164;L.N. 390 of 2005;IX. 2008.41;L.N. 171 of 2012;L.N. 337 of 2012.PART A
(Article 90)
                    COMP ANIES              [CAP. 386.       283
issuer, provided that the omission would not be likely to misle ad the
public with regard to facts and circumstances essential for an informed
assessment of the issuer, offeror or guarantor, if any, and of the rights
attached to the securities to which the prospectus relates; or
(c) such information is of minor importance only for a specific of fer and is
not such as will influence the assessment of the financial posi tion and
prospects of the issuer, offeror or guarantor, if any; or
(d) disclosure of such information is found to be inappropriate to  the
issuer’s sphere of activity or its legal form or to the securit ies being
offered, in which case the prospectus shall contain equivalentinformation when available; or
(e) disclosure which relates to information about the guarantor of  the securities
being offered where the guarantor is a Member State or an EEA S tate.
PART I - PROSPECTUS
4. Without prejudice to paragraph 3, the prospectus shall contai n all
information which, according to the particular nature of the is suer and of the
securities offered to the public is necessary to enable investo rs to make an informed
assessment of the assets and liabilities, financial position, p rofit and losses, and
prospects of the issuer and of any guarantor, and of the rights  attaching to such
securities. This information shall be presented in an easily an alysable and
comprehensible form.
5. (1) The prospectus shall contain information concerning the is suer and the
securities to be offered to the public. It shall also include a  summary. The summary
shall, in brief and non-technical language, provide key informa tion in the language in
which the prospectus was origin ally drawn up. The format and co ntent of the summary
of the prospectus shall provide, in conjunction with the prospe ctus, appropriate
information about essential elements of the securities concerne d in order to aid investors
when considering whether to invest in such securities. The summ ary shall be drawn up in
a common format in order to facilitate comparability of the sum maries of similar
securities and its content should convey the key information of  the securities concerned
in order to aid investor when considering whether to invest in such securities. The
summary shall also contain a warning that:
(a) it should be read as an introduction to the prospectus;
(b) any decision to invest in the securities should be based on co nsideration
of the prospectus as a whole by the investor;
(c) where a claim relating to the information contained in a prosp ectus is
brought before a court, the plaintiff investor might, if the pr ospectus is
not drawn up in the English language, have to bear the costs oftranslating the prospectus before the legal proceedings are ini tiated; and
(d) without prejudice to article 94 of this Act, civil liability a ttaches to
those persons who have tabled the summary including any transla tion
thereof, and applied for its notification.
(2) For the purposes of this paragraph "key information" means e ssential and
appropriately structured information which is to be provided to  investors with a view
to enabling them to understand the nature and the risks of the issuer, guarantor and
the securities that are being offered to them and, without prej udice to the provisions
of paragraph 5(1)( a) of this Schedule, to decide which offers of securities to con sider
further. In the light of the offe r and securities concerned, th
e key information shall
include the following elements:
 284        CAP. 386. ]                         COMP ANIES
(a) a short description of the risks associated with and essential
characteristics of the issuer and any guarantor, including the assets,
liabilities and financial position;
(b) a short description of the risk associated with and essential
characteristics of the investment in the relevant security, inc luding any
rights attaching to the securities;
(c) general terms of the offer, including estimated expenses charg ed to the
investors by the issuer or the offeror;
(d) details of the admission to trading;
(e) reasons for the offer and use of proceeds.
(3) ( a) The following types of securities may be issued, at the choice  of the
issuer or offeror, by means of a base prospectus containing all  relevant
information concerning the issuer and the securities offered to  the
public: 
(i) non-equity securities issued under an offering programme;
(ii) non-equity securities issued in a continuous or repeated ma nner
by credit institutions where:
- the sums deriving from the issue of the said securities are
placed in assets which guarantee the settlement of theliability deriving from securities until their maturity date;
- in the event of the insolvency of the related credit instituti on,
the said sums are primarily intended to repay the capital andinterest falling due, without prejudice to the provisions of
Directive 2001/24/EC of the European Parliament and of the
Council of 4 April 2001 on the reorganisation and windingup of credit institutions.
(b) The information given in the base prospectus shall be suppleme nted, in
accordance with the provisions of paragraph 26, with updatedinformation on the issuer and on the securities to be offered t o the
public.
(c) If the final terms of the offer are not included in either the  base prospectus
or a supplement, the final terms shall be provided to investors , filed with
the Registrar and communicated by the issuer to the competent a uthority of
the host Member State or States as soon as practicable and, if possible, in
advance of the beginning of the public offer. The final terms s hall contain
only information that relates to the securities note and shall not be used to
supplement the base prospectus.
Summary  
6. Without prejudice to paragraph 5, the summary shall briefly p rovide the
most important information included in the prospectus, covering  at least the
following items: 
(a) identity of directors, senior management, advisers and auditor s;
(b) offer statistics and expected timetable;
(c) key information concerning selected financial data; capitalisa tion and
indebtedness; reasons for the offer and use of proceeds; risk f actors;
(d) information concerning the issuer -
- history and development of the issuer
                    COMP ANIES              [CAP. 386.       285
- business overview;
(e) operating and financial review and prospects -
- research and development, patents and licences, etc.
- trends;
(f) directors, senior management and employees;
(g) major shareholders and related-party transactions;
(h) financial information -
- consolidated statement and other financial information
- significant changes;
(i) details of the offer -
- offer
- plan for distribution- markets- selling shareholders- dilution (equity securities only)- expenses of the issue;
(j) additional information -
- share capital
- memorandum and articles of association- documents on display.
Identity of directors, senior management, advisers and auditors  
7. Information shall be given regarding names, functions and oth er information
necessary to identify the persons responsible for drawing up th e prospectus and
those responsible for auditing the financial statements. 
Offer statistics and expected timetable 8. The following key information shall be provided regarding the  conduct of
any offer and the identification of important dates relating to  that offer: 
(a) offer statistics;
(b) method and expected timetable. 
Key information 9. Summarised key information shall be provided about the compan y’s
financial condition, capitalisation and risk factors. If the fi nancial statements
included in the document are restated to reflect material chang es in the company’s
group structure or accounting policies, the selected financial data must also be
restated. Information shall be given on the following: 
(a) selected financial data;
(b) capitalisation and indebtedness;
(c) reasons for the offer and use of proceeds;
(d) risk factors.
Information on the company 10. Information shall be provided about the company’s business o perations, the
products it makes or the services it provides, and the factors which affect the
 286        CAP. 386. ]                         COMP ANIES
business. It is also intended to provide information regarding the adequacy and
suitability of the company’s properties, plant and equipment, a s well as its plans for
future capacity increases or decreases. Information shall be gi ven on: 
(a) history and development of the company;
(b) business overview;
(c) organisational structure;
(d) property, plant and equipment.
Operating and financial review and prospects 11. The management shall provide an explanation of factors that have affected
the company’s financial condition and results of operations for  the historical periods
covered by the financial statements and management’s assessment  of factors and
trends which are expected to have a material effect on the comp any’s financial
condition and results of operations in future periods. Informat ion shall be given on: 
(a) operating results;
(b) liquidity and capital resources;
(c) research and development, patents and licences, etc.;
(d) trends.
Directors, senior management and employees 12. Information on the following shall be provided concerning th e company’s
directors and managers that will allow investors to assess thei r experience,
qualifications and levels of remuneration, as well as their rel ationship with the
company: 
(a) directors and senior management;
(b) remuneration;
(c) board practices;
(d) employees;
(e) share ownership.
Major shareholders and related-party transactions 13. Information shall be provided regarding the major shareholde rs and others
that may control or have an influence on the company as well as  information
regarding transactions the company has entered into with person s affiliated with the
company and whether the terms of such transactions are fair to the company, as
follows: 
(a) major shareholders;
(b) related-party transactions;
(c) interests of experts and advisers.
Financial Information 14. Information on the following shall be provided specifying wh ich financial
statements must be included in the document, as well as the per iods to be covered,
the age of the financial statements and other information of a financial nature: 
(a) consolidated statements and other financial information;
(b) significant changes. 
The accounting and auditing principles that will be accepted fo r use in preparation
                    COMP ANIES              [CAP. 386.       287
and audit of the financial statements will be determined in acc ordance with
international accounting and auditing standards. 
Details of the offer 15. The following information shall be provided regarding the of fer, the plan for
distribution of the securities and related matters: 
(a) offer;
(b) plan for distribution;
(c) markets;
(d) holders of securities who are selling;
(e) dilution (for equity securities only);
(f) expenses of the issue.
Additional information 
16. Information concerning the following that is not covered els ewhere in the
prospectus shall be provided:
(a) share capital;
(b) memorandum and articles of association;
(c) material contracts;
(d) exchange controls;
(e) taxation;
(f) dividends and paying agents;
(g) statement by experts;
(h) documents on display;
(i) subsidiary information.
PART II - REGISTRATION DOCUMENT
17. (1) The registration document shall contain the information l aid down in
the following sub-paragraphs. 
Identity of directors, senior management, advisers and auditors  
(2) Information shall be given regarding names, functions and ot her information
necessary to identify the persons responsible for drawing up th e prospectus and
those responsible for auditing the financial statements. 
Key information about the issuer (3) Key information shall be provided about the company’s financ ial condition,
capitalisation and risk factors. If the financial statements in cluded in the document
are restated to reflect material changes in the company’s group  structure or in
accounting policies, the selected financial data must also be r estated. Information
shall be given on the following: 
(a) selected financial data;
(b) capitalisation and indebtedness;
(c) risk factors.
Information on the company (4) Information shall be provided about the company’s business o perations, the
 288        CAP. 386. ]                         COMP ANIES
products it makes or the services it provides and the factors w hich affect the
business. It is also intended to provide information regarding the adequacy and
suitability of the company’s properties, plants and equipment, as well as its plans for
future capacity increases or decreases. Information shall be gi ven on: 
(a) history and development of the company;
(b) business overview;
(c) organisational structure;
(d) property, plants and equipment.
Operating and financial review and prospects (5) The management shall provide an explanation of factors that have affected
the company’s financial condition and results of operations for  the historical periods
covered by the financial statements, and management’s assessmen t of factors and
trends which are expected to have a material effect on the comp any’s financial
condition and results of operations in future periods. Informat ion shall be given on: 
(a) operating results;
(b) liquidity and capital resources;
(c) research and development, patents and licences, etc.;
(d) trends.
Directors, senior management and employees (6) Information on the following shall be provided concerning th e company’s
directors and managers that will allow investors to assess thei r experience,
qualifications and levels of remuneration, as well as their rel ationship with the
company: 
(a) directors and senior management;
(b) remuneration;
(c) board practices;
(d) employees;
(e) share ownership. 
Major shareholders and related-party transactions (7) Information shall be provided regarding the major shareholde rs and others
that may control or have an influence on the company as well as  information
regarding transactions the company has entered into with person s affiliated with the
company and whether the terms of such transactions are fair to the company, as
follows: 
(a) major shareholders;
(b) related-party transactions;
(c) interests of experts and advisers.
Financial information (8) Information on the following shall be provided specifying wh ich financial
statements must be included in the document, as well as the per iods to be covered,
the age of the financial statements and other information of a financial nature: 
(a) consolidated statements and other financial information;
(b) significant changes. 
                    COMP ANIES              [CAP. 386.       289
The accounting and auditing principles that will be accepted fo r use in preparation
and audit of the financial statements will be determined in acc ordance with
international accounting and auditing standards. 
Additional information 
(9) Information concerning the following that is not covered els ewhere in the
prospectus shall be provided:
(a) share capital;
(b) memorandum and articles of association;
(c) material contracts;
(d) statement by experts;
(e) documents on display;
(f) subsidiary information. 
PART III - SECURITIES NOTE 
18. (1) The securities note shall contain the information laid do wn in the
following sub-paragraphs.
Identity of directors, senior management, advisers and auditors  
(2) Information shall be given regarding names, functions and ot her information
necessary to identify the persons responsible for drawing up th e prospectus and
those responsible for auditing the financial statements. 
Offer statistics and expected timetable (3) The following key information shall be provided regarding th e conduct of
any offer and the identification of important dates relating to  that offer: 
(a) offer statistics;
(b) method and expected timetable.
Key information about the issuer (4) Summarised key information shall be provided about the compa ny’s
financial condition, capitalisation and risk factors. If the fi nancial statements
included in the document are restated to reflect material chang es in the company’s
group structure or accounting policies, the selected financial data must also be
restated. Information shall be given on the following: 
(a) capitalisation and indebtedness;
(b) reasons for the offer and use of proceeds;
(c) risk factors. 
Interests of experts (5) Information shall be provided regarding transactions the com pany has
entered into with experts or advisers employed on a contingent basis. 
Details of the offer (6) The following information shall be provided regarding the of fer, the plan for
distribution of the securities and related matters: 
(a) offer;
(b) plan for distribution;
 290        CAP. 386. ]                         COMP ANIES
(c) markets;
(d) selling securities holders;
(e) dilution (for equity securities only);
(f) expenses of the issue. 
Additional information 
(7) Information concerning the following that is not covered els ewhere in the
prospectus shall be provided: 
(a) exchange controls;
(b) taxation;
(c) dividends and paying agents;
(d) statement by experts;
(e) documents on display.
PART IV - SUMMARY NOTE
19. The summary note shall provide in a few pages the most impor tant
information included in the pros pectus, covering at least the i tems laid down in the
following: 
- identity of directors, senior management, advisers and auditor s
- offer statistics and expected timetable- key information concerning selected financial data; capitalisa tion and
indebtedness; reasons for the offer and use of proceeds; risk f actors
- information concerning the issuer
- history and development of the issuer
- business overview
- operating and financial review and prospects
- research and development, patents and licences, etc.
- trends
- directors, senior management and employees- major shareholders and related-party transactions- financial information
- consolidated statements and other financial information
- significant changes
- details on the offer
- offer
- plan for distribution- markets- selling shareholders- dilution (for equity securities only)- expenses of the issue
- additional information
- share capital
- memorandum and articles of incorporation
                    COMP ANIES              [CAP. 386.       291
- documents available for inspection
PART V - V ALIDITY OF A PROSPECTUS, ARRANGEMENTS FOR 
APPROV AL AND PUBLICATION OF A PROSPECTUS
Where final offer price and amount of securities offered cannot  be included in
prospectus 
20. (1) Where the final offer price and amount of securities whic h will be
offered to the public cannot be included in the prospectus: 
(a) the criteria, and/or the conditions in accordance with which t he above
elements will be determined or, in the case of price, the maxim um price,
shall be disclosed in the prospectus; or, where there is no suc h
disclosure,
(b) the acceptance of the purchase or subscription of securities m ay be
withdrawn at any time between the acceptance and the expiration  of the
third working day after the final offer price and amount of sec urities
which will be offered to the public have been filed. 
(2) The final offer price and amount of securities shall be file d with the
Registrar and published. 
Duration of validity of a prospectus 
21. (1) A prospectus shall be valid for 12 months after its approval by the
Registrar for offers to the public provided that the prospectus  is completed by any
supplements required pursuant to paragraph 26. 
(2) In the case of an offering programme, the base prospectus, p reviously filed,
shall be valid for a period of up to 12 months. 
(3) In the case of non-equity securities referred to in paragrap h 5(2)( a) of this
Part, the prospectus shall be valid until such securities are n o longer issued in a
continuous or repeated manner. 
(4) A registration document, previously registered, shall be val id for a
maximum period of 12 months. The registration document accompan ied by the
securities note, updated, if applicable, in accordance with par agraph 22 of this Part,
shall be considered to constitute a valid prospectus. 
Previous issue of a registration document 
22. (1) An issuer which already has a registration document appro ved by the
Registrar shall be required to draw up only the securities note  and the summary note
when securities are offered to the public. 
(2) In this case, the securities note shall provide information that would
normally be provided in the registration document if there has been a material
change or recent development which could affect investors’ asse ssments since the
latest updated registration document or any supplement as provi ded for in paragraph
26 was approved. The securities and summary notes shall be subj ect to a separate
approval. 
(3) Where an issuer has only filed a registration document witho ut approval, the
entire documentation, including updated information, shall be s ubject to approval. 
Approval by the Registrar 
23. (1) The Registrar shall not approve a prospectus unless he is  satisfied that: 
 292        CAP. 386. ]                         COMP ANIES
(a) Malta is the home Member State in relation to the issuer of th e
securities to which it relates;
(b) the prospectus has been drawn up in accordance with the provis ions of
this Act and of Part A of this Schedule. 
(2) The Registrar shall notify the issuer or the offeror, as the  case may be, of his
decision regarding the approval of the prospectus within ten wo rking days of the
submission of the draft prospectus. The Registrar shall, at the  same time, also notify
ESMA of such approval, and shall provide ESMA with a copy of su ch prospectus.
(3) The time limit referred to in sub-paragraph (2) shall be ext ended to twenty
working days if the public offer involves securities issued by an issuer who has not
previously offered securities to the public. 
(4) If the Registrar finds, on reasonable grounds, that the docu ments submitted
to him are incomplete or that supplementary information is need ed, the time limits
referred to in sub-paragraphs (2) and (3) shall apply only from  the date on which
such information is provided by the issuer or the offeror. 
In the case referred to in sub-paragraphs (2) the Registrar sho uld notify the issuer
if the documents are incomplete within ten (10) working days of  the submission of
the application. 
(5) If the Registrar fails to give a decision on the prospectus within the time
limits mentioned in sub-paragraphs (2) and (3) this shall not b e deemed to constitute
approval of the prospectus. 
Transfer by Registrar of application for approval 
24. (1) The Registrar may transfer an application for the approva l of a
prospectus or a supplementary prospectus to the regulatory auth ority of another
Member State or EEA state, subject to the prior notification to  ESMA and to the
agreement of the regulatory authority of the other State being obtained.
(2) The Registrar must inform the applicant of the transfer with in three working
days beginning with the first working day after the date of the  decision taken by the
Registrar. 
(3) On making a transfer under sub-paragraph (1), the Registrar ceases to have
functions under Part A of this Schedule in relation to the appl ication transferred. 
Transfer to Registrar of application for approval 
25. Where the Registrar agrees to the transfer to him of an appl ication for the
approval of a prospectus made to  the regulatory authority of an other Member State
or EEA State -
(a) Malta is to be treated for the purposes of this Act and of Par t A of this
Schedule as the home Member State in relation to the issuer of the
securities to which the prospectus relates; and 
(b) the time-limits referred to in paragraph 23 apply as if the da te of the
transfer were the date on which the application was received by  the
Registrar.
Significant new factors, material mistakes or inaccuracies 
26. (1) Every significant new factor, material mistake or inaccur acy relating to
the information included in the prospectus which is capable of affecting the
assessment of the securities and which arises or is noted betwe en the time when the
prospectus is approved and the final closing of the offer to the public, whichever occurs
                    COMP ANIES              [CAP. 386.       293
later, shall be mentioned in a supplement to the prospectus. Such a su pplement shall
be approved in the same way in a maximum of seven working days and published in
accordance with at least the same arrangements as were applied when the original
prospectus was published. The summary, and any translations the reof, shall also be
supplemented, if necessary to take into account the new informa tion included in the
supplement. 
(2) Investors who have already agreed to purchase or subscribe f or the securities
before the supplement is published shall have the right to with draw their acceptance
within two working days after the publication of the supplement , provided that the new
factor, mistake or inaccuracy referred to in paragraph (1) aros e before the final closing of
the offer to the public and the delivery of the securities. Tha t period may be extended by
the issuer or the offeror. The final date of the right of withd rawal shall be stated in the
supplement.
PART VI - EXERCISE OF PASSPORT RIGHTS
27.(1)( a) Where Malta is the home Member State and an offer to the publi c is
provided for in one or more Member S tates or EEA States, other than
Malta, the prospectus approved by the Registrar and any supplem ents
thereto shall be valid for an offer to the public in any number  of host
Member States or EEA States, provided that ESMA and the regulat ory
authority of each host Member State or EEA State are also notif ied in
accordance with sub-paragraph (1)( b).
(b) The Registrar shall provide the regulatory authority of the ho st Member
State or EEA State, at the request of the issuer or the person responsible
for drawing up the prospectus and within three working days fol lowing
the receipt of that request or, if the request is submitted together with the
draft prospectus, within one working day after the approval of the
prospectus, with a certificate of approval and a copy of the pr ospectus
as approved. If applicable, this notification shall be accompan ied by a
translation of the summary of the prospectus produced under theresponsibility of the issuer or person responsible for drawing up the
prospectus. The same procedure shall be followed for any supplement to
the prospectus. The Registrar shall notify ESMA with such certi ficate of
approval of the prospectus at the same time as this is notified  to the
regulatory authority of the host Member State or EEA State.
(c) The Registrar shall also notify the issuer or the person respo nsible for
drawing up the prospectus of the certificate of approval at the  same time it
notifies the regulatory authority of the host Member State or E EA State in
terms of this paragraph.
(2) A prospectus in relation to an offer to the public which has  been approved
by the regulatory authority of another Member State, or an EEA State is not deemed
to be an approved prospectus unless that authority has provided  the Registrar with a
certificate of approval and a copy of the prospectus as approve d; together with,
where requested by the Registrar, a translation into English or  Maltese of the
summary of the prospectus. 
(3) For the purposes of this paragraph, the certificate of appro val shall consist
of a statement -
(a) that the prospectus has been drawn up in accordance with 
the Prospectus
Directive ;
(b) that the prospectus has been approved, in accordance with the
Prospectus Directive , by the Registrar or the regulatory authority of the
 294        CAP. 386. ]                         COMP ANIES
Member State or EEA state, as the case may be, providing the
certificate; and where applicable
(c) of the reasons as to why the Registrar or the regulatory autho rity
providing the certificate authorised, in accordance with the Prospectus
Directive , the omission from the prospectus of information which would
otherwise have been included.
(4) The list of certificates of approval of prospectuses and any  supplements
thereto, which are notified to the Registrar in accordance with  sub-paragraph (2),
shall be published on a website maintained by the Registrar and  they shall remain on
the website for a period of twelve months.
Use of Languages 28. When an offer to the public is made in one or more Member St ates or EEA
States excluding Malta, the prospectus shall be drawn up either  in a language
accepted by the regulatory authorities of those Member States o r EEA States or in a
language customary in the sphere of international finance, at t he choice of the issuer
or offeror:
Provided that for the purpose of scrutiny by the Registrar, the  prospectus shall be
drawn up in Maltese or English or in a language customary in th e sphere of
international finance, at the choice of the issuer or offeror. 
29. Where an offer to the public is made in more than one Member  States or
EEA States, including Malta, the prospectus shall be drawn up i n English or Maltese
and shall also be made available either in a language accepted by the regulatory
authorities of each host Member State or EEA State or in a lang uage customary in
the sphere of international finance, at the choice of issuer or  offeror.
PART B
(Article 390) 
MATTERS TO BE SPECIFIED IN A PROSPECTUS OF AN OVERSEA 
COMPANY CONSTITUTED OTHER THAN IN A MEMBER STATE OR IN 
AN EEA STATE AND REPORTS TO BE SET OUT THEREIN 
(Chapter II of Part XI of this Act)
PART I - MATTERS TO BE SPECIFIED
General references
1. ( a) References herein to the issuing company are to the company re ferred to
in article 391;
(b) References to debt securities shall include references to debe ntures and
   to other securities similar in substance to debentures.
2. Where the prospectus relates to debt securities guaranteed by  one or more
legal persons, the information required by this Schedule shall be produced both with
respect to the issuing company and with respect to the guaranto r or guarantors.
Where the prospectus relates to convertible debt securities, ex changeable debt
securities or debt securities with warrants or to the warrants themselves, information
shall also be given with regard to the nature of the shares or debt securities to which
they confer entitlement and the conditions of and procedures fo r conversion,
exchange or subscription. Where the issuing company of the conv ertible securities or
                    COMP ANIES              [CAP. 386.       295
warrants is not the issuing company of the securities into whic h they can be
converted, the information required by this Schedule shall be p roduced both with
respect to the company which issues the convertible securities or warrants and the
company which issues the securities into which they can be conv erted.
General principles
3. The prospectus shall contain the information which, according  to the
particular nature of the issuer and of the transferable securit ies offered to the public,
is necessary to enable investors to make an informed assessment  of the assets and
liabilities, financial position, profits and losses and prospec ts of the issuer and of the
rights attaching to the transferable securities.
4. Where certain information specified in this Schedule is found  to be
inappropriate to the issuing company’s sphere of activity or it s legal form or to the
transferable securities being offered, equivalent information s hall be drawn up where
certain information specified in this Schedule is found to be i napplicable to the
specific issue or to the legal form or commercial nature of thi s issue, then the
information required need not be provided so long as the prospe ctus makes specific
reference to the particular issue, stating that the information  is not being supplied
and amplifying on the reasons for so doing as appropriate.
5. If the period of existence of the issuing company is less tha n any period for
which information is required by this Schedule, the information  need be provided
only for the period of the company’s existence.
Specific matters to be specified
6. Paragraphs 7 to 25 of this Part contain the specific matters to be specified in
a prospectus.
The persons responsible for the prospectus
7. Names, functions and declarations by the persons responsible for the
prospectus that to the best of their knowledge the information contained in the
prospectus is in accordance with the facts and that the prospec tus makes no omission
likely to affect its import.
The offer to the public
8. The following details of the offer, in so far as they are app licable to the type
of instrument on offer:
- the nature of the securities being offered; - the amount and purpose of the issue;- the number of securities issued and the rights attaching to th em; 
- the income tax withheld at source;- the period during which the offer is open;- the time of the opening of the subscription lists;- the date on which entitlement to dividends or interest arises;  
- the persons underwriting or guaranteeing the offer;- any restrictions on the free transferability of the securities  being offered and
the markets on which they may be traded;
- the establishments serving as paying agents; - methods of payment;
 296        CAP. 386. ]                         COMP ANIES
- the procedure for the exercise of any right of pre-emption;
- the methods of and time-limits for delivery of the securities;  and
- the system and dates for closing of the register of members or  of debentures,
according to the case.
9. The amount or percentage value payable on application and all otment on
each share, and, in the case of a second or subsequent offer of  shares the amount
offered for subscription on each  previous allotment made within  the two preceding
years, the amount actually allotted, and the amount, if any, pa id on the shares so
allotted.
10. The number, description and amount of any shares in or deben tures of the
company which any person has or is entitled to be given, an opt ion to subscribe for,
together with the following particulars of the option, that is to say:
- the period during which it is exercisable;- the amount or percentage value to be paid for shares or debent ures
subscribed for under it;
- the consideration, if any, given or to be given for it or for the right to it;
- the names and addresses of the persons to whom it or the right  to it was given
or, if given to existing shareholders or debenture holders as s uch, the
relevant shares or debentures.
Details of the issuing company
11. The following details of the issuing company: - Name;- Registered office and registration number; - Date of registration or incorporation;- The company’s legal form;- The company’s objects; - The company’s share capital: 
 - amount of the issued share capital;
 - the number and main particulars of the securities of which th e share
capital consists and any part of the share capital still to be paid up; 
 - the amount of any convertible debt securities, exchangeable d ebt
securities or debt securities with warrants and the procedures for
conversion, exchange or subscription;
 - the number of founders or management or deferred shares, if a ny, and
the nature and extent of the interest of the holders in the pro perty and
profits of the company;
 - the amount of the authorised share capital and the duration o f the
authorisation for the directors to allot such capital;
- Where appropriate, the group of undertakings to which the issu ing company
belongs;
- In so far as they are known, indication of the shareholders wh o directly or
indirectly exercise or could exercise a determining role in the  management of
the company.
                    COMP ANIES              [CAP. 386.       297
12. The number and amount of shares and debentures which within the two
preceding years have been issued,  or agreed to be issued, as fu lly or partly paid up
otherwise than in cash, and in the latter case the extent to wh ich they are so paid up,
and in either case the consideration for which those shares or debentures have been
issued or are proposed or intended to be issued.
13. If the share capital of the company is divided into differen t classes of shares,
the right of voting at meetings of the company conferred by, an d the rights in respect
of share capital and dividends attached to, the several classes  of shares respectively.
The issuing company’s principal activities
14. Description of the company’s principal activities:
- where appropriate, any exceptional factors which have influenc ed the
company’s activities;
- any dependence on patents, licences or contracts if these are of fundamental
importance;
- information regarding investments in progress where they are s ignificant; 
- any legal proceedings having an important effect on the issuin g company’s
financial position.
The issuing company’s management
15. Names, addresses, functions and remuneration of directors.16. The number of shares, if any, fixed by the articles as the q ualification of a
director, and any provision in the articles as to remuneration of the directors.
The purpose of the offer and costs already incurred 
17. Particulars as to:- the amount which, in the opinion of the directors, is to be ra ised by the issue
of the shares in order to provide the sums, or, if any part the reof is to be
defrayed in any other manner, the balance of the sums, required  to be
provided in respect of each of the following matters:
- the purchase price of any property purchased or to be purchase d which is to
be defrayed in whole or in part out of the proceeds of the issu e;
- any preliminary expenses payable by the company and any commis sion so
payable to any person in consideration of his agreeing to subsc ribe for, or of
his procuring or agreeing to procure subscriptions for, any sha res in the
company;
- the repayment of any moneys borrowed by the company in respect  of any of
the foregoing matters;
- working capital; and- the amounts to be provided in respect of the matters aforesaid  otherwise than
out of the proceeds of the issue and the sources out of which t hose amounts
are to be provided.
18. In regard to any property purchased or acquired by the compa ny or proposed
so to be purchased or acquired, which is to be paid for wholly or partly out of the
proceeds of the issue offered for subscription by the prospectu s, the following
particulars, that is to say:
- the names and addresses of the vendors;
 298        CAP. 386. ]                         COMP ANIES
- the amount paid or payable in cash, shares or debentures to th e vendor,
specifying the amount, if any, in respect of goodwill, and, whe re there is
more than one separate vendor, or the company is a sub-purchase r, the
amount so payable to each vendor;
- brief particulars of any transaction relating to the property completed within
the two preceding years in which any vendor of the property to the company
or any person who is, or was at the time of the transaction, a promoter or a
director of the company had any interest direct or indirect.
Every person shall for the purpose of this Schedule be deemed t o be a
vendor who has entered into a contract, absolute or conditional , for the sale or
purchase, or for any option of purchase, of any property to be acquired by the
company, in any case where:
- the purchase money is not fully paid at the date of the issue of the
prospectus;
- the purchase money is to be paid or satisfied wholly or in par t out of the
proceeds of the issue offered for subscription by the prospectu s;
- the contract depends for its validity or fulfilment on the res ult of that issue.
In this paragraph the expression "vendor" includes a grantor on  emphyteusis
and a lessor, the expression "sale" includes an emphyteutical g rant and a lease, the
expression "purchase money" includes the consideration for the emphyteutical grant
or for the lease, and the expression "sub-purchaser" includes a  sub-emphyteuta and a
sub-lessee.
19. In the case of a company which has been carrying on business , or of a
business which has been carried on for less than three years, t he length of time
during which the business of the company or the business to be acquired, as the case
may be, has been carried on.
Benefits for third parties and other expenditure
20. The amount, if any, paid within the two preceding years, or payable, as
commission, but not including commission to sub-underwriters fo r subscribing or
agreeing to subscribe, or procuring or agreeing to procure subs criptions, for any
shares in or debentures of the company, or the rate of any such  commission.
21. The amount or estimated amount of preliminary expenses and t he persons by
whom any of those expenses have been paid or are payable, and t he amount or
estimated amount of the expenses of the issue and the persons b y whom any of those
expenses have been paid or are payable.
22. Any amount or benefit paid or given within the two preceding  years or
intended to be paid or given to any promoter, and the considera tion for the payment
or the giving of the benefit.
23. The dates of, parties to, name of receiving notary, if any, and the general
nature of every material contract, not being a contract entered  into in the ordinary
course of the business carried on or intended to be carried on by the company or a
contract entered into more than two years before the date of is sue of the prospectus.
24. Full particulars of the nature and extent of the interests, if any, of any
director in the promotion of, or in the property proposed to be  acquired by, the
company, or where the interest of such a director consists in b eing a partner in a
partnership or a joint owner of a firm or other undertaking not  being a company, the
nature and extent of the interest of the partnership, firm or u ndertaking with a
statement of all sums paid or agreed to be paid to him or partn ership, firm or
                    COMP ANIES              [CAP. 386.       299
undertaking in cash or shares or otherwise by any person either  to induce him to
become, or to qualify him as, a director, or otherwise for serv ices rendered by him or
partnership, firm or undertaking in connection with the promoti on or formation of
the company.
Other significant information
25. Other significant information to be provided includes:- to the extent that such information would have a significant i mpact on any
assessment that might be made of the company, recent developmen ts in its
business and prospects;
- the most significant recent trends concerning the development of the
company’s business since the end of the preceding accounting pe riod;
- information on the company’s prospects for at least the curren t accounting
period.
PART II - REPORTS TO BE SET OUT
26. (1) The prospectus shall set out a report by the auditors of the company
with respect to - 
(a) the profits and losses of the company in respect of each of th e three
accounting periods, or where the company has been carrying onbusiness for less than three accounting periods, in respect of each of
such periods, immediately preceding the issue of the prospectus ; and
(b) the assets and liabilities of the company at the last date to which the
annual accounts of the company were made up; and
(c) the rates of the dividends, if any, paid up by the company in respect of
each class of shares in respect of each of the three accounting  periods,
or such less number of periods as aforesaid, immediately preced ing the
issue of the prospectus, giving particulars of each such class of shares
on which such dividends have been paid and particulars of the c ases in
which no dividends have been paid in respect of any class of sh ares in
respect of any of those periods,
and, if no annual accounts have been made up in respect of any part of the three
accounting periods or of such lesser periods as aforesaid, endi ng on a date three
months before the issue of the prospectus, containing a stateme nt of that fact.
(2) If the company has subsidiary undertakings, the reports shal l - 
(a) deal separately with the company’s profits or losses as provid ed by sub-
paragraph (1) ( a) of this paragraph, and in addition deal either - 
(i) as a whole with the combined profits or losses of its subsid iary
undertakings, so far as they concern members of the company, or
(ii) individually with the profits or losses of each of its subs idiary
undertakings, so far as they concern members of the company,
or, instead of dealing separately with the company’s profits or  losses, deal as
a whole with the profits or losses of the company and, so far a s they concern
members of the company, with the combined profits and losses of  its
subsidiary undertakings; and
(b) deal separately with the company’s assets and liabilities as p rovided by
sub-paragraph (1) ( b) of this paragraph, and in addition deal either - 
(i) as a whole with the combined assets and liabilities of its
 300        CAP. 386. ]                         COMP ANIES
subsidiary undertakings, with or without the company’s assets
and liabilities, or
(ii) individually with the assets and liabilities of each of its  subsidiary
undertakings,
indicating, as respects the assets and liabilities of its subsi diary
undertakings, the allowance to be made for persons other than m embers of
the company.
27. If the proceeds of the issue of the shares or debentures are  to be applied
directly or indirectly in the purchase of any business, or any part of the proceeds of
the issue is to be so applied, there shall be set out in the pr ospectus a report made by
an accountant upon - 
(a) the profits or losses of the business in respect of each of th e three
accounting periods, or where the business has been carried on f or less
than three accounting periods, in respect of each of such perio ds,
immediately preceding the issue of the prospectus, and
(b) the assets and liabilities of the business at the last date to  which the
annual accounts of the business were made up.
28. (1) The provisions of sub-paragraphs (2) and (3) of this para graph shall
apply - 
(a) the proceeds of the issue are to be applied directly or indire ctly in any
manner resulting in the acquisition by the company of shares in  any
other undertaking, or any part of the proceeds is to be so appl ied, and
(b) by reason of that acquisition or anything to be done in conseq uence of,
or in connection with it, that undertaking will become a subsid iary
undertaking of the company.
(2) There shall be set out in the prospectus a report made by an  accountant
upon - 
(a) the profits or losses of the other undertaking in respect of e ach of the
three accounting periods or where such other undertaking has be en
carrying on business for less than three accounting periods, in  respect of
each of such periods, immediately preceding the issue of the pr ospectus,
and
(b) the assets and liabilities of the other undertaking at the las t date to
which its annual accounts were made up.
(3) The report shall - 
(a) indicate how the profits or losses of the other undertaking wo uld in
respect of the shares to be acquired have concerned members of the
company and what allowance would have fallen to be made, in rel ation
to assets and liabilities so dealt with, for holders of other s hares, if the
company had at all material times held the shares to be acquire d, and
(b) where the other undertaking is a parent undertaking, deal with  the
profits or losses and the assets and liabilities of the underta king and its
subsidiary undertakings in the manner provided by sub-paragraph  (2) of
paragraph 26 of this Part in relation to the company and its su bsidiary
undertakings.
29. The expression "accounting period" in this Part means the ye ar in respect of
which the annual accounts of the company, the undertaking or th e business, as the
                    COMP ANIES              [CAP. 386.       301
case may be, are made up; and where by reason of any alteration  of the date on
which the accounting period of the company, undertaking or busi ness terminates the
annual accounts have been made up for a period greater or less than one year, that
greater or less period is for the purpose of this Part deemed t o be an accounting
period.
30. Any report required by this Part shall either indicate by wa y of note any
adjustments as respects the figures of any profits or losses or  assets and liabilities
dealt with by the report which appear to the persons making the  report necessary, or
shall make those adjustments and indicate that adjustments have  been made.
31. (1) A report required by paragraph 27 or 28 of this Part shal l be made by an
accountant who is an individual who holds a warrant to act as a ccountant issued
under the Accountancy Profession Act, or is "an accountancy firm duly registered
under the said Act.".
(2) The accountant making any report required for the purposes o f paragraph 27
or 28 of this Part shall be named in the prospectus.
 302        CAP. 386. ]                         COMP ANIES
PART I
ADDITIONAL PROVISIONS APPLICABLE TO THE ANNUAL FINANCIAL 
ACCOUNTS OF LARGE UNDERTAKINGS, MEDIUM-SIZED UNDERTAKINGS 
AND CERTAIN OTHER UNDERTAKINGS, 
WHERE APPLICABLE 
1. For the purpose of Chapter X of Title I of Part V and this Sc hedule, the
following definitions shall apply:
"large groups" means groups consisting of parent and subsidiary  undertakings to
be included in a consolidation and which, on a consolidated bas is, exceed the limits
of at least two of the three following criteria on the balance sheet date of the parent
undertaking:
(i) balance sheet total: EUR 20 000 000 computed net, or €24,00 0,000
computed gross;
(ii) net turnover: EUR 40 000 000 computed net, or €48,000,000 computed
gross;
(iii) average number of employees during the financial year: 250 ;
"large undertakings" means undertakings which on their balance sheet dates
exceed at least two of the three following criteria:
(i) balance sheet total: EUR 20 000 000;
(ii) net turnover: EUR 40 000 000;(iii) average number of employees during the financial year: 250 ;
"medium-sized groups" means groups which are not small groups, which consist
of parent and subsidiary undertakings to be included in a conso lidation and which,
on a consolidated basis, do not exceed the limits of at least t wo of the three
following criteria on the balance sheet date of the parent unde rtaking:
(i) balance sheet total: EUR 20 000 000 computed net, or €24,00 0,000
computed gross;
(ii) net turnover: EUR 40 000 000 computed net, or €48,000,000 computed
gross;
(iii) average number of employees during the financial year: 250 ;
"medium-sized undertakings" means undertakings which are not sm all companies,
as defined in article 185(1), and which on their balance sheet dates do not exceed the
limits of at least two of the three following criteria:
(i) balance sheet total: EUR 20 000 000;
(ii) net turnover: EUR 40 000 000;(iii) average number of employees during the financial year: 250 .
Matters applicable to medium-sized and lar ge undertakings
2. (1) Intangible assets shall be written off over the useful eco nomic life of theSubstituted by:
XXXI. 2015.23.THIRD SCHEDULE
(Articles 167 and 171)
                    COMP ANIES              [CAP. 386.       303
intangible asset.
In exceptional cases where the useful life of goodwill and deve lopment costs
cannot be reliably estimated, such assets shall be written off within a maximum
period of 10 years. An explanati on of the period over which goo dwill is written off
shall be provided within the notes to the financial statements.
(2) Where an asset or liability relates to more than one layout item, its
relationship to the other item or items shall be disclosed eith er under the item where
it appears or in the notes to the accounts, if such disclosure is essential to the
comprehension of the individual accounts.
Additional disclosures for medium-sized and large undertakings and public-
interest entities
3. In the notes to the financial statements public-interest enti ties, large
undertakings and medium-sized undertakings shall, in addition t o the information
required under other provisions of this Act and generally accep ted accounting
principles and practice, disclose information in respect of:
(i) the amount and nature of individual items of income or expen diture
which are of exceptional size or incidence;
(ii) the average number of employees during the financial year b roken down
by categories and, if they are not disclosed separately in the profit and
loss account, the staff costs relating to the accounting period  broken
down between wages and salaries, social security costs and pens ion
costs.
4. In the notes to the financial statements, medium-sized and la rge
undertakings and public-interest entities shall, in addition to  the information
required under this Schedule and any other provisions of this A ct, disclose
information in respect of the following matters:
(a) the existence of any participation certificates, convertible d ebentures,
warrants, options or similar securities or rights, with an indi cation of
their number and the rights they confer;
(b) the name and registered office of each of the undertakings in which the
undertaking, either itself or through a person acting in his ow n name but
on the undertaking’s behalf, holds a participating interest, sh owing the
proportion of the capital held, the amount of capital and reser ves, and
the profit or loss for the latest financial year of the underta king
concerned for which financial statements have been adopted; theinformation concerning capital and reserve and the profit or lo ss may be
omitted where the undertaking concerned does not publish its ba lance
sheet and is not controlled by the undertaking;
(c) the name, the head or registered office and the legal form of each of the
undertakings of which the undertaking is a member having unlimi ted
liability;
(d) the name and registered office of the undertaking which draws up the
consolidated financial statements of the largest body of undert akings of
which the undertaking forms part as a subsidiary undertaking;
(e) the name and registered office of the undertaking which draws up the
consolidated statements of the smallest body of undertakings of  which
the undertaking forms part as a subsidiary undertaking and whic h is also
 304        CAP. 386. ]                         COMP ANIES
included in the body of undertakings referred to in sub-paragra ph (d);
(f) the place where copies of the consolidated financial statement s referred
to in sub-paragraphs ( c) and ( d) may be obtained, provided that they are
available;
(g) the nature and business purpose of the undertaking’s arrangeme nts that
are not included in the balance sheet and the financial impact on the
undertaking of those arrangements, provided that the risks or b enefits
arising from such arrangements are material and insofar as thedisclosure of such risks or benefits is necessary for the purpo ses of
assessing the financial position of the undertaking.
Additional disclosures applicable to large undertakings and public-interest entities
5. In the notes to the financial statements, large undertakings and public-
interest entities shall, in addition to the information require d under this Schedule and
any other provisions of this Act, disclose information in respe ct of the total fees for
the financial year charged by each auditor or audit firm for th e statutory audit of the
annual financial statements, and the total fees charged by each  auditor or audit firm
for other assurance services, for tax advisory services and for  other non-audit
services:
Provided that this requirement shall not apply to the annual fi nancial statements of
an undertaking where that undertaking is included within the co nsolidated financial
statements required to be drawn up under article 170, provided,  however, that such
information shall be given in the notes to the consolidated fin ancial statements.
PART II
ADDITIONAL PROVISIONS APPLICABLE
TO CONSOLIDATED ACCOUNTS
The preparation of consolidated financial statements
1. An undertaking which draws up consolidated financial statemen ts shall
apply the same measurement bases as are applied in its annual f inancial statements.
However, other measurement bases in accordance with generally a ccepted
accounting principles and practice may be used in consolidated financial statements.
Where an undertaking uses such other measurement bases, that fa ct shall be
disclosed in the notes to the consolidated financial statements  and reasons given.
The notes to the consolidated financial statements
2. The notes to the consolidated financial statements of large g roups and
medium-sized groups shall set out the information required by P art 1 of this Third
Schedule, in addition to any other information required under o ther provisions of
this Act, in a way which facilitates the assessment of the fina ncial position of the
undertakings included in the consolidation taken as a whole, ta king account of the
essential adjustments resulting from the particular characteris tics of consolidated
statements as compared to annual financial statements, includin g the following:
in disclosing the amounts of emoluments and advances and credit s
granted to members of the administrative, managerial and superv isory
bodies, only amounts granted by the parent undertakings to memb ers of
the administrative, managerial and supervisory bodies of the pa rent
undertaking shall be disclosed.
3. The notes to the consolidated financial statements shall, in addition to the
information required under this Act, set out the following info rmation:
(a) in relation to undertakings included in the consolidation:
                    COMP ANIES              [CAP. 386.       305
(i) the names and registered offices of those undertakings;
(ii) the proportion of the capital held in those undertakings, o ther than
the parent undertaking, by the undertakings included in theconsolidation or by persons acting in their own names but onbehalf of those undertakings, and
(iii) information as to which of the conditions referred to in s ub-
articles (2), (3) and (8) of article 2 of this Act following th e
application of sub-articles (4), (5) and (6) of the said articl e 2 has
formed the basis on which the consolidation has been carried ou t.
This disclosure may, however, be omitted where consolidation ha s
been carried out on the basis of paragraph ( a) of sub-article
(2)(a)(i) of article 2 of this Act and where the proportion of the
capital and the proportion of the voting rights held are the sa me;
(b) The information set out in sub-paragraph ( a) of this paragraph shall be
given insofar as it is applicable in respect of undertakings ex cluded
from a consolidation on the basis that the effect of their incl usion in the
consolidation would be immaterial pursuant to the provisions of  sub-
article (3) of article 170, and an explanation must be given fo r the
exclusion of the undertakings referred to in sub-article (4) of  that
article;
(c) the names and registered offices of associated undertakings in cluded in
the consolidation and the proportion of their capital held byundertakings included in the consolidation or by persons acting  in their
own names but on behalf of those undertakings; and
(d) in relation to each of the undertakings, other than those refe rred to in
sub-paragraphs ( a) and ( b), in which undertakings included in the
consolidation, either themselves or through persons acting in t heir own
names but on behalf of those undertakings, hold a participating  interest:
(i) the name and registered offices of those undertakings;
(ii) the proportion of the capital held;
(iii) the amount of the capital and reserves, and the profit or loss for
the latest financial year of the undertaking concerned for whic h
financial statements have been adopted.
The information concerning capital and reserves and the profit or loss may also be
omitted where the undertaking concerned does not publish its ba lance sheet.
4. The information required by paragraph 3(a) to (d) may take th e form of a
statement filed with the Registrar. The filing of such a statem ent shall be disclosed in
the notes to the consolidated financial statements. Such inform ation may be omitted
when its nature is such that its disclosure would be seriously prejudicial to any of the
undertakings to which it relates and the Registrar agrees that the information need
not be disclosed. Any such omission shall be disclosed in the n otes to the
consolidated financial statements.
 306        CAP. 386. ]                         COMP ANIES
REPORT ON PAYMENTS TO GOVERNMENTS
Definitions relating to reporting on payments to government s
1. For the purpose of this Schedule, the following definitions s hall apply:
"undertaking active in the extractive industry" means an undert aking with any
activity involving the exploration, prospection, discovery, dev elopment, and
extraction of minerals, oil, natural gas deposits or other mate rials, within the
economic activities listed in Section B, Divisions 05 to 08 of Annex 1 to Regulation
(EC) No. 1893/2006 of the European Parliament and of the Counci l of 20 December
2006 establishing the statistical classification of economic ac tivities NACE Revision
2;
"undertaking active in the logging of primary forests" means an  undertaking with
activities as referred to in Section A, Division 02, Group 02.2  of Annex I to
Regulation (EC) No. 1893/2006, in primary forests;
"government" means any national, regional or local authority of  a Member State
or of a third country. It include s a department, agency or unde rtaking controlled by
that authority;
"project" means the operational activities that are governed by  a single contract,
licence, lease, concession or similar legal agreements and form  the basis for payment
liabilities with a government. Nonetheless, if multiple such ag reements are
substantially interconnected, this shall be considered a projec t;
"payment" means an amount paid, whether in money or in kind, fo r activities, as
described in the definitions "undertaking active in the extract ive industry" and
"undertaking active in the logging of primary forests", of the following types:
(a) production entitlements;
(b) taxes levied on the income, production or profits of companies ,
excluding taxes levied on consumption such as value added taxes ,
personal income taxes or sales taxes;
(c) royalties;
(d) dividends;
(e) signature, discovery and production bonuses;
(f) licence fees, rental fees, entry fees and other considerations  for licences
and, or concessions; and
(g) payments for infrastructure improvements;
"large undertakings" and "public-interest entities" shall have the same meaning as
defined in the Third Schedule and article 2 of this Act respect ively.
Contents of the report
2. (1) Any payment, whether made as a single payment or as a seri es of related
payments, need not be taken into account in the report if it is  below EUR 100 000
within a financial year.Substituted by:
XXXI. 2015.24.FOURTH SCHEDULE
(Article 213A)
                    COMP ANIES              [CAP. 386.       307
(2) The report shall disclose the following information in relat ion to activities
as described in the definitions "undertaking active in the extr active industry" and
"undertaking active in the logging of primary forests" in respe ct of the relevant
financial year:
(a) the total amount of payments made to each government;
(b) the total amount per type of payment as specified in paragraph s (a) to
(g) of the definition "payment" in paragraph 1 of this Schedule m ade to
each government;
(c) where those payments have been attributed to a specific projec t, the
total amount per type of payment as specified in paragraphs ( a) to ( g) of
the definition "payment" in paragraph 1 of this Schedule, made for each
such project and the total amount of payments for each such pro ject.
Payments made by the undertaking in respect of obligations impo sed at entity
level may be disclosed at the entity level rather than at proje ct level.
(3) Where payments in kind are made to a government, they shall be reported in
value and, where applicable, in volume. Supporting notes shall be provided to
explain how their value has been determined.
The disclosure of the payments referred to in this Schedule sha ll reflect the
substance, rather than the form, of the payment or activity con cerned. Payments and
activities may not be artificially split or aggregated to avoid  the application of this
requirement.
Consolidated report on payments to governments
3. (1) Any large undertaking or any public-interest entity active  in the
extractive industry or the logging of primary forests shall dra w up a consolidated
report on payments to governments in accordance with this Sched ule if that parent
undertaking is under the obligation to prepare consolidated fin ancial statements as
laid down in article 170 of the Act.
A parent undertaking is considered to be active in the extracti ve industry or the
logging of primary forests if any of its subsidiary undertaking s are active in the
extractive industry or the logging of primary forests.
The consolidated report shall only include payments resulting f rom extractive
operations and, or operations relating to the logging of primar y forests.
(2) The obligation to draw up the consolidated report referred t o in sub-
paragraph (1) shall not apply to:
(a) a parent undertaking of a small group, as defined in article 1 85(5),
except where any affiliated undertaking is a public-interest en tity;
(b) a parent undertaking of a medium-sized group, as defined in th e Third
Schedule, except where any group undertaking is a public-intere st
entity; and
(c) a parent undertaking governed by the law of a Member State whi ch is
also a subsidiary undertaking, if its own parent undertaking is  governed
by the law of a Member State.
(3) An undertaking, including a public-interest entity, need not  be included in a
consolidated report on payments to governments where at least o ne of the following
conditions is fulfilled: 
(a) severe long-term restrictions substantially hinder the parent undertaking
 308        CAP. 386. ]                         COMP ANIES
in the exercise of its rights over the assets or management of that
undertaking;
(b) extremely rare cases where the information necessary for the
preparation of the consolidated report on payments to governmen ts in
accordance with this Schedule cannot be obtained withoutdisproportionate expense or undue delay; and
(c) the shares of that undertaking are held exclusively with a vie w to their
subsequent resale.
The above exemptions shall apply only if they are also used for  the purposes of the
consolidated financial statements.
Publication
4. (1) The report referred to in article 213A and this Schedule a nd the
consolidated report referred to in paragraph 3 of this Schedule  on payments to
governments shall be delivered to the Registrar for registratio n within the period
allowed by article 183.
(2) The directors shall have responsibility for ensuring that, to the best of their
knowledge and ability, the report on payments to governments is  drawn up and
published in accordance with the requirements of this Schedule.
Equivalence criteria
5. Undertakings referred to in article 213A and paragraph 3 of t his Schedule
that prepare and make public a report complying with third-coun try reporting
requirements assessed, as equivalent to the requirements of thi s Schedule are exempt
from the requirements of this Schedule except for the obligatio n to publish this
report as laid down in paragraph 4(1) of this Schedule.
                    COMP ANIES              [CAP. 386.       309
INDIVIDUAL ACCOUNTS AND DIRECTORS’ REPORT OF AN 
INVESTMENT COMPANY WITH V ARIABLE SHARE CAPITAL 
Without prejudice to any requirements laid down by the competen t authority under
the Investment Services Act or the Retirement Pensions Act, the individual accounts
of an investment company with variable share capital shall disc lose at least the
information specified in the following provisions of this Sched ule.
1. A statement of assets and liabilities showing: 
- securities;- debt instruments; - bank balances; - other assets;- total assets; - liabilities;- net asset value;- details of accounting and valuation policies. 
2. The number of units in circulation.3. The net asset value per unit or share.4. The composition of the portfolio, distinguishing at least bet ween:
(a) transferable securities admitted to listing on a Maltese regul ated market;
(b) transferable securities dealt in on any other regulated market  or on any
equivalent market in a non-Member State or non-EEA State;
(c) recently issued transferable securities;
(d) transferable securities not included in the above; 
(e) debt instruments not included in the above;
(f) other investments as applicable.
References in sub-paragraph ( c) of this paragraph to recently issued transferable
securities are to securities the terms of issue of which includ e an undertaking that an
application will be made for admission to listing on a Maltese regulated market or
for admission on any other regulated market or on any equivalen t market in a non-
Member State or non-EEA State.
The portfolio shall be analysed on the basis of economic, geogr aphic, currency or
other appropriate criteria, having regard to the investment pol icy of the company.
Such analysis shall show the value of each category of investme nt as a percentage of
net assets and as a percentage of total assets of the company.
Any material changes in the composition of the investment portf olio made during
the accounting period shall be stated.
5. A statement or statements of the developments concerning the assets of theFIFTH SCHEDULE
Amended by:
IV . 2003.165;IX. 2008.42;XVI. 2011.59.(Article 169)
 310        CAP. 386. ]                         COMP ANIES
company during the accounting period and including the followin g:
- income from investments; - other income;- management charges; - depositary’s charges;- other charges and taxes; - net income;- distributions and income reinvested; - changes in capital account;- appreciation or depreciation in value of investments;- other changes affecting the value of the assets and liabilitie s of the
company.
6. A comparative table covering the last three accounting period s and
including, for each accounting period, at the end of such perio d, the total net asset
value of the company and the net asset value per unit or share.
During its first, second and third accounting periods, a compan y shall show the
above information for all accounting periods since its registra tion.
7. Details, by category of transaction, of the resulting amount of commitments.
References in this paragraph to commitments are to the commitme nts resulting
from the use of techniques and instruments for the purposes of efficient portfolio
management, including protection against exchange, interest rat es and market risks.
                    COMP ANIES              [CAP. 386.       311
CONTENTS OF DIRECTORS’ REPORT
1. The directors’ report shall contain -
(a) particulars of any important events affecting the company or a ny of its
subsidiary undertakings which have occurred since the end of th e
accounting period;
(b) an indication of likely future developments in the business of  the
company and of its subsidiary undertakings;
(c) an indication of the activities, if any, of the company and of  its
subsidiary undertakings in the field of research and developmen t;
(d) the amount, if any, which they recommend should be paid by way  o f
dividend and the amount, if any, which they propose to carry toreserves; and
(e) the existence of branches of the company.
2. The directors’ report shall disclose the information specifie d in paragraph 3
of this Schedule where in an accounting period shares in a comp any - 
(a) are purchased by the company or are acquired by it by forfeitu re or
surrender or the company otherwise acquires its own shares; or
(b) are acquired by another person in circumstances where the acqu isition is
by company’s nominee, or by another with the company financialassistance, the company itself having a beneficial interest; or
(c) are made subject to pledge or other privileges, to a hypothec or to any
other charge in favour of the company.
3. The information required to be disclosed in the directors’ re port in
accordance with the provisions of paragraph 2 of this Schedule shall consist of the
following:
(a) the reasons for such transactions or occurrences;
(b) the number and nominal value of the shares so purchased, the a ggregate
amount of the consideration paid by the company for such shares  and
the reasons for their purchase or, in the absence of a nominal value, the
accountable par of the shares acquired and disposed of during t he
financial year and the proportion of the subscribed capital whi ch they
represent;
(c) in the case of acquisition or disposal for a value, the consid eration of
the shares;
(d) the number and nominal value of all the shares acquired and he ld by the
company and the proportion of the subscribed capital which theyrepresent;
(e) in relation to the undertaking’s use of financial instruments and where
material for the assessment of its assets, liabilities, financi al position
and profit or loss:SIXTH SCHEDULE
Amended by:
IV . 2003.166;XXXI. 2015.25;LIV . 2016.5.(Article 177)
 312        CAP. 386. ]                         COMP ANIES
(i) the undertaking’s financial risk management objectives and
policies, including its policy for hedging each major type offorecasted transaction for which hedge accounting is used; and
(ii) the undertaking’s exposure to price risk, credit risk, liqu idity risk
and cash flow risk.
4. Small undertakings shall be exempted from the obligation to p repare
directors’ reports, provided that they shall provide the inform ation referred to in
paragraph 2 and paragraph 3( a) to ( c) of this Schedule concerning the acquisition by
an undertaking of its own shares to be given in the notes to th e financial statements.
5. Medium-sized undertakings shall be exempted from the obligati on set out in
the third paragraph of sub-article (2) of article 177 insofar a s it relates to non-
financial information.
6. Where a consolidated directors’ report is required in terms o f article 177, the
following adjustment to the information required by that articl e and this Schedule
shall apply namely that in reporting details of own shares acqu ired, the consolidated
directors’ report shall indicate the number and nominal value o f all the parent
undertaking’s shares held by that parent undertaking, by subsid iary undertakings of
that parent undertaking or by a person acting in his own name b ut on behalf of any of
those undertakings. The disclosure of these particulars is requ ired in the notes to the
consolidated financial statements.
7. Where a consolidated management report is required in additio n to the
directors’ report, the two reports may be presented as a single  report.
Additional disclosures of non-financial information applicable to certain large
undertakings and groups
8. Large undertakings, as referred to in paragraph 1 of the Thir d Schedule,
which are public-interest entities exceeding on their balance s heet dates the criterion
of the average number of 500 employees during the financial yea r shall, in addition
to the other requirements of this Schedule, include in the dire ctors’ report a non-
financial statement containing information to the extent necess ary for an
understanding of the undertaking’s development, performance, po sition and impact
of its activity, relating to, as a minimum, environmental, soci al and employee
matters, respect for human rights, anti-corruption and bribery matters, including: 
(a) a brief description of the undertaking’s business model;
(b) a description of the policies pursued by the undertaking in re lation to
those matters, including due diligence processes implemented;
(c) the outcome of those policies;
(d) the principal risks related to those matters linked to the und ertaking’s
operations including, where relevant and proportionate, its bus iness
relationships, products or services which are likely to cause a dverse
impacts in those areas, and how the undertaking manages those r isks;
(e) non-financial key performance indicators relevant to the parti cular
business.
Where the undertaking does not pursue policies in relation to o ne or more of those
matters, the non-financial statement shall provide a clear and reasoned explanation
for not doing so.
The non-financial statement referred to in this paragraph shall  also, where
appropriate, include references to, and additional explanations  of, amounts reported
in the annual financial statements.
                    COMP ANIES              [CAP. 386.       313
Information relating to impending developments or matters in th e course of
negotiation may be omitted in exceptional cases where, in the d uly justified opinion
of the directors, the disclosure of such information would be s eriously prejudicial to
the commercial position of the undertaking, provided that such omission does not
prevent a fair and balanced understanding of the undertaking’s development,
performance, position and impact of its activity.
In requiring the disclosure of the information referred to in t his paragraph,
undertakings may rely on existing national, Union-based or inte rnational
frameworks, and if they do so, undertakings shall specify which  frameworks they
have relied upon.
9. Undertakings fulfilling the obligation set out in paragraph 8  of this Schedule
shall be deemed to have fulfilled the obligation relating to th e analysis of non-
financial information set out in sub-article (2) of article 177 .
10. An undertaking which is a subsidiary undertaking shall be ex empted from
the obligation set out in paragraph 8 if that undertaking and i ts subsidiary
undertakings are included in the consolidated directors’ report .
11. Public-interest entities which are parent undertakings of a large group
exceeding on its balance sheet dates, on a consolidated basis, the criterion of the
average number of 500 employees during the financial year shall  include in the
consolidated directors’ report a consolidated non-financial sta tement containing
information to the extent necessary for an understanding of the  group's development,
performance, position and impact of its activity, relating to, as a minimum,
environmental, social and employee matters, respect for human r ights, anti-
corruption and bribery matters, including:
(a) a brief description of the group’s business model;
(b) a description of the policies pursued by the group in relation  to those
matters, including due diligence processes implemented;
(c) the outcome of those policies;
(d) the principal risks related to those matters linked to the gro up’s
operations including, where relevant and proportionate, its bus iness
relationships, products or services which are likely to cause a dverse
impacts in those areas, and how the group manages those risks;
(e) non-financial key performance indicators relevant to the parti cular
business.
Where the group does not pursue policies in relation to one or more of those
matters, the consolidated non-financial statement shall provide  a clear and reasoned
explanation for not doing so.
The consolidated non-financial statement referred to in this pa ragraph shall also,
where appropriate, include references to, and additional explan ations of, amounts
reported in the consolidated financial statements.
Information relating to impending developments or matters in th e course of
negotiation may be omitted in exceptional cases where, in the d uly justified opinion
of the directors, the disclosure of such information would be s eriously prejudicial to
the commercial position of the group, provided that such omissi on does not prevent a
fair and balanced understanding of the group’s development, per formance, position
and impact of its activity.
In requiring the disclosure of the information referred to in t his paragraph the
parent undertaking may rely on existing national, Union-based o r international
 314        CAP. 386. ]                         COMP ANIES
frameworks, and if it does so, the parent undertaking shall spe cify which frameworks
it has relied upon.
12. A parent undertaking fulfilling the obligation set out in pa ragraph 11 of this
Schedule shall be deemed to have fulfilled the obligation relat ing to the analysis of
non-financial information set out in sub-articles (2), (5) and (6) of article 177.
13. A parent undertaking which is also a subsidiary undertaking shall be
exempted from the obligation set out in paragraph 11 if that ex empted parent
undertaking and its subsidiaries are included in the consolidat ed directors’ report,
drawn up in accordance with sub-articles (5) and (6) of article  177 and this Schedule.
                    COMP ANIES              [CAP. 386.       315
Company No: ........................
CONTENTS AND FORM OF ANNUAL RETURN 
ANNUAL RETURN of .............................................. ...........................................
............................................................... ......................... (name of the company)
Date to which this return is made up: ......................... ............. 
(being the anniversary of the company’ s date of registration )
1. Address
(Address of the registered office of the company ) 
This form must be completed in BOLD TYPE FORMSEVENTH SCHEDULE Substituted by:
IV . 2003.167;L.N. 425 of 2007.(Article 184)
 316        CAP. 386. ]                         COMP ANIES
2. Summary of Share Capital
All euro amounts are to be preceded by the symbol €. Symbols us ed for other
currencies are to be indicated (where applicable).
Currency  Symbol 
......................................... ..................... .................... 
......................................... ..................... .................... 
......................................... ..................... .................... 
......................................... ...................... ................... 
(a) Nominal Share Capital
Nominal Share Capital ......................................... ................... divided into: 
(Insert number and class) shares of ............................ ..... each
...................... ........................ shares of ........ ......................... each
...................... ........................ shares of ........ ......................... each
...................... ........................ shares of ........ ......................... each
(b) Issued Share Capital
Number     Class
Number of shares of each class
taken up to the date of this return(which number must agree with thetotal shown on the list as held byexisting members). .......................
.................................................................................................................. shares
...................... shares...................... shares...................... shares...................... shares
Number of shares of each class
issued as partly paid up and extentto which each such share is so paidup. issued as paid up to the extent of ..............
per share .................... ................... sharesissued as paid up to the extent of ..............per share .................... ................... sharesissued as paid up to the extent of ..............per share .................... ................... sharesissued as paid up to the extent of ..............per share .................... ................... shares
Total number of shares of each 
class forfeited.Number
........................................................................................Class
.................................. shares.................................. shares.................................. shares.................................. shares
Total amount paid, if any, on 
shares forfeited. ........... .............. ................... ......................
                    COMP ANIES              [CAP. 386.       317
     3. List of Past and Present Members
List of persons holding shares or stock in the company on the d ate to which this
return is made up, and of persons who have held shares or stock  therein at any time
since the date of the last return, or in the case of the first return, of the registration
of the company.
Folio in
register ledger
containing    
particularsNames
Addresses (in the 
case of a body 
corporate, its 
registered office)Account of Shares      Remarks
Number of 
shares held 
by existing     
members at 
the date of 
return*§ Particulars of shares
transferred or transmittedcausa mortis  since  the
date of the last return, or,in the case of the firstreturn, of the registrationof the company by (a)persons who are stillmembers and (b) personswho have ceased to bemembers**
Number
§Date of 
registration   
or transfer 
(a)( b)
 318        CAP. 386. ]                         COMP ANIES
3. List of Past and Present Members (cont. sheet )
* The aggregate number of shares held by each member shall be st ated, and the aggregates
shall be added up so as to agree with the number of the shares stated in the Summary of
Share Capital and Debentures to have been taken up.
§ When the shares are divided into different classes these colum ns should be sub-divided
so that the number of each class held, transferred or transmitt ed causa mortis , may be
shown separately. Where any shares have been converted into sto ck the amount of stock
held by each member shall be shown.
** The date of registration of each transfer or transmission causa mortis  shall be given as
well as the number of shares transferred or transmitted causa mortis  on each date. The
particulars shall be placed opposite the name of the transferor  and not opposite that of
the transferee, but the name of the transferee may be inserted in the "Remarks" column
immediately opposite the particulars of each transfer. (The wor d "transferor" shall mean
the deceased and the word "transferee" shall mean the heir or l egatee, in the case of
transmission causa mortis ).
                    COMP ANIES              [CAP. 386.       319
4. Particulars of Directors
Particulars of the persons who are directors of the company at the date of this return.
5. Particulars of Company Secretary
Particulars of the person who is company secretary of the compa ny at the date of this
return.
Signed ...................................
Director / Company SecretaryName 
(in the case of an individual, name or names and surname. In the case of a body corpo-rate, the corporate name)Nationality Usual residential address
(in the case of a body corporate, the registered office)
Name 
(in the case of an individual, name or names and surname. In the case of a body corporate, the corporate name)Nationality Usual residential address
(in the case of a body corporate, the registered or principal office)
 320        CAP. 386. ]                         COMP ANIES
CONVERSION RULES APPLICABLE ON A CHANGE IN THE CURRENCY 
IN WHICH THE SHARE CAPITAL OF A COMPANY IS EXPRESSED AND 
THE CORRESPONDING PRESENTATION CURRENCY 
Interpretation
1. In this Schedule, unless the context otherwise requires - 
"Presentation currency" shall mean the currency used in present ing the
annual accounts in accordance with the provisions of article 18 7. On a change in
the presentation currency consequent to a change in the currenc y in which the
share capital of a company is expressed which is effected in ac cordance with the
provisions of article 186, the term "original presentation curr ency" shall refer to
the presentation currency in operation before the change; and t he term "new
presentation currency" shall refer to the presentation currency  applicable
following the change, and in the case of the change taking plac e in the first
accounting period, to the presentation currency which would hav e been used had
such change not taken place.
"Exchange rate" means the ratio at which the currencies of two countries are
exchanged at a particular point in time.
"Spot rate" means the middle exchange rate on a particular day for the
exchange of currencies on that day.
"Closing rate" means the spot rate that exists at the balance s heet date which
immediately precedes the accounting period to which the change in presentation
currency applies.
General rule
2. (1) The company’s share capital, its share premium account whe n
applicable, and its reserves shall be converted from the origin al presentation
currency to the new presentation currency in accordance with th e rules set out in
paragraphs 3 and 4 of this Schedule.
(2) All other items in the company’s annual accounts, including comparative
figures where applicable, shall be presented in the new present ation currency in
accordance with generally accepted accounting principles and pr actice.
Conversion rules for share capital and share premium
3. (1) The called-up share capital and the balance on the share p remium
account shall be converted at the exchange rate or rates applic able on the respective
date or dates when the shares in question were issued by the co mpany.
(2) The amount which is still uncalled on any shares issued by t he company
shall be converted at the exchange rate or rates applicable on the respective date or
dates when the shares in question were issued by the company.
(3) The nominal value per share in the new presentation currency  shall be
calculated by taking the aggregate of the called-up share capit al converted as set out
in sub-paragraph (1) of this paragraph and the uncalled amount,  if any, on any shares
issued by the company converted in accordance with sub-paragrap h (2) of thisAmended by:
XV . 2007.15;IX. 2008.43.EIGHTH SCHEDULE
(Article 186)
                    COMP ANIES              [CAP. 386.       321
paragraph, and dividing this aggregate amount (the issued share  capital) by the
number of shares in issue:
Provided that where there exists - 
(a) preference shares or different classes of preference shares; o r
(b) different classes of ordinary shares and where the nominal val ue per
share varies between one class and the other,
the conversion of the nominal value per share to the new presen tation currency shall
be carried out separately for the ordinary shares and the prefe rence shares, or for
each class of ordinary and preference shares in so far as the n ominal value per share
varies between one class and the other, as the case may be.
(4) The authorised share capital of the company shall be convert ed by taking the
aggregate of -
(a) the aggregate amount referred to in sub-paragraph (3) of this paragraph
(the converted issued share capital); and
(b) the amount of the authorised share capital, which has not yet been
issued, converted from the original share capital at the closin g rate.
Conversion rules for reserves
4. (1) Reserves created out of profits, including retained profit s, and
accumulated losses shall be converted at the average annual exc hange rate or rates
pertaining to the accounting period or periods during which the  profits and losses
from which such reserves or accumulated losses originated were earned or incurred.
(2) Reserves which were not created out of profits shall be conv erted at the
exchange rate or rates applicable on the date or dates when suc h reserves were
created.
Presentation currency conversion difference
5. Where following conversion to the new presentation currency a  presentation
currency conversion difference arises, this is not to be recogn ised in the company’s
profit and loss account but is to be recognised as a separate c omponent of equity, and
is to be considered as an unrealised gain or as a realised loss  as applicable.
Disclosure
6. In the first annual accounts following the conversion, the no tes shall include
full details of the method of conversion and the exchange rates  used for the
company’s share capital, its share premium account when applica ble, and its
reserves.
 322        CAP. 386. ]                         COMP ANIES
EXPLANATION OF EXPRESSIONS USED IN SUB-ARTICLE (2) OF 
ARTICLE 2 OF THIS ACT AND PROVISIONS SUPPLEMENTARY 
THERETO
Voting rights in an undertaking
1. ( a) References to voting rights in an undertaking are to the right s conferred
on shareholders in respect of their shares or, in the case of a n
undertaking not having a share capital, on members, to vote at general
meetings of the undertaking on all, or substantially all, matte rs.
(b) References to directors shall be taken to include references t o persons
entrusted with the administration of undertakings not having di rectors
and references to the board of directors shall be taken to incl ude the
equivalent body in such undertakings.
2. In relation to an undertaking which does not have general mee tings at which
matters are decided by the exercise of voting rights, the refer ences to holding a
majority of the voting rights in the undertaking shall be const rued as references to
having the right under the constitution of the undertaking to d irect overall policy of
the undertaking or to alter the terms of its constitution.
Rights to appoint or remove a majority of the directors
3. Reference to the right to appoint or remove a majority of the  board of
directors is to the right to appoint or remove directors holdin g a majority of the
voting rights at meetings of the board on all, or substantially  all, matters.
4. An undertaking shall be treated as having the right to appoin t to a
directorship if -
(a) a person’s appointment to it follows necessarily from his appo intment as
director of the undertaking; or
(b) the directorship is held by the undertaking itself.
5. The right to appoint or remove which is exercisable only with  the consent or
concurrence of another person shall not be taken into account u nless no other person
has a right to appoint or, as the case may be, to remove in rel ation to that
directorship.
Right to exercise dominant influence
6. An undertaking shall not be regarded as having the right to e xercise a
dominant influence over another undertaking unless it has a rig ht to give directions
with respect to the operating and financial policies of that ot her undertaking which
its directors are obliged to comp ly with, whether or not those directions are for the
benefit of that other undertaking.
Rights exercisable only in certain circumstances
7. Rights which are exercisable only in certain circumstances sh all be taken
into account only - 
(a) when the circumstances have arisen, and for so long as they co ntinue toAmended by:
IV . 2003.168.NINTH SCHEDULE
(Article 2)
                    COMP ANIES              [CAP. 386.       323
exist; or
(b) when the circumstances are within the control of the person ha ving the
rights.
8. Rights which are normally exercisable but which are temporar ily incapable of
exercise shall continue to be taken into account.
Rights held by one person on behalf of another
9. Rights held by a person in a fiduciary capacity shall be trea ted as not held by
him.
10. Rights held by a person as nominee for another shall be trea ted as held by
the other.
11. Rights shall be regarded as held by a person as nominee for another if they
are exercisable on that other’s instructions or with his consen t or concurrence.
Rights attributed to parent undertaking12. Rights shall be treated as held by a parent undertaking if t hey are held by
any of its subsidiary undertakings.
Disregard of certain rights13. The voting rights in an undertaking shall be reduced by any rights held by
the undertaking itself.
14. The voting rights in an undertaking shall be reduced by any rights attaching
to shares -
(a) held by way of security, provided that the rights in question are
exercised in accordance with the instructions received; or
(b) held in connection with the granting of loans as part of norma l business
activities, provided that the voting rights are exercised in th e interests of
the person providing the security.
 324        CAP. 386. ]                         COMP ANIES
PART I - REGULATIONS FOR PARTNERSHIPS EN COMMANDITE
OR LIMITED PARTNERSHIPS
Interpretation.
1. (1) In this Schedule, unless the context otherwise requires, t he following
expressions have the meaning hereby assigned to them -
"the Act" means the Companies Act;"base currency" means the currency in which a class of shares o f a Share Capital
Limited Partnership is denominated;
"competent authority" means the competent authority within the meaning of and
appointed for the purposes of the Investment Services Act;
"currency" means, in addition to the euro, any convertible curr ency in terms of
article 186 of this Act;
"fractional share" means a fraction of a whole share in any cla ss of shares issued
by a Share Capital Limited Partnership;
"insolvent" and cognate expressions, in respect of the Limited Partnership, shall
be construed in accordance with paragraph 25(6);
"Limited Partnership" means a pa rtnership en commandite or limi ted partnership
falling within the scope of application of this Schedule as per  paragraph 2 below
and, unless otherwise expressly stated or the context otherwise  requires, it includes
both a Share Capital Limited Partnership and a Non-Share Capita l Limited
Partnership;
"Multi-Class Limited Partnership" means a Share Capital Limited  Partnership
within the terms of paragraph 36;
"Multi-Fund Limited Partnership" means a Limited Partnership wi thin the terms
of paragraph 37;
"Non-Share Capital Limited Partnership" means a Limited Partner ship the capital
of which is not divided into shares;
"Partnership Deed" means the agreement/s in writing of the part ners as to the
affairs of the Limited Partnership and the conduct of its busin ess, as the same may be
amended from time to time as provided in paragraph 10; 
"Partnership Registration Document" means the document delivere d to the
Registrar for registration as referred to in paragraph 7(3);
"partnership interest" or "interest of a partner in the Limited  Partnership" and
cognate expressions, means the totality of the rights, duties a nd obligations of a
partner in a Limited Partnership, including a partner’s capital  contribution, the right
to share in the profits and losses of the Limited Partnership a nd the right to receiveAdded by:
IV . 2003.171.
Amended by:
XIII. 2004.107;XII. 2006.74;L.N. 425 of 2007;IX. 2008.44;L.N. 561 of 2010.Substituted by:L.N. 478 of 2014.TENTH SCHEDULE
(Article 66A)
Partnerships en commandite  or Limited 
Partnerships
                    COMP ANIES              [CAP. 386.       325
distributions of assets of the Limited Partnership;
"Share Capital Limited Partnership" means a Limited Partnership  the capital of
which is divided into shares;
"solvent" and cognate expressions, in respect of the Limited Pa rtnership, shall be
construed in accordance with paragraph 25(6);
"sub-fund" means the distinct class or classes of shares consti tuting that sub-fund
in a Multi-Fund Limited Partnership to which are allocated asse ts and liabilities
distinct from other assets and liabilities allocated to other s ub-funds in the same
Multi-Fund Limited Partnership;
"Variable Capital Limited Partnership" means a Share Capital Li mited Partnership
with variable share capital within the meaning of paragraph 35.
(2) Unless otherwise defined herein or the context otherwise req uires, words
and expressions used in this Schedule shall have the same meani ng as is assigned to
them in article 2(1) of the Act.
(3) Furthermore, the provisions of article 2(2) of the Act, with  the exception of
paragraph ( d) thereof, and the provisions of article 2(3) and article 3 of the Act shall,
to the extent they are stated to be applicable to a partnership  en commandite or
limited partnership or to commercial partnerships in general, a pply to a Limited
Partnership within the meaning of this Schedule.
Scope of application.
2. (1) The provisions of this Schedule shall apply only to partne rships en
commandite or limited partnerships within the meaning of articl e 66A(1) of this Act,
and in particular it shall apply to - 
(a) a partnership en commandite  or limited partnership the capital of which
may or may not be divided into shares, which in the Partnership  Deed
expressly limits its object to the collective investment of its  funds in
securities and in other movable and immovable property, or in a ny of
them, with the aim of giving the partners the benefit of the re sults of the
management of its funds, and to matters ancillary or incidental  thereto,
and which qualifies as a collective investment scheme and is du ly
licensed, recognised, exempted or otherwise regulated in terms of the
Investment Services Act:
Provided that the term "unit" as defined in article 2(1) of the  Investment
Services Act shall, for the purposes of this Schedule, be inter preted
broadly to encompass all forms of partnership interest, and sha ll not be
limited to interests in partnerships en commandite  or limited
partnerships that are structured as unitised funds;
(b) a partnership en commandite  or limited partnership, the capital of which
may or may not be divided into shares, which in the Partnership  Deed
expressly limits its objects to any other purpose as may be pre scribed in
this Schedule or as the Minister may from time to time prescrib e by
regulations.
(2) Notwithstanding what is provided in sub-paragraph (1) above,  one or more
particular provisions of this Schedule may be expressly stated by this Schedule or by
regulations made by the Minister not to apply to one or more ca tegories of Limited
Partnerships set out in sub-paragraph (1)(a) or (b) above, and in such case the said
provisions shall not apply to such category or categories of Li mited Partnerships.
 326        CAP. 386. ]                         COMP ANIES
Application of Part II of the Act.
3. (1)  The provisions of Part II of the Act shall, to the extent  applicable to a
partnership en commandite  or limited partnership, also apply to a Limited
Partnership under this Schedule, save as otherwise provided bel ow -
(a) the provisions of article 4(2) thereof shall be read and const rued and
shall apply as if the reference therein to "one or more acts of  trade"
were, in respect of such Limited Partnership, a reference to "t he objects
specified in the deed of partnership in terms of and as permitt ed by
article 66A, the Tenth Schedule and, or regulations issued by t he
Minister from time to time"; and
(b) the provisions of article 6(4) shall not apply to such Limited
Partnership.
Formation of Limited Partnership.
4. (1) A Limited Partnership may be formed by two or more partner s, at least
one of which shall be a general partner and at least one of whi ch shall be a limited
partner, shall have a separate legal personality, shall operate  under a partnership
name, shall have a capital which may or may not be divided into  shares, and shall
additionally be constituted and be registered as provided in th is Schedule.
(2) A Limited Partnership shall have a legal personality separat e and distinct
from that of its partners, and shall accordingly be the subject  of rights and
obligations, be capable of owning and holding property under an y title at law and of
suing and being sued, in its own name, and such legal personali ty shall continue until
such time as the name of the Limited Partnership shall be struc k off the register,
whereupon the Limited Partnership shall cease to exist.
Constitution of Limited Partnership.
5. (1) A Limited Partnership shall consist of:
(a) one or more general partners who -
(i) are admitted to the Limited Partnership as general partners in
accordance with the Partnership Deed;
(ii) shall be jointly and severally liable for all debts of the Limited
Partnership without limitation, provided that no action shall l ie
against any of the general partners unless the property of thepartnership has first been discussed; and
(iii) each of whom shall satisfy such eligibility and other crit eria and
requirements as are applicable to it, if any, in terms of theInvestment Services Act and Investment Services Rules issued bythe competent authority under and within the meaning of the sai d
Act and, or in terms of the Partnership Deed; and
(b) one or more limited partners who -
(i) are admitted to the Limited Partnership as limited partners in
accordance with the Partnership Deed;
(ii) upon entering the Limited Partnership, contribute, or agree  t o
contribute to the capital thereof a specified sum;
(iii) subject to paragraphs 6(5), 15(2), 16(1) and 25(2), shall not be
liable for any debts of the Limited Partnership beyond the amou nt
so contributed or agreed to be contributed and not yet paid; an d
                    COMP ANIES              [CAP. 386.       327
(iv) satisfy such eligibility and other criteria and requirement s as are
respectively applicable to them, if any, in terms of the Invest ment
Services Act and Investment Services Rules issued by thecompetent authority under and within the meaning of the said Ac t
and, or in terms of the Partnership Deed.
(2) Any person (including, without limitation, a limited liabili ty company) may
be a partner (whether general or limited) in a Limited Partners hip.
(3) The contribution of a limited partner may be satisfied by th e provision of
cash or other property capable of economic assessment but may n ot consist of future
services or undertakings to perform work or supply services; an d where property
other than cash is so provided, the value of the property shall  be deemed to be its fair
market value at the time of its transfer to the Limited Partner ship.
(4) An agreement to pay a share of the profits of a Limited Part nership to a
person in total or partial remuneration for his services shall not, of itself, make him a
partner.
Partnership name.
6. (1) Subject to the provisions of sub-paragraphs (3) and (4), a  Limited
Partnership may be designated by any name, but such name shall end with the words
"Limited Partnership" or its abbreviation "LP" or "L.P.".
(2) No person carrying on any business in Malta, other than a Li mited
Partnership registered under this Schedule or a partner therein , shall in any way or
manner describe itself or himself or so hold itself or himself out or reasonably be
understood to indicate, or use any name which indicates or may reasonably be
understood to indicate that it or he is, or is carrying on busi ness as, a Limited
Partnership registered under this Schedule or, as the case may be, a partner therein.
Without prejudice to the aforesaid, an undertaking which is val idly registered under
the laws of a country other than Malta with a name which includ es "Limited
Partnership" or its abbreviation "LP" or “L.P.”, or a partner t herein, who lawfully
carries on business in Malta, shall not be deemed to be in brea ch of this sub-
paragraph (2) simply by reason o f the fact that it uses and car ries on such business
under the name by which such undertaking is so validly register ed in its country of
registration or, as the case may be, describes himself as a par tner in such undertaking
with such name.
(3) A Limited Partnership shall not be registered by a name whic h -
(a) is the same as the name of another commercial partnership or s o nearly
similar as in the opinion of the Registrar it could create conf usion; or
(b) is in the opinion of the Registrar offensive or otherwise unde sirable; or
(c) has been reserved for registration for another commercial part nership by
notice in writing to the Registrar given not more than three mo nths
before the date of the second request:
Provided that the Registrar shall notify any refusal under this  sub-paragraph
without delay to the person requesting the registration.
Provided further that in applying sub-paragraph (3)( b), the Registrar shall
have regard to the business or proposed business of the Limited  Partnership and to
the protection of the names of individuals who are not connecte d in any way with the
Limited Partnership.
(4) The name of a limited partner or a distinctive part thereof may not form part
 328        CAP. 386. ]                         COMP ANIES
of the name of the Limited Partnership.
(5) A limited partner who knowingly allows his name or a distinc tive part
thereof to be used in the name of a Limited Partnership shall b e liable as a general
partner to any person who extends credit to the Limited Partner ship without
knowledge that the limited partner is not a general partner.
(6) A person who contravenes the provisions of sub-paragraph (2)  shall be liable
to a penalty.
(7) Any person who makes use of a name falsely implying the exis tence of a
Limited Partnership shall be liable to a penalty.
Partnership Deed and Partnership Registration Document.
7. (1) A Limited Partnership shall not be validly constituted unl ess a
Partnership Deed is entered into and signed as provided in this  Schedule and unless a
Partnership Registration Document is duly delivered to the Regi strar and a
certificate of registration is issued by the Registrar under th is Schedule in respect
thereof.
(2) The Partnership Deed shall be in writing and shall be signed  by at least the
first general partner and the first limited partner.
(3) A Partnership Registration Document signed by the first gene ral partner or (if
more than one) by the first general partners shall be delivered  to the Registrar for
registration, which shall state t he following matters, as provi ded in the Partnership
Deed, and for the avoidance of doubt the matters indicated in s ub-paragraph (3)( a) to
(g) below shall also be expressly stated in the Partnership Deed:
(a) the name and residence of the general partner or (if more than  one) of
each of the general partners;
(b) the name of the Limited Partnership;
(c) the registered office in Malta of the Limited Partnership;
(d) the objects of the Limited Partnership;
(e) whether the capital of the Limited Partnership is or is not di vided into
shares, and
(i) in the case of a Share Capital Limited Partnership with fixe d share
capital, a statement of the fact that the Limited Partnership h as a
fixed share capital, the nominal (authorized) share capital of the
Limited Partnership, and where applicable an indication that th e
capital is or is capable of being divided into different classe s of
shares;
(ii) in the case of a Variable Capital Limited Partnership, a st atement
of the fact that the Limited Partnership has a variable sharecapital, and where applicable an indication that the capital is  or is
capable of being divided into different classes of shares, and the
matters indicated in paragraph 35(2) and, or where applicableparagraph 38(4);
(iii) in the case of a Multi-Class Limited Partnership, a statem ent that
the different classes of shares into which the capital is or iscapable of being divided shall not constitute distinct sub-fund s of
the Limited Partnership; and
(iv) in the case of a Multi-Fund Limited Partnership, a statemen t that
                    COMP ANIES              [CAP. 386.       329
the different classes or groups of classes of shares into which  the
capital is or is capable of being divided shall constitute dist inct
sub-funds of the Limited Partnership as may be provided for inthe Partnership Deed, without prejudice to the proviso toparagraph 37(1);
(f) where applicable, in the case of a Multi-Fund Limited Partners hip, the
election referred to in paragraph 38(1);
(g) the period, if any, fixed for the duration of the Limited Part nership, and
where no such period is fixed, a statement to that effect; and
(h) a declaration that the Partnership Deed has been entered into and signed
as provided in this Schedule.
The Partnership Deed may (optionally) also provide for any of t he following
matters, in which case such matters shall also be stated in the  Partnership
Registration Document to be delivered to the Registrar for regi stration:
(i) it may specify whether the administration and representation  of the
Limited Partnership is to be exercised by the general partners jointly or
severally, and unless so specified, such administration andrepresentation shall be exercised severally as provided in para graph
11(1); and, or
(ii) it may expressly provide for the extension of the period, i f any, fixed for
the duration of the Limited Partnership.
(4) Upon receipt of the Partnership Registration Document, the R egistrar, upon
being satisfied that it complies with the requirements of this Schedule, shall register
it.
(5) To the extent so provided in the Partnership Deed, the Partn ership Deed
shall be binding upon the partners and their assigns and upon s ubsequent partners in
the same manner as if those persons had themselves executed the  same.
Duty of Registrar and effects of registration.
8. (1) On the registration of the Partnership Registration Docume nt and the
payment of the fees prescribed under article 66A(3)(d) of this Act, the Registrar
shall certify under his hand that the Limited Partnership is re gistered and the Limited
Partnership shall come into existence and shall be authorised t o commence business
under its name as from the date of the certificate.
(2) A certificate of registration given in respect of a Limited Partnership is
conclusive evidence that the requirements of this Schedule in r espect of registration
have been complied with and that the Limited Partnership has co me into existence
and is duly registered under this Act.
(3) The registration of a Limited Partnership by the Registrar u nder this
paragraph 8 shall be without prejudice to any other licence or other authorisation as
may be required in respect of the activities to be carried on b y the Limited
Partnership under any other law.
Where certificate of registration is not issued.
9. (1) All persons carrying on business under a name falsely impl ying the
existence of a Limited Partnership or carrying on business or e ntering into
agreements in the name of or on behalf of a Limited Partnership  in respect of which
a certificate of registration has not been issued under this Sc hedule, shall, unless
otherwise agreed, be personally and jointly and severally liabl e for their dealings
 330        CAP. 386. ]                         COMP ANIES
with third parties so entered into by them.
(2) Failing agreement to the contrary, the persons referred to i n sub-paragraph
(1) shall have, as against one another and in respect of the as sets and liabilities
arising out of the business carried on as provided in the said sub-paragraph (1), the
rights and obligations of joint owners.
Changes in Partnership Deed and notification of changes.
10. (1) Unless otherwise provided in the Partnership Deed, any al teration or
addition to the Partnership Deed may only be made with the unan imous consent of
the partners, provided that, unless otherwise provided in the P artnership Deed, an
alteration consisting in a change of the registered office in M alta of the Limited
Partnership, shall require only the consent of the general part ners vested with the
administration or representation of the Limited Partnership.
(2) The Limited Partnership shall deliver to the Registrar for r egistration a
return of any change in any of the matters contained in the Par tnership Registration
Document set out in paragraph 7(3) within fourteen days from th e happening thereof,
specifying the date of the change and details of the change.
(3) Where the change in the Partnership Deed consists of the rep lacement of a
general partner by a new general partner or the appointment of any additional
general partner, the return to be delivered to the Registrar un der sub-paragraph (2)
shall specify the name and residence of the new general partner .
(4) Any alteration or addition to the Partnership Deed in respec t of any of the
matters set out in paragraph 7(3) shall not take effect with re spect to third parties,
unless and until it is registered as provided in sub-paragraph (2).
(5) Where the extension of the period, if any, fixed for the dur ation of a Limited
Partnership is expressly provided for in the Partnership Deed a nd stated in the
Partnership Registration Document, the Limited Partnership shal l, notwithstanding
that provision in the Partnership Deed, deliver a notice of ext ension of the period of
duration to the Registrar for registration, and any such extens ion, whether expressly
provided for in the Partnership Deed or otherwise, shall not ta ke effect unless and
until the said notice is delivered to the Registrar and is regi stered by him, and unless
such delivery takes place at least fifteen days before the date  so fixed.
(6) If default is made in complying with the provisions of sub-p aragraph (2) or
sub-paragraph (5), every general partner who is in default shal l be liable to a penalty,
and, for every day during which the default continues, to a fur ther penalty.
(7) Where a Limited Partnership changes its name under the provi sions of sub-
paragraph (2), the Registrar shall enter the new name on the re gister in place of the
former name and shall issue a certificate of registration alter ed to meet the
circumstances of the case:
Provided that the provisions of paragraph 6 shall apply to the registration of
such new name.
Administration and representation.
11. (1) The administration and representation of a Limited Partne rship shall
vest in the general partners, and unless the Partnership Deed a nd the Partnership
Registration Document otherwise provide, such administration an d representation
shall vest in each of the general partners severally:
Provided that, without prejudice to sub-paragraphs (3) to (6) o f paragraph 12,
                    COMP ANIES              [CAP. 386.       331
the Partnership Deed may contain provisions relating to the man ner in which the
representation of the Limited Partnership is to be exercised by  the general partners,
including restrictions on the powers of representation of any g eneral partner, and the
Partnership Deed may also provide that the limited partners sha ll have the right to
participate in decisions relating to the vesting or removal of powers of
administration and representation of the Limited Partnership in  or from the general
partners:
Provided further that, without prejudice to the joint or severa l powers of
administration and representation of the general partners as pr ovided above in sub-
paragraph (1), the said general partners vested with the admini stration and
representation of the Limited Partnership may by power of attor ney authorise any
one of the general partners or any other person, including a li mited partner, to
represent the Limited Partnership in any particular case or cas es and, or for any
particular purpose or purposes.
(2) Legal proceedings by or against a Limited Partnership (inclu ding
proceedings to enforce a foreign judgment or arbitral award by or against the
Limited Partnership) may only be instituted by or against, and generally the judicial
representation of the Limited Partnership shall vest in, the ge neral partners vested
with the administration and representation of the Limited Partn ership; and, subject to
the provisions of sub-paragraphs (3) and (4), no limited partne r shall be a party to or
named in such proceedings or exercise such judicial representat ion; in all cases
without prejudice to the provisos to sub-paragraph (1).
(3) The provisions of sub-paragraph (2) are without prejudice to  the right of any
person to join or otherwise institute proceedings against a lim ited partner -
(a) who is liable for any debt of the Limited Partnership pursuant  t o
paragraphs 6(5), 15(2) or 16(1); or
(b) to obtain payment of his contribution or repayment of any amou nt
pursuant to paragraph 25(2).
(4) A limited partner may, with leave of the court applied by me ans of an
application, institute proceedings on behalf of a Limited Partn ership if -
(a) the general partners have, without good cause, failed or refus ed to do
so; and
(b) the failure or refusal is oppressive to the limited partner or  is prejudicial
to his interests as a limited partner.
How Limited Partnership may be bound.
12. (1) A Limited Partnership may not be bound in favour of third  parties
except by a partner acting under the name of the Limited Partne rship and having the
representation of the Limited Partnership either by virtue of t he Partnership Deed
and as stated in the Partnership Registration Document or by op eration of law,
including by virtue of a power of attorney as referred to in th e second proviso to sub-
paragraph (1) of paragraph 11.
(2) Where any such partner has acted as aforesaid, the Limited P artnership shall
be bound even though it derives no benefit.
(3) Notwithstanding anything contained in the Partnership Deed r elating to the
manner in which the representation of the Limited Partnership i s to be exercised,
anything done by the partners vested with the administration an d representation of a
 332        CAP. 386. ]                         COMP ANIES
Limited Partnership which exceeds the limits of their authority  or by any partner
vested with such administration and representation which is bey ond his powers, shall
be binding on the Limited Partnership unless that act exceeds t he powers granted to
the partners vested with the administration and representation or to such partner so
vested, as the case may be, by virtue of this Schedule.
(4) Any limitation on the powers of the partners vested with the  administration
and representation of a Limited Partnership or of any such part ner shall not be relied
on as against third parties independently of whether that limit ation, published or not,
arises from the Partnership Deed or from a decision of the part ners.
(5) Where an act of the Limited Partnership falls outside the Li mited
Partnership’s objects, the Limited Partnership shall not be bou nd if it proves that,
when the act was done, the third party knew that it was outside  the Limited
Partnership’s objects or the third party could not in view of t he circumstances have
been unaware thereof:
Provided that the publication of the Partnership Registration D ocument and
of any subsequent changes to the matters stated therein shall n ot in itself be
sufficient to prove that the third party knew, or could not hav e been unaware, that the
act was outside the Limited Partnership’s objects.
(6) Notwithstanding the provisions of this Schedule or of the Pa rtnership Deed
relating to the formalities of the appointment of a partner ves ted with the
administration and representation of a Limited Partnership and to his qualification,
any irregularity concerning the appointment of such a partner r aised after the
completion of the publication of his appointment shall not be r elied upon by the
Limited Partnership as against third parties unless the Limited  Partnership proves
that such parties were aware of the irregularity at the relevan t time. Third parties
who were not aware of such irregularities at the relevant time may rely on that
irregularity as against the Limited Partnership.
Acts required to be done by the Limited Partnership.
13. Any return, notice or other communication to the Registrar r equired to be
delivered or made by a Limited Partnership under any provision of this Schedule
shall be deemed to be required to be done by the partners veste d with the
administration and representation of the Limited Partnership, a nd where and for so
long as there are no general partners in the Limited Partnershi p capable or willing to
act within the prescribed time for delivery or making of such r eturn, notice or other
communication, the same may also be delivered or made by any li mited partner.
General Partners.
14. (1) Unless otherwise provided in the Partnership Deed, a gene ral partner of
a Limited Partnership (hereinafter in this paragraph 14 referre d to as the "Relevant
Limited Partnership") shall not, without the express consent of  the other partners or
as otherwise expressly provided in the Partnership Deed:
(a) carry on business on his own account or on account of others i n
competition with the Relevant Limited Partnership;
(b) be a partner with unlimited liability in another commercial pa rtnership
or a director in a company which is in competition with the Rel evant
Limited Partnership;
(c) deal in any manner with any property of the Relevant Limited
Partnership or with rights of the Relevant Limited Partnership in any
such property, for any purpose other than a purpose of the Rele vant
                    COMP ANIES              [CAP. 386.       333
Limited Partnership; or
(d) admit a person as a partner in the Relevant Limited Partnershi p
otherwise than in accordance with the Partnership Deed.
(2) If a partner acts in contravention of the provisions of sub- paragraph (1)( a),
(b) or ( c), the Relevant Limited Partnership may, at its option, either take action for
damages and interest against the offending partner or demand pa yment of any profit
made by him in violation of the relevant prohibition.
(3) The provisions of this paragraph 14 shall be without prejudi ce to any other
remedy which a Limited Partnership may have against a general p artner for breach
of duty.
(4) The provisions of this paragraph 14 or any other provisions of this Schedule
shall also be without prejudice to any other duties, fiduciary or otherwise, which
may be incumbent upon a general partner or to which a general p artner may be
subject by virtue of the Partnership Deed or by virtue of any l aws, regulations, rules
of the competent authority or any condition of any licence or o ther authorisation,
which may be applicable to such general partner.
(5) Save as otherwise expressly provided in this Schedule or in the Partnership
Deed, decisions of the general partners related to the business  of the Limited
Partnership shall be taken by a simple majority of the general partners entitled to
participate in the decision.
Limited partners.
15. (1) A limited partner shall not perform any act of administra tion nor
transact business on behalf of the Limited Partnership, and sha ll not transact the
business of, sign or execute documents for or otherwise bind th e Limited
Partnership, except by virtue of a power of attorney given for specified acts or
transactions or otherwise as provided and in the circumstances contemplated in sub-
paragraph (2) of paragraph 28.
(2) A limited partner who acts or purports to act in contraventi on of the
provisions of sub-paragraph (1), shall be liable as if he were a general partner in
respect of all debts incurred as a result of his so acting.
(3) A limited partner shall not be deemed to have acted in contr avention of the
provisions of sub-paragraph (1) by reason only of any one or mo re of the following
circumstances:
(a) he is an employee, agent or contractor of the Limited Partners hip or of a
general partner thereof;
(b) he acts as an officer, employee or shareholder of a corporate general
partner of the Limited Partnership, or acts as a partner of a g eneral
partner of the Limited Partnership;
(c) he consults with and advises a general partner of the Limited
Partnership as to the business of the Limited Partnership;
(d) he investigates, reviews, approves or is advised as to the acc ounts or
affairs of the Limited Partnership;
(e) he exercises any right or power conferred on limited partners by this
Schedule or any right or power conferred on limited partners by  the
Partnership Deed;
(f) he approves or disapproves an amendment to the Partnership Dee d;
(g) he participates in or requests the appointment or removal of a n auditor
 334        CAP. 386. ]                         COMP ANIES
of the Limited Partnership;
(h) he calls, convenes, requests, attends or participates in, or v otes as a
limited partner in, any meeting of the partners;
(i) he participates in the appointment or removal of any person to  serve or
serving on any board or committee of the Limited Partnership or  of a
general partner thereof;
(j) without prejudice to the generality of sub-paragraph (i), he a ppoints or
removes a representative to any advisory committee of the Limit ed
Partnership and, or undertakes such representative's actions in  that
capacity;
(k) he acts as surety or guarantor of, or provides security for th e obligations
undertaken by, the Limited Partnership;
(l) he lends money to, borrows money from or enters into transacti ons with
the Limited Partnership;
(m) he approves or vetoes a type of investment or particular inves tment to
be made by the Limited Partnership;
(n) he exercises a right to opt into or out of any investment to b e made by
the Limited Partnership;
(o) he approves or vetoes any valuation of the Limited Partnership 's
investments;
(p) he approves or vetoes any conflict of interest relating to the  Limited
Partnership or its business or any partner in the Limited Partn ership.
(4) The provisions of the immediately preceding sub-paragraph sh all not be
construed as meaning that, if a limited partner exercises any o ther right, power or
function, he has necessarily, by reason of that fact alone, act ed in contravention of
the provisions of sub-paragraph (1).
(5) A limited partner may, subject to the provisions of the Part nership Deed and
as and to the extent provided therein, but without prejudice to  any rights granted to
him by virtue of this Schedule -
(a) inspect the books of the Limited Partnership;
(b) with such assistance as may reasonably be required of the gene ral
partners, examine and inquire into the state and prospects of t he
business of the Limited Partnership, and advise the partners th ereon;
(c) request and obtain true and full information of all things aff ecting the
Limited Partnership; and
(d) request and obtain a formal account of the affairs of the Limi ted
Partnership whenever circumstances render it just and reasonabl e.
Person holding himself out to be a general partner.
16. (1) A person, including a limited partner, who holds himself out as being a
general partner shall be held liable unlimitedly and jointly an d severally with the
general partners for all the obl igations contracted by the Limi ted Partnership while
he so holds himself out.
(2) Without prejudice to sub-paragraph (5) of paragraph 6, the i nclusion in the
name of a Limited Partnership of the name of a person who is no t a general partner
shall be taken into account by the court in determining whether  such person is
holding himself out as being a general partner.
                    COMP ANIES              [CAP. 386.       335
When limited partner ceases to be a partner.
17. (1) A person shall cease to be limited partner of a Limited P artnership:
(a) upon the valid and absolute assignment of the whole of his int erest in
the Limited Partnership; or
(b) at such time and, or upon the occurrence of such event as may be so
specified in the Partnership Deed.
Such cessation shall be evidenced by means of an entry to that effect in the
register of partners.
(2) The fact that a person has ceased to be a limited partner sh all not relieve him
of any liability arising under paragraphs 6(5), 15(2), 16(1) an d 25(2).
(3) The fact only that a person ceases to be a limited partner s hall not constitute
a change or amendment to the Partnership Deed.
(4) Unless the Partnership Deed otherwise provides and subject t o the
provisions thereof and to the provisions of paragraph 19 of thi s Schedule, in the
event of death or dissolution or other cessation of existence o f a limited partner, the
Limited Partnership shall continue with the heirs or other rele vant successors in title
to the respective interests of such limited partner in the Limi ted Partnership.
(5) When a person ceases to be a limited partner in a Limited Pa rtnership in the
cases referred to in sub-paragraph (1)( b), such person  shall have such rights as to
liquidation of his interests in the Limited Partnership and oth er rights to assets of the
Limited Partnership, and at such time or times, and shall be su bject to such
obligations, as may be provided for in the Partnership Deed.
When general partner ceases to be a partner.
18. (1) A person shall, subject to the provisions of the Partners hip Deed, cease
to be a general partner of a Limited Partnership, upon the occu rrence of any of the
following events:
(a) his resignation, retirement, removal or expulsion in accordanc e with the
requirements, if any, of the Partnership Deed;
(b) in the case of a natural person his bankruptcy, death or legal  incapacity
or interdiction; or
(c) in the case of a general partner which is a body corporate, th e
dissolution thereof.
Such cessation shall be evidenced by means of an entry to that effect in the
register of partners.
(2) In the cases referred in sub-paragraphs (1)( b) and ( c), the curator or other
person having similar functions with respect to the estate of t he bankrupt general
partner, the heirs or other relevant successors to the estate o f the deceased general
partner, the guardian, tutor or other person having similar fun ctions with respect to
the estate of the incapacitated or interdicted general partner,  or the liquidator,
directors, general partners or equivalent body or persons charg ed with the
responsibility of the administration of the affairs of the diss olved general partner
after its dissolution, as the case may be, shall have a duty to  inform the Limited
Partnership of the respective event mentioned in such sub-parag raphs (1)( b) and ( c)
as soon as possible and in no case later than ten days followin g the happening
thereof.
(3) In the event of the cessation of a person as a general partn er of a Limited
 336        CAP. 386. ]                         COMP ANIES
Partnership, howsoever such cessation has occurred, it shall be  the duty of the
Limited Partnership to deliver to the Registrar for registratio n a notice of such fact
within fourteen days of such cessation or from the date that th e Limited Partnership
became aware thereof, whichever is the later, and in default th e Limited Partnership
and every general partner shall be liable to a penalty, and, fo r every day during
which the default continues, to a further penalty.
(4) In the cases referred in sub-paragraph (1)( a), it shall also be the duty of the
person ceasing to be a general partner to deliver to the Regist rar for registration a
notice of such cessation within fourteen days of such cessation , and in default the
said person who ceased to be a general partner shall be liable to a penalty, and, for
every day during which the default continues, to a further pena lty.
(5) The Registrar shall cause such notice as referred to in sub- paragraph (3) or
(4) to be registered.
(6) A general partner shall not be relieved of any obligation un der this Schedule
until such time as the notice of cessation is registered by the  Registrar.  Nothing in
the foregoing shall affect the continued liability of a general  partner in terms of law
for his obligations arising whils t he was a general partner and  until the registration
of the notice of cessation as aforesaid.
Admission of additional limited partners.
19. (1) Subject to the provisions of the Partnership Deed, a Limi ted Partnership
shall allow any number of partners to become limited partners i n the Limited
Partnership. A person shall not be admitted as a limited partne r in a Limited
Partnership except -
(a) in accordance with the provisions of the Partnership Deed and subject to
any prior approval by the Limited Partnership required for suchadmission in terms of the Partnership Deed and, or pursuant toparagraph 5(1)( b)(iv) above;
(b) by the execution of an agreement in writing with the Limited
Partnership and, or with such other partners as required by thePartnership Deed.
Such admission shall be evidenced by the entry of the particula rs of the new
limited partners in the register of partners.
Assignment of interest of limited partner.
20. (1) Subject to the provisions of the Partnership Deed -
(a) the interest of a limited partner is assignable in whole or in  part;
(b) an assignment by a limited partner of his interest in the Limi ted
Partnership or any part thereof:
(i) shall not dissolve the Limited Partnership;
(ii) shall not be valid unless made in writing and in accordance  with
other requirements, if any, of the Partnership Deed and thisSchedule, including (without limitation) any prior approval by the
Limited Partnership required for such assignment in terms of th e
Partnership Deed and paragraph 5(1)( b)(iv) above;
(iii) shall not, unless and until the assignee is admitted to th e Limited
Partnership as a limited partner in accordance with the provisi ons
of paragraph 19, entitle the assignee to become or to exercise any
right or power of a limited partner;
                    COMP ANIES              [CAP. 386.       337
(iv) shall, upon the assignee being admitted to the Limited Part nership
as a limited partner in accordance with the provisions ofparagraph 19, entitle the assignee to the rights and powers and ,
subject to item (v), render him subject to the restrictions andobligations (including any obligation to make contributions to the
capital of the Limited Partnership) to which the assignor wasentitled or subject in respect of the interest assigned immedia tely
before the assignment, and simultaneously the assignor shall nolonger be entitled to exercise those rights and powers and, sha ll be
discharged from those restrictions and obligations;
(v) shall not relieve the assignor of any liability arising unde r
paragraphs 6(5), 15(2), 16(1) or 25(2).
(c) a limited partner, upon the valid and absolute assignment of t he whole
of his interest in the Limited Partnership and the admission of  the
assignee as a limited partner in accordance with the provisions  o f
paragraph 19, shall cease to be a limited partner and to be ent itled to
exercise any right or power of a limited partner.
(2) The agreement or instrument of assignment in writing referre d to in sub-
paragraph (1)( b)(ii) or an authentic copy thereof shall be delivered by the as signor or
the assignee to the Limited Partnership simultaneously with or as soon as possible
after the execution thereof, unless the Limited Partnership is also party to it. 
(3) The admission of the assignee as a limited partner and the a ssignment of an
interest in the Limited Partnership between an assignee and an assignor shall be
effective on the date when the requirements and conditions for the admission of the
assignee as a limited partner referred to in paragraph 19 and t he requirements of sub-
paragraph (1)( b)(ii) and (2) of this paragraph  20 have been satisfied or, if l ater, the
date agreed to between the assignor and the assignee in the agr eement or instrument
of assignment, and in such latter case the assignee shall be ad mitted to the Limited
Partnership with effect from such later date.
Indemnification by the Limited Partnership.
21. (1) Subject to the provisions of the Partnership Deed and of sub-paragraph
(2), a Limited Partnership may indemnify any partner from and a gainst all or any
claims, demands, debts and other liabilities whatsoever, and ma y also purchase and
maintain for any partner insurance against any such liability a s aforesaid.
(2) The Limited Partnership may not however indemnify any genera l partner
against any liability which by virtue of any rule of law would attach to him in respect
of negligence, default or breach of duty or otherwise of which he may be guilty in
relation to the Limited Partnership:
Provided that a Limited Partnership may indemnify any such gene ral partner
against any liability incurred by him in defending any proceedi ngs in which
judgment is given in his favour or in which he is acquitted:
Provided further that nothing in this sub-paragraph (2) shall b e construed as
preventing or restricting a Limited Partnership from purchasing  and maintaining for
any general partner insurance against any such liability as is referred to above in this
sub-paragraph (2), or as preventing or restricting any such gen eral partner from
personally purchasing and maintaining any such insurance.
Records.
22. (1) A Limited Partnership shall maintain the following or a c opy thereof at
 338        CAP. 386. ]                         COMP ANIES
the registered office:
(a) the Partnership Deed and every amendment thereof;
(b) a register of partners showing their full names and addresses together
with an indication of who is a general and who is a limited par tner;
(c) in the case of a Non-Share Capital Limited Partnership, the ca pital
account of each limited partner showing whichever of the follow ing is
applicable in relation to such limited partner -
(i) the amounts and dates of his contributions;
(ii) the amounts agreed to be contributed and the times at which  or
events upon which the contributions are to be made;
(iii) the amounts and dates of any payments representing a retur n of
his contributions or any part thereof;
(iv) where an agreement or obligation to make a contribution is
released in whole or in part, the amount and the date of suchrelease;
(d) in the case of a Share Capital Limited Partnership, the capita l account of
each limited partner showing whichever of the following is appl icable
in relation to such limited partner -
(i) the number and class or classes (where applicable) of shares ,
including fractions (where applicable), subscribed by such limi ted
partner and the dates of subscription;
(ii) the amount paid by such limited partner in respect of each share;
(iii) where applicable, the amounts agreed to be contributed by way of
subscription of further shares or by way of payment of the unpa id
part on shares already subscribed, and the times at which orevents upon which the contributions are to be made;
(iv) where applicable, the number and class or classes (where
applicable) of shares, including fractions (where applicable), of
such limited partner which have been redeemed or repurchased bythe Limited Partnership or otherwise reduced, and the dates ofsuch redemption, repurchase or reduction;
(v) where an agreement or obligation to pay amounts agreed to be
contributed by way of subscription of further shares or by way of
payment of the unpaid part on shares already subscribed isreleased in whole or in part, the amount and the date of suchrelease;
(e) any report on any non-cash contribution as referred to in para graph 41;
(f) a register of debentures (where the Limited Partnership has is sued any
debentures) showing the full names and addresses of the registe red
holders of such debentures and particulars of the debentures he ld by
them respectively;
(g) its accounting records;
(h) the minutes of all meetings of the general partners;
(i) all documents from time to time filed with the Registrar.
(2) All documents or copies of documents required by sub-paragra ph (1) to be
kept at the registered office shall, subject to the provisions of the Partnership Deed,
be available for inspection by any partner, and in the case of the register of
debentures also by any person, during normal business hours.
                    COMP ANIES              [CAP. 386.       339
(3) The documents mentioned in sub-paragraph (1)( b), (c) and ( d) shall
constitute prima facie  evidence of the matters specified therein.
(4) Notwithstanding the foregoing provisions of this paragraph t he documents
described in sub-paragraph (1) may, provided that the Partnersh ip Deed so permits,
instead of being maintained at the registered office, be mainta ined at such other
place as the general partners consider appropriate, where they shall, subject to the
provisions of the Partnership Deed, be available for inspection  by any partner (and in
the case of the register of debentures also by any person) duri ng normal business
hours.
(5) In the event that such other place as is mentioned in sub-pa ragraph (4) is
outside Malta, copies of accounts and of returns in respect of the business dealt with
in them and copies of minutes of meetings of general partners s hall be sent to, and
kept at, a place in Malta, where they shall, subject to the pro visions of the
Partnership Deed, be available for inspection by any partner (a nd in the case of the
register of debentures also by any holder of debentures) during  normal business
hours.
(6) The copies of accounts and returns mentioned in sub-paragrap h (5) which
are to be sent to and kept in Malta shall be such as to disclos e with reasonable
accuracy the financial position of the business of the Limited Partnership at intervals
not exceeding six months.
(7) Any accounting records which a Limited Partnership is requir ed by this
paragraph to keep shall be preserved by it for a period of ten years from the date on
which they are made and, if default is made in complying with t his sub-paragraph,
the Limited Partnership and each general partner shall be liabl e to a penalty.
(8) Any account, record or other document required by this Sched ule to be kept
by a Limited Partnership may be kept either by making entries i n books or in any
other manner, including without prejudice to the generality of the foregoing,
computer or other electronic forms.
(9) If any such account, record or other document is kept by mak ing entries
other than in a book -
(a) it shall be deemed for the purposes of this Schedule to be kep t at a place
if access to it and written copies of it can be obtained at tha t place; and
(b) if the matters in question are recorded in non-legible form, t he
recording thereof shall be capable of being reproduced in legib le form.
(10) If in respect of a Limited Partnership there is a contraven tion of any of the
provisions of sub-paragraphs (1), (2), (5) or (6), the Limited Partnership and each
general partner shall be liable to a penalty and for any day du ring which the default
continues, to a further penalty.
(11) Any duty imposed by this Schedule to allow inspection, or t o furnish a copy,
of documents to be kept by the Limited Partnership shall, irres pective of the medium
in which such documents are maintained, be construed as a duty to allow inspection,
or to furnish a copy, of such documents in legible form.
Accounts of a Limited Partnership.
23. (1) Every Limited Partnership shall maintain proper accountin g records
which shall be:
(a) sufficient to show and explain the Limited Partnership’s trans actions;
(b) such as to disclose with reasonable accuracy, at any time, the  Limited
 340        CAP. 386. ]                         COMP ANIES
Partnership’s financial position at that time;
(c) such as to enable the general partners to ensure that the Limi ted
Partnership’s balance sheet and profit and loss account are pre pared
properly and in accordance with generally accepted accountingprinciples and practice and in accordance with any relevant ena ctment
or regulations for the time being in force in Malta;
(d) such as to contain day to day entries of all sums of money rec eived and
expended by the Limited Partnership and the matters in respect of which
the receipt and expenditure takes place; and
(e) such as to contain a record of the assets and liabilities of t he Limited
Partnership.
(2) The general partners of every Limited Partnership shall prep are for each
accounting period individual accounts comprising the balance sh eet as at the last day
of the accounting period to which they refer, the profit and lo ss account for that
period, the notes to the accounts and any other financial state ments which may be
required by generally accepted accounting principles and practi ce. These documents
shall constitute a composite whole.
(3) The individual accounts of a Limited Partnership shall give a true and fair
view of the Limited Partnership’s assets, liabilities, financia l position and profit or
loss.
(4) The individual accounts of a Limited Partnership shall be dr awn up in
accordance with generally accepted accounting principles and pr actice applicable to
the type of Limited Partnership in question in terms of this Sc hedule or of the
provisions of this Act in so far as such provisions are applica ble to the Limited
Partnership by virtue of this Schedule, or of regulations made by the Minister under
Article 66A(3)(c) or other provisions of this Act or under the Accountancy
Profession Act, and shall comply with the requirements of such generally accepted
accounting principles and practice and with the requirements of  this Schedule, and of
the applicable provisions of this Act and of applicable regulat ions referred to above,
as to the form and content of the balance sheet and profit and loss account and as to
additional information to be provided by way of notes to the ac counts.
(5) Where the application of the provisions of this Schedule, an d the applicable
provisions of the Act or regulations referred to in sub-paragra ph (4), would not be
sufficient to give a true and fair view within the meaning of s ub-paragraph (3),
additional information shall be given.
(6) Where in exceptional cases the application of a provision of  this Schedule,
or of an applicable provision of the Act or of regulations refe rred to in sub-paragraph
(4), is incompatible with the obligation for the individual acc ounts to give a true and
fair view, that provision shall be departed from in order to gi ve a true and fair view.
Any such departure shall be disclosed in the notes to the accou nts together with an
explanation of the reasons for it and a statement of its effect  on the assets, liabilities,
financial position and profit or loss.
(7)*Articles 13 to 18 and 21 of the Commercial Code shall not apply  to Limited
Partnerships.
(8) At the end of each accounting period of the Limited Partners hip, the balance
sheet and profit and loss account of the Limited Partnership to gether with the report
of the general partners and the report of the auditors (where a pplicable) shall be
* This-sub-paragraph is not yet in force.
                    COMP ANIES              [CAP. 386.       341
made available to the limited partners:
(a) in the case of a Limited Partnership within the meaning of par agraph
24(2), within ten months after the end of the relevant accounti ng
reference period, or such shorter period as may be prescribed i n terms of
the Investment Services Act and Investment Services Rules issue d by
the competent authority under and within the meaning of the sai d Act;
and
(b) in the case of other Limited Partnerships, within such period as may be
stipulated in the respective Partnership Deed, or such shorter period as
may be prescribed in terms of the Investment Services Act andInvestment Services Rules issued by the competent authority und er and
within the meaning of the said Act or in terms of regulations m ade by
the Minister under Article 66A(3)( c) or other provisions of this Act.
Application of Chapters IX and X of Part V of this Act.
24. (1) Save for what is stated in this Schedule or in regulation s made by the
Minister under Article 66A(3)(c) or other provisions of this Ac t or under the
Accountancy Profession Act, the provisions of Chapter IX and Ch apter X of Part V
of this Act other than article 184 shall, so far as applicable and so far as they are not
inconsistent with the provisions of this Schedule or of regulat ions referred to above,
apply to a Limited Partnership within the meaning of paragraph 24(2), with
references to "company" therein being construed as a reference to a Limited
Partnership within the meaning of paragraph 24(2), references t o "directors" being
construed as a reference to general partners, reference to "mem bers" being construed
as a reference to "partners", references to "general meeting" b eing construed as a
reference to a meeting of the partners.
(2) A Limited Partnership referred to in sub-paragraph (1) shall  be:
(a) a Limited Partnership which is a Share Capital Limited Partner ship; or
(b) a Non-Share Capital Limited Partnership where:
(i) all the partners thereof with unlimited liability are limite d liability
companies or partnerships en commandite  or limited partnerships
with the capital divided into shares; and
(ii) where all of the direct or indirect partners of such Non-Sh are
Capital Limited Partnership having otherwise unlimited liabilit y
in fact have limited liability by reason of those partners bein g:
(aa) a limited liability company (whether public or private); or
(bb) a partnerships en commandite or limited partnership with its
capital divided into shares; or
(cc) an undertaking not governed by the laws of Malta but which
has a legal form comparable to that listed in sub-paragraph(b)(ii)( aa) or (b)(ii)( cc) above.
(3) The provisions of Chapter IX of Part V of this Act, shall ap ply as aforesaid
to a Limited Partnership within the meaning of paragraph 24(2),  subject to the
provisions of the Partnership Deed dealing with the manner, and  with the rights of
partners or any of them in respect, of the appointment, re-appo intment, removal,
replacement and fixing the remuneration of auditors of the Limi ted Partnership.
(4) The provisions of article 169 of the Act and of the Fifth Sc hedule to the Act
shall apply mutatis mutandis  to a Limited Partnership within the meaning of
paragraph 24(2) which is a Variable Capital Limited Partnership  as provided in
 342        CAP. 386. ]                         COMP ANIES
paragraph 35.
(5) Save as otherwise expressly provided in this Schedule or in any enactment
or in regulations made by the Minister as referred to in sub-pa ragraph (1), the
provisions of Chapter IX and Chapter X of Part V of this Act sh all not apply to a
Limited Partnership which is not a Limited Partnership within t he meaning of
paragraph 24(2), and the manner, the rights of partners or any of them in respect of,
and other matters relating to, the appointment, re-appointment,  removal, replacement
and fixing the remuneration of auditors of such Limited Partner ship, or the
preparation, form and content and approval of the accounts of s uch Limited
Partnership and their submission to the partners or any other p artners, shall be
regulated by the relevant provisions of this Schedule, by regul ations made from time
to time by the Minister as referred to in sub-paragraph (1) for  this purpose, by any
other provisions of the Act (other than Chapter IX and Chapter X of Part V of the
Act) or any other enactment so far as applicable and so far as they are not
inconsistent with the provisions of this Schedule or of regulat ions referred to above
or which specifically relate or apply to such Limited Partnersh ips, and by the
provisions of the Partnership Deed.
Return of limited partner’s contribution.
25. (1) A Limited Partnership shall not, on dissolution or otherw ise, make any
payment from its capital to any limited partner representing a return of any part of
his contribution to the Limited Partnership unless, at the time  of and immediately
following the making of the payment, the Limited Partnership is  solvent.
(2) Where the Limited Partnership is insolvent at the time of or  immediately
following the making of any such payment, or in the event of in solvency of the
Limited Partnership within a period of six months immediately f ollowing the time of
making such payment, the payment shall, for a period of one yea r from the date of its
receipt by the limited partner, be repayable by him to the exte nt necessary to
discharge any debt of the Limited Partnership incurred at a tim e when his
contribution formed part of the assets of the Limited Partnersh ip.
(3) Subject to the provisions of sub-paragraphs (1) and (2) and paragraph 30(11)
and (12), a limited partner may demand the return of his contri bution -
(a) on the dissolution of the Limited Partnership; or
(b) at such time or upon the occurrence of such event or events as  may be
specified in the Partnership Deed.
(4) A limited partner may, notwithstanding the nature of his con tribution,
demand and receive only money in return, unless -
(a) the Partnership Deed provides otherwise; or
(b) all partners agree otherwise.
(5) Any reference in this paragraph, however expressed, to the r eceipt by a
partner of a payment shall include a reference to the release o f any debt owed by him
and forming part of the assets of the Limited Partnership (incl uding any obligation
on his part to make a contribution to the capital of the Limite d Partnership,
including, in case of a Share Capital Limited Partnership, by w ay of subscribing for
further shares or paying up the unpaid part on shares already s ubscribed by him); and
accordingly any reference in sub-paragraph (2) to the making of  a repayment by a
partner shall be deemed to include a reference to the due perfo rmance by him of the
debt or obligation.
(6) For the purposes of this Schedule the expression "solvent" m eans that the
                    COMP ANIES              [CAP. 386.       343
Limited Partnership is able to pay its debts (other than debts described in paragraph
31(1)(c)(ii) to (v)) in full, as they fall due, out of the asse ts of the Limited
Partnership without recourse to the separate assets of the gene ral partners not
contributed to the Limited Partnership; and the expression "ins olvent" shall be
construed accordingly.
(7) A distribution of any assets of a Limited Partnership to a l imited partner
shall be deemed to be a return o f contribution for the purposes  of the provisions of
sub-paragraph (1), to the extent that the distribution reduces the value of his share in
the assets of the Partnership, calculated on the basis of the v alue of the net assets of
the Limited Partnership, below th e value of the amount contribu ted or agreed to be
contributed by him.  In the case of a Share Capital Limited Par tnership, there shall
also be deemed to be such a return of contribution where the sh ares held by a limited
partner are redeemed or repurchased by the Limited Partnership or are otherwise
reduced or, in the case of a Share Capital Limited Partnership other than a Variable
Capital Limited Partnership, where the nominal value of the sha res held by a limited
partner is reduced.
(8) The provisions of this paragraph are subject to those of par agraph 31.
Distributions by Limited Partnership.26. Without prejudice to paragraphs 25 and 31, no distributions of capital or
profits shall be made to the partners if at the time or as a re sult of such distributions
the Limited Partnership would be insolvent.
Acts in fraud of creditors
27. (1) Without prejudice to paragraphs 25 and 26, every act tran sferring
property, whether corporeal or incorporeal, including any right s of action and any
renunciation of an acquired prescription, and every obligation incurred or other act
made by a Limited Partnership which is insolvent or which becom es insolvent as a
result of such act or obligation, and which is made under a gra tuitous title for the
purpose of defrauding the creditors of the Limited Partnership,  shall be null and void
as regards the body of creditors, of whatever kind they may be,  even though the
parties interested be in good faith.
(2) Every act of the same kind and every obligation made or incu rred under an
onerous title can be annulled if there be fraud also on the par t of the party interested.
(3) Any such act or obligation shall be deemed to be fraudulent as regards the
party interested, if it is proved that such party knew of the i nsolvency of the Limited
Partnership (whether already existing at the time of the act or  obligation or resulting
from such act or obligation) or of the existence of circumstanc es giving rise to such
insolvency.
Causes of dissolution of Limited Partnerships.
28. (1) A Limited Partnership shall be dissolved upon the occurre nce of any of
the following events:
(a) upon the happening of any event specified in the Partnership D eed;
(b) upon the date fixed for its duration in the Partnership Deed a nd stated in
the Partnership Registration Document, if any, unless a return or notice
of its extension is delivered to the Registrar for registration  in terms of
paragraph 10(2) or (5) not less than fifteen days before the da te so
fixed;
(c) upon the written agreement of all partners that the Limited Pa rtnership
 344        CAP. 386. ]                         COMP ANIES
shall be dissolved;
(d) if there is no general partner for a period of six months;
(e) if there is no limited partner for a period of six months.
(2) Where no general partner remains, the limited partners may, for the said
period of six months, appoint one of their number or any other person for the
performance of acts of ordinary administration and any limited partner or other
person appointed pursuant to the provisions of this sub-paragra ph shall not incur any
liability which would otherwise be incurred under this Schedule  for performing acts
of ordinary administration during the said six month period.
(3) Subject to the provisions of the Partnership Deed and paragr aph 28(1)(a),
(d) and (e) and without prejudice to paragraph 28(1)(c), a Limi ted Partnership shall
not be dissolved by any change in the limited partners or gener al partners, or by the
bankruptcy, insolvency, death, re tirement, removal, resignation , legal incapacity or
interdiction or dissolution of any limited partner or general p artner whether an
individual, partnership, company or other body corporate.
Dissolution by the Court.
29. (1) The Court may order the dissolution of a Limited Partners hip on the
application of any partner or creditor or on the application of  the Registrar if in its
opinion:
(a) the Limited Partnership is insolvent;
(b) the business of the Limited Partnership has been suspended for  a n
uninterrupted period of twelve months: provided, for the avoida nce of
doubt, that there will not be deemed to be a suspension of busi ness for
the purposes hereof by reason only of the fact that the busines s of the
Limited Partnership is of its nature passive;
(c) the affairs of the Limited Partnership are being conducted in a manner
which is oppressive to any of the limited partners or prejudici al to their
interests as limited partners or is calculated to affect advers ely the
carrying on of the business of the Limited Partnership;
(d) the affairs of the Limited Partnership are being conducted in such
manner as to defraud creditors or in an unlawful manner;
(e) there has been persistent default by the Limited Partnership o r by any
general partner thereof in complying with the requirements of t his
Schedule or any applicable regulations made under Article 66A(3 ) or
under this Act;
(f) there are grounds of sufficient gravity to warrant the dissolu tion.
(2) Upon the making of an order under sub-paragraph (1) for the dissolution of
the Limited Partnership or at any time thereafter, the Court ma y make such other
orders in relation to the dissolution as it thinks fit and prop er in the circumstances,
including an order for the appointment of one or more liquidato rs to wind up the
Limited Partnership’s affairs and distribute its assets.
General provisions applicable to winding up.
30. (1) Upon the dissolution of a Limited Partnership its affairs  shall, unless a
liquidator has been appointed by the Court under paragraph 29(2 ) or under sub-
paragraph (2) of this paragraph or by the partners under sub-pa ragraph (3) of this
paragraph, be wound up by the general partners.
                    COMP ANIES              [CAP. 386.       345
(2) Upon the dissolution of a Limited Partnership or at any time  thereafter, the
Court may, on application of any partner (including an assignee  thereof) or any
creditor or the Registrar or any liquidator, make such orders i n relation to the
dissolution as it thinks fit and proper, including:
(a) an order for the appointment of one or more liquidators to win d up the
affairs of the Limited Partnership and distribute its assets, a nd the fixing
of his remuneration;
(b) an order for the stay of judicial proceedings pending against the Limited
Partnership on such terms as the Court thinks fit.
The Court may also, on any such application, remove any liquida tor from
office (whether appointed by the Court or by the partners) if t he court is satisfied
that there exist sufficient grounds to warrant his removal.
(3) One or more liquidators may, upon the dissolution of a Limit ed Partnership
or at any time thereafter and before the appointment thereof by  the Court as provided
herein, be appointed by the partners in the manner provided in the Partnership Deed
or as determined by agreement between them, and his remuneratio n may be fixed in
like manner.  Where the partners fail to agree on the appointme nt of a liquidator, the
provisions of sub-paragraphs (1) shall apply, unless and until one or more liquidators
are appointed by the Court under sub-paragraph (2).
(4) A liquidator appointed by the partners (but not a liquidator  appointed by the
Court) may be removed by a decision of the partners in the mann er provided in the
Partnership Deed or as determined by agreement between them, an d if as a result of
such decision there are no liquidators, the provisions of sub-p aragraphs (1) shall
apply, unless and until one or more liquidators are appointed b y the partners under
sub-paragraph (3) or by the Court under sub-paragraph (2).
(5) A liquidator, howsoever appointed, shall within fourteen day s after his
appointment, deliver to the Registrar for registration a notice  of his appointment
stating his name and residence, and in default he shall be liab le to a penalty, and for
every day during which the default continues, to a further pena lty.
(6) Where more than one liquidator is appointed, they shall act jointly and shall
be jointly and severally liable for their acts, unless the Cour t or the partners who
appointed them have otherwise provided. Unless already fixed by  the Court, the
remuneration of a liquidator (whether appointed by the Court or  by the partners) may
be fixed by agreement between the partners and the liquidator, failing which it shall
be fixed by the Court on application made under sub-paragraph ( 2) or an application
by the liquidator.
(7) On the appointment of a liquidator, whether under this parag raph or under
paragraph 29, all powers of the general partners and, where app licable, any power of
ordinary administration vested in any limited partner or other person pursuant to
paragraph 28(2), shall cease; and any person who purports to ex ercise any power of a
general partner or any power of administration or representatio n of the Limited
Partnership at a time when, pursuant to this sub-paragraph thos e powers have ceased,
shall be liable to a penalty, without prejudice to the provisio ns of paragraph 15(2) or
16(1) or any other applicable consequences prescribed by this S chedule. The
provisions of this sub-paragraph shall be without prejudice to the provisions of sub-
paragraph (8).
(8) Where a liquidator is appointed, the partner or partners ves ted with the
administration of the Limited Partnership shall -
(a) deliver to the liquidator all the assets and all the accountin g records and
 346        CAP. 386. ]                         COMP ANIES
other documents of the Limited Partnership and shall draw up ac counts
relating to their administration for the period since the prece ding
accounts, and for the avoidance of doubt the liquidator shall t ake into
his custody or under his control all the property and all right s to which
he has reasonable cause to believe the Limited Partnership to b e
entitled; and
(b) together with the liquidator, draw up a balance sheet showing the state
of affairs of the Limited Partnership as at the date of the dis solution.
(9) Upon the dissolution of a Limited Partnership the Limited Pa rtnership shall
cease to carry on business except to the extent necessary for i ts beneficial winding
up. Where a liquidator is appointed, such liquidator shall have  power to perform all
acts conducive and ancillary to the winding up of the affairs o f the Limited
Partnership, but such liquidator shall not undertake any new tr ansaction, except to
the extent necessary for its beneficial winding up. Where in re lation to a Limited
Partnership there is a contravention of the provisions of this sub-paragraph, each
general partner or other partner responsible for the contravent ion or, as the case may
be, the liquidator shall be liable to a penalty.
(10) Upon the dissolution of a Limited Partnership, the persons winding up the
Limited Partnership’s affairs, in the name of and on behalf of the Limited
Partnership -
(a) may, to the extent necessary for the beneficial winding up of the
Limited Partnership, prosecute, defend or settle any civil or c riminal
action or other legal proceedings and refer disputes or matters  t o
arbitration;
(b) shall receive and collect all sums and debts due to the Limite d
Partnership;
(c) shall take every necessary step for the preservation of the ri ghts of the
Limited Partnership and for the recovery of any sums or debts d ue to the
Limited Partnership;
(d) shall carry on the business of the Limited Partnership so far as may be
necessary for its beneficial winding up, and for this purpose t hey shall
have the power to do all acts, and to execute, in the name and on behalf
of the Limited Partnership, all deeds, receipts and other docum ents and
to represent the Limited Partnership in all matters and to do a ll things as
may be necessary for the winding up of the affairs of the Limit ed
Partnership and distributing its assets, to raise any money req uisite even
on the security of the assets of the Limited Partnership and to  appoint a
mandatory to act for them (in their capacity as the persons res ponsible
for the winding up) for particular purposes;
(e) shall dispose of the Limited Partnership’s property and realis e its assets;
(f) shall, in accordance with the provisions of paragraph 31 disch arge the
Limited Partnership’s debts and distribute to the partners any remaining
assets of the Limited Partnership;
(g) may make any compromise or arrangement with creditors or perso ns
claiming to be creditors, or having or alleging themselves to h ave any
claim, present or future, certain or contingent, ascertained or  which may
be due in damages against the Limited Partnership or whereby th e
Limited Partnership may be rendered liable, and to refer any su ch
matter to arbitration;
                    COMP ANIES              [CAP. 386.       347
(h) may make calls on partners for payment of unpaid contributions  and
calls on partners with unlimited liability for payment of sums to cover
remaining liabilities of the Limited Partnership as referred to  in sub-
paragraph (12) and shall draw up a list of partners who are lia ble to pay
such calls; and
(i) may summon meetings of partners or of creditors of the Limited
Partnership for the purposes of ascertaining their wishes, or t o give
them an account of or otherwise update them on the process of t he
winding up or any matter relating thereto or for any other purp ose in
connection with the winding up as they may think fit:
Provided that the above shall be without prejudice to the perso nal liability of
the partners.
(11) Upon the dissolution of a Limited Partnership no limited pa rtner may, except
in accordance with the provisions of paragraphs 25 and 31, with draw any part of his
contribution, or otherwise claim as a creditor of the Limited P artnership.
(12) The persons conducting the winding up of a Limited Partners hip (whether a
liquidator or the general partner or general partners pursuant to sub-paragraph (1))
shall not distribute any assets of the Limited Partnership amon g the partners unless
either the debts and liabilities of the Limited Partnership und er paragraph 31(1) ( a)
and ( b) have been paid or sufficient funds have been set aside for th e payment
thereof. Where the assets of the Limited Partnership are insuff icient to meet its
aforesaid liabilities, the persons conducting the winding up of  a Limited Partnership
may demand from the partners payment of the contribution, if an y, due by them,
irrespective of the date when it falls due, and, if necessary, they may demand from
the partners with unlimited liability the sums required for the  payment of the
aforesaid liabilities which are not covered by the contribution s so demanded as
aforesaid and paid. The persons conducting the winding up of a Limited Partnership
may furthermore demand from the partners payment of the contrib ution, if any, due
by them or any part of it, irrespective of the date when it fal ls due, for the purpose of
adjusting the rights of the partners among themselves in accord ance with paragraph
31 or otherwise in accordance with the Partnership Deed.
(13) Upon dissolution of a Limited Partnership, notice of the fa ct shall, within a
period of fourteen days from the date of dissolution, be filed by the general partners
or, where applicable, by the limited partner or other person ve sted with the ordinary
administration pursuant to paragraph 28(2), with the Registrar who shall cause a
notice of that fact to be published in the Gazette or on a webs ite maintained by the
Registrar:
Provided that, where the Limited Partnership is dissolved by or der of the
Court, notice of the dissolution shall be given as aforesaid by  the Registrar of
Courts:
Provided further that, in cases of dissolution other than disso lution by order
of the Court, and where there is no general partner and no limi ted partner or other
person vested with the ordinary administration pursuant to para graph 28(2), such
notice may be given by any limited partner and, where a liquida tor has been
appointed (whether by the Court or by the partners) such notice  shall be given by
such liquidator within fourteen days after his appointment.
(14) Where the general partners or the limited partner or other person vested with
the ordinary administration pursuant to paragraph 28(2) or the liquidator fail to give
the notice of dissolution as required by the provisions of sub- paragraph (13), they
shall be liable to a penalty, and for every day during which th e default continues, to
 348        CAP. 386. ]                         COMP ANIES
a further penalty and, in the case of general partners, they sh all continue to incur
liability as if they were the general partners of a Limited Par tnership which had not
been dissolved.
(15) The dissolution of a Limited Partnership shall be deemed to  have occurred
upon the earlier of the following:
(a) the date of the occurrence of the event upon which, under the provisions
of this Schedule, the Limited Partnership is dissolved; or
(b) the date of the order by the Court under paragraph 29(1) for i ts
dissolution.
(16) All expenses properly incurred in the dissolution of a Limi ted Partnership,
including the liquidator’s remuneration, are payable from the a ssets of the Limited
Partnership in priority to all other debts.
(17) The persons conducting the winding up shall, at the request  of any of the
partners, inform them as to the state and progress of the liqui dation.
(18) The persons conducting the winding up of a Limited Partners hip may, by
application, seek the Court’s directions as to any matter in re lation to the winding up,
and upon such application the Court may make such order as it t hinks fit and proper.
(19) The persons conducting the winding up, any partner or credi tor may apply to
the Court to determine any question arising in the course of wi nding up of a Limited
Partnership, or to exercise any power as respects the enforceme nt of calls or any
other matter and the Court, if s atisfied that the determination  of the question or the
required exercise of power will be just and beneficial, may acc ede wholly or
partially to the application on such terms and conditions as it  thinks fit or may make
such other order on the application as it so determines.
(20) Without prejudice to the generality of sub-paragraph (19):
(a) if any person is aggrieved by any act or decision of the perso ns
conducting the winding up, that person may apply to the Court a nd the
Court may confirm, reverse or modify the act or decision compla ined
of, and make such order on the matter as it thinks just;
(b) without prejudice to sub-paragraph (20)( a), if an application is made to
the Court by any creditor or partner complaining on the conduct  of the
persons conducting the winding up, the Court shall inquire into  the
matter and take such action thereon as it may think expedient;
(c) the Registrar may, if he thinks fit, apply to the Court to exa mine the
liquidator or any other person on oath concerning the winding u p;
(d) the Court may at any time after the dissolution of a Limited P artnership,
on the application either of the liquidator or other person con ducting the
winding up or any creditor or partner or the Registrar, and on proof to
the satisfaction of the Court that all proceedings in relation to the
winding up ought to be stayed, make an order staying the procee dings,
for such duration and on such terms and conditions as the Court  thinks
fit: provided that any such stay of proceedings shall not affec t the
continuing validity and operation of the dissolution; and on anapplication as aforesaid the Court may, before making an order,  require
the persons conducting the winding up to furnish to the Court a  report
with respect to any facts or matters which are in its opinion r elevant to
the application;
(e) the Court, on the application either of the liquidator or othe r person
                    COMP ANIES              [CAP. 386.       349
conducting the winding up or any creditor or partner:
(i) may require any partner liable to make any payments or calls  as
referred to in sub-paragraph (12) and any person who holds anymoney, property or accounting records and documents in hishands to which the Limited Partnership is prima facie  entitled, to
pay, deliver, convey, transfer or otherwise hand over such mone y,
property, accounting records or documents to the personsconducting the winding up forthwith or within such time as theCourt directs;
(ii) may summon before it any general partner of the Limited
Partnership or any officer of such general partner or any otherperson known or suspected to have in his possession any propert y
of the Limited Partnership or supposed to be indebted to theLimited Partnership, and any person whom the Court deemscapable of giving information concerning the promotion,formation, trade, dealings, affairs or property of the LimitedPartnership, and the Court may require any such general partner ,
officer or person to produce any accounting records anddocuments in his custody relating to the Limited Partnership; a nd
(iii) on proof of probable cause for believing that any such per son as
aforesaid is about to abscond or to remove or conceal any of hi s
property for the purpose of evading payments due by him or ofavoiding examination respecting the affairs of the LimitedPartnership, may make such orders as it thinks fit to securepayments by such person or the preservation and availability ofinformation relating to the Limited Partnership, including seiz ure
and, or the safekeeping of his accounting records, documents an d
movable property until such time as the Court thinks fit;
(f) the Court may, on the application either of the liquidator or other person
conducting the winding up, fix a time or times within which cre ditors
are to prove their debts or claims or are to be excluded from t he benefit
of any distribution made before those debts are proved, and may  make
such orders regarding the publication of such time or times as it thinks
fit; and
(g) the Court may, with respect to all matters relating to the dis solution and
winding up of a Limited Partnership and in exercising any of it s powers,
have regard to the wishes of the creditors or partners of the L imited
Partnership, as proved to it by any sufficient evidence, and ma y, if it
thinks fit, for the purpose of ascertaining those wishes direct  that
meetings of the creditors or partners be called, held and condu cted in
such manner as the Court considers appropriate and may appoint a
person to act as chairman of any such meeting and to report the  result
thereof to the Court.
A copy of every order made under this sub-paragraph (20)( d) above shall
forthwith be forwarded by the Registrar of Courts to the Regist rar for registration.
(21) Subject to the provisions of paragraph 31 and subject to an y provision of
this Schedule or any other law as to preferential debts or paym ents, the property of a
Limited Partnership shall, on its winding up, be applied in sat isfaction of its
liabilities pari passu . In a winding up of a Limited Partnership, all debts payable o n
a contingency, and all claims against the Limited Partnership, present or future,
certain or contingent, ascertained or which may be due in damag es, shall be
 350        CAP. 386. ]                         COMP ANIES
admissible as proof against the Limited Partnership, a just est imate being made, so
far as possible, of the value of such debts or claims as may be  subject to any
contingency or which are due in damages but not ascertained, or  which for some
other reason do not bear a certain value.
(22) As soon as a Limited Partnership’s affairs are fully wound up, the persons
who conducted the winding up shall:
(a) prepare an account of the winding up, giving details of the co nduct
thereof, and the disposal of the Limited Partnership’s property , and of
their receipts and payments, and shall draw up a scheme of dist ribution
and they shall cause the account to be audited by one or more a uditors
appointed by a decision of the partners or in default by the Co urt; and
(b) provide all partners with a copy of the said account and schem e of
distribution together with the auditors’ report thereon, which shall be
served on such partners by judicial act or by registered mail w ith
confirmation of receipt.
(23) The provisions of article 153 of the Act shall apply to an auditor appointed
in terms of sub-paragraph (22)( a). Such auditor shall not be a person who has held
the office of auditor of the Limited Partnership at any time du ring the last three years
immediately preceding the date of dissolution.
(24) ( a) The persons who conducted the winding up shall, after ensuring  that the
provisions of sub-paragraph (22)( b) have been complied with, deliver to
the Registrar a copy of the said account and scheme of distribu tion and
the auditor’s report thereon: provided that such account and sc heme of
distribution so delivered to the Registrar need not contain the  names of
limited partners, and it shall be sufficient to show the total amounts
distributed to such partners pursuant to the scheme of distribu tion.
(b) The Registrar, on receiving the account and the scheme of dist ribution
together with the auditors’ report, shall forthwith register th em, and on
the expiration of three months from the publication of the noti ce
referred to in article 401(1)(e) of the Act, the Registrar shal l strike the
name of the Limited Partnership off the register, whereupon the  Limited
Partnership’s certificate of registration shall cease to be val id:
Provided that the Court may, on the application filed within th e said period
of three months by the liquidator or by any other person who ap pears to the Court to
have an interest, make an order deferring the date at which the  name of the Limited
Partnership shall be struck off the register for such time and subject to such
conditions as the Court may provide, and any partner or credito r may also, during the
said period of three months, by application to the Court object  to any matter relating
to the winding up as shown in the winding up account, the schem e of distribution
and the auditors’ report, and the Court shall then make such or der as it thinks fit and
proper.
(25) When an order by the Court is made under the proviso to sub -paragraph
(24)(b), the Registrar of Courts shall forthwith forward a copy  of it to the Registrar
for registration and the Registrar shall defer applying the pro visions of sub-
paragraph (24)( b) in accordance with the order given by the Court referred to i n that
sub-paragraph.
(26)*Part III of the Commercial Code relating to bankruptcy shall no t apply to a
Limited Partnership. References in other laws other than Part I II of the Commercial
* This sub-paragraph is not yet in force.
                    COMP ANIES              [CAP. 386.       351
Code to a bankrupt shall, when the context requires, be interpr eted as including
references to a Limited Partnership being wound up in circumsta nces of insolvency
under the provisions of this Schedule, and references to bankru pt shall be construed
accordingly.
Distribution of assets upon dissolution.
31. (1) Upon the dissolution of a Limited Partnership, the asset s shall be
distributed in the following order -
(a) firstly, to creditors other than partners, to the extent other wise permitted
by law, in satisfaction of debts of the Limited Partnership, ac cording to
their priority and ranking as regulated by law;
(b) secondly to limited partners who are creditors and who are not  also
general partners, to the extent otherwise permitted by law, insatisfaction of debts of the Limited Partnership other than deb ts
described in sub-paragraph ( c), according to their priority and ranking
as regulated by law;
(c) finally, subject to the provisions of the Partnership Deed, to  partners as
follows -
(i) firstly, to limited partners for the return of their contrib utions or,
where appropriate, for the release of their obligations to makecontributions;
(ii) secondly, to limited partners for their share of the profit s on their
contribution;
(iii) thirdly, to general partners other than for capital and pr ofits;
(iv) fourthly, to general partners in respect of capital;
(v) finally, to general partners in respect of profits.
Preservation of accounting records and documents after liquidat ion.
32. (1) The accounting records and the documents of the Limited P artnership
shall be kept by the liquidator, if any, or by the person elect ed for that purpose by the
majority of the general partners, and shall be so kept for a pe riod of ten years from
the date at which the name of the Limited Partnership was struc k off the register. The
election of such person shall take place within fourteen days f rom the registration of
the notice referred to in paragraph 30(23) and shall not be eff ected until such person
has signified his acceptance in writing to the general partners  within fourteen days
from his election:
Provided that where there is no liquidator and the general part ners fail to
elect such person or where such person refuses to accept his el ection, the accounting
records and documents shall be delivered to the Registrar withi n fourteen days of the
non-acceptance or failure to elect as the case may be, and the Registrar shall keep
such records for the said period of ten years.
(2) Where a person has been elected to keep the accounting recor ds and the
documents of the Limited Partnership, or where the general part ners have failed to
elect such a person, the general partners shall inform the Regi strar accordingly
within fourteen days of the date when the election becomes effe ctive or from the
failure to elect within the prescri bed period, as the case may be, and in default, the
general partners shall be liable to a penalty.
(3) If the liquidator or the person elected by the general partn ers and who has
accepted to keep the accounting records and documents of the Li mited Partnership
 352        CAP. 386. ]                         COMP ANIES
fails to keep them for the period prescribed by sub-paragraph ( 1), he shall be liable
to a penalty.
(4) If the liquidator or the person elected by the general partn ers to keep the
accounting records and documents of the Limited Partnership die s, his heirs shall be
obliged to deliver the said accounting records and documents to  the Registrar within
six months and the Registrar shall keep them for the remainder of the period
prescribed by sub-paragraph (1), and in default such heirs shal l be liable to a penalty.
Capital of Limited Partnerships and conversion of status.
33. (1) Without prejudice to the foregoing provisions of this Sch edule, the
capital of a Limited Partnership, may be divided into shares or  may not be so
divided.
(2) A Non-Share Capital Limited Partnership may change its statu s to a Share
Capital Limited Partnership, by a decision taken in accordance with the provisions of
the Partnership Deed, or, in the absence of any such provision,  with the consent of
all the partners, both general and limited:
Provided that where one or more limited partners, holding in th e aggregate
not more than one-fourth of the total contributions of the limi ted partners, have not
given their consent the Limited Partnership may nevertheless pr oceed with the
change of its status, but it shall be required, for the purpose  of such change, to
liquidate and reimburse to every such partner who has not given  his consent, if he so
requests, his interest in the Limited Partnership on such terms  as may be agreed, or
as the Court, on a demand of either the Limited Partnership or the limited partner,
may deem fit to order.
(3) A Share Capital Limited Partnership may change its status to  a Non-Share
Capital Limited Partnership, by a decision taken in accordance with the provisions of
the Partnership Deed or, in the absence of any such provision, with the consent of all
the partners, both general and limited:
Provided that where one or more limited partners, holding in th e aggregate
not more than one-tenth of the share capital of the Limited Par tnership, have not
given their consent, the Limited Partnership may nevertheless p roceed with the
change of its status, but it shall be required, for the purpose  of such change, to
redeem the shares held by every such partner in the Limited Par tnership who has not
given his consent, if he so requests, on such terms as may be a greed, or as the Court,
on a demand of either the Limited Partnership or of the limited  partner, may deem fit
to order.
(4) The Limited Partnership which has decided to change its stat us in
accordance with sub-paragraph (2) or sub-paragraph (3) shall de liver to the Registrar
for registration the return of the resultant change in the Part nership Deed in
accordance with the provisions of paragraph 10(2).
(5) The change of status referred to in sub-paragraph (2) or in sub-paragraph (3)
shall not take effect unless and until it is registered as requ ired by sub-paragraph (4).
Application of provisions relating to shares in the Act.
34. (1) Without prejudice to the proviso to article 89 of the Act  (in particular,
but without limitation, the provisions of paragraph ( c) of such proviso), the
provisions of articles 89 to 96 and 99 to 102 of the Act shall apply mutatis mutandis
to a Limited Partnership whose securities are offered to the pu blic, with references to
"public company" therein being construed as a reference to such  a Limited
Partnership and references to "directors" being construed as a reference to general
                    COMP ANIES              [CAP. 386.       353
partners, and with such other adjustments as are necessary to a ccommodate the fact
that these provisions are being applied to a Limited Partnershi p as aforesaid.
(2) The provisions of article 116(1), (2) and (5) and of article  117 of the Act
shall, in so far as they are not inconsistent with the foregoin g provisions of this
Schedule, apply mutatis mutandis  to a Share Capital Limited Partnership, with
references to "company" therein being construed as a reference to such a Limited
Partnership, references to "memorandum or articles" being const rued as a reference
to the Partnership Deed, and references to "resolution passed a t a separate meeting"
being construed as a reference to a decision taken as provided in the Partnership
Deed, and with such other adjustments as are necessary to accom modate the fact that
these provisions are being applied to a Limited Partnership as aforesaid.
(3) The provisions of article 127(1) and (3) to (6) of the Act s hall, in so far as
they are not inconsistent with the foregoing provisions of this  Schedule, apply
mutatis mutandis  to a Limited Partnership, with references to "company" therein
being construed as a reference to the Limited Partnership, refe rences to
"memorandum of association" or "articles of association" being construed as a
reference to the Partnership Deed, and references to "members" being construed as a
reference to partners, and with such other adjustments as are n ecessary to
accommodate the fact that these provisions are being applied to  a Limited
Partnership.
Limited Partnerships with variable share capital.
35. (1) A Partnership Deed of a Share Capital Limited Partnership  within the
meaning of paragraph 2 (1) (a) above may provide for the consti tution of the Limited
Partnership as a Limited Partnership with variable share capita l and the following
provisions of this paragraph shall apply thereto.
(2) In addition to the matters indicated in paragraph 7(3), the Partnership Deed
of a Variable Capital Limited Partnership as well as the Partne rship Registration
Document to be delivered to the Registrar in terms of the said paragraph 7(3) shall
state:
(a) that the share capital of the Limited Partnership shall be equ al to the
value for the time being of the issued share capital of the Lim ited
Partnership;
(b) that such share capital shall be divided into a specified numb er of shares
without assigning any nominal value thereto;
(c) that the actual value of the paid up share capital of the Limi ted
Partnership shall be at all times equal to the value of the ass ets of any
kind of the Limited Partnership after the deduction of its liab ilities,
without prejudice to paragraph 38(4).
(3) Without prejudice to the provisions of paragraph 6, the name  of a Variable
Capital Limited Partnership shall at the end, after the words " Limited Partnership" or
its abbreviation "LP" or "L.P." as required by paragraph 6(1), be followed by the
words "with variable share capital" or by "VC” or "V .C.".
(4) No person carrying on any business in Malta, other than a Va riable Capital
Limited Partnership registered under this Schedule or a partner  therein, shall in any
way or manner describe itself or himself or so hold itself or h imself out or
reasonably be understood to indicate, or use any name which ind icates or may
reasonably be understood to indicate that it or he is, or is ca rrying on business as, a
Variable Capital Limited Partnership registered under this Sche dule or, as the case
may be, a partner therein. Without prejudice to the aforesaid, an undertaking which
 354        CAP. 386. ]                         COMP ANIES
is validly registered under the laws of a country other than Ma lta with a name which
includes "Limited Partnership" or its abbreviation "LP" or "L.P ." followed by the
words "with variable share capital" or by "VC” or "V .C.", or a partner therein, who
lawfully carries on business in Malta, shall not be deemed to b e in breach of this sub-
paragraph (4) simply by reason of the fact that it uses and car ries on such business
under the name by which it is so validly registered in its coun try of registration or, as
the case may be, describes himself as a partner in such underta king with such name.
A person who contravenes the provisions of this sub-paragraph s hall be liable to a
penalty.
(5) A Variable Capital Limited Partnership shall not issue partl y paid up shares.
(6) Without prejudice to the provisions of paragraphs 25 and 35,  a Variable
Capital Limited Partnership may purchase or redeem its own shar es, directly or
indirectly out of the assets of the Limited Partnership, on suc h terms and in such
manner as may be provided by the Partnership Deed.
(7) Shares of a Variable Capital Limited Partnership which have been purchased
or redeemed by such Limited Partnership itself shall be cancell ed and the amount of
the Limited Partnership’s issued share capital shall be reduced  by the amount of the
consideration paid by the Limited Partnership for the purchase of the shares, and
nothing in this Act shall require a Variable Capital Limited Pa rtnership to create any
reserve.
(8) Any reference in any provision of this Act, which and to the  extent that it
applies to a Variable Capital Limited Partnership, to the nomin al value of an issued
or allotted share in, or of the issued or allotted share capita l of, a company shall be
construed, in the case of a Variable Capital Limited Partnershi p, as a reference to the
net asset value.
Multi-Class Limited Partnership.
36. (1) A Share Capital Limited Partnership may be constituted as  a multi-class
partnership where in terms of its Partnership Deed its capital is, or is capable of
being, divided into different classes of shares, not constituti ng any distinct sub-fund.
(2) A Multi-Class Limited Partnership may from time to time crea te and offer or
issue a new class or classes of shares, in accordance with the provisions of the
Partnership Deed, and subject to any approval of the competent authority or any
other requirements or conditions as may be applicable to such L imited Partnership
under or in terms of the Investment Services Act or regulations  issued thereunder or
in terms of Investment Services R ules issued by the competent a uthority under and
within the meaning of the Investment Services Act. Such class o r classes of shares
shall not constitute a distinct sub-fund or sub-funds of the Li mited Partnership.
(3) Each class of shares in a Multi-Class Limited Partnership ma y be
denominated in a different currency provided that a class of sh ares may be
denominated only in one currency.
(4) A Multi-Class Limited Partnership may not elect for the segr egation of any
of its assets and liabilities.
(5) A Multi-Class Limited Partnership having its capital denomin ated in
different currencies shall draw up its annual accounts in any o ne of such currencies.
(6) The provisions of sub-paragraph (5) shall mutatis mutandis  apply to the
drawing up of any other reports or financial statements which m ay be required under
this Act or by the competent authority.
(7) For the purposes of sub-paragraphs (5) and (6), the conversi on from the base
                    COMP ANIES              [CAP. 386.       355
currency of a class of shares into the currency in which the an nual accounts of the
Multi-Class Limited Partnership are to be drawn up shall be in accordance with
generally accepted accounting principles.
Multi-Fund Limited Partnership.
37. (1) A Share Capital Limited Partnership may be constituted as  a multi-fund
partnership where in terms of its Partnership Deed its capital is, or is capable of
being, divided into different classes of shares, where one clas s or a group of classes
of shares constitute a distinct sub-fund of the Limited Partner ship, as may be
provided for in the Partnership Deed:
Provided that the initial capital may or may not be organized i n one or more
sub-funds in terms of this paragraph.
(2) A Multi-Fund Limited Partnership may from time to time creat e and offer or
issue a new class or classes of shares which may constitute a n ew sub-fund or be
comprised in an existing sub-fund or sub-funds of the Limited P artnership, in
accordance with the provisions of the Partnership Deed, and sub ject to any approval
of the competent authority or any other requirements or conditi ons as may be
applicable to such Limited Partnership under or in terms of the  Investment Services
Act or regulations issued thereunder or in terms of Investment Services Rules issued
by the competent authority under and within the meaning of the Investment Services
Act.
(3) A class or classes of shares constituting a sub-fund in a Mu lti-Fund Limited
Partnership may be denominated in a different currency provided  that a class of
shares may be denominated only in one currency.
(4) A Multi-Fund Limited Partnership having its capital denomina ted in
different currencies shall draw up its annual accounts in any o ne of such currencies.
(5) The general partner or general partners of a Multi-Fund Limi ted Partnership
shall maintain proper accounting records of the assets and liab ilities of each sub-
fund in the base currency of any class of shares constituting t hat sub-fund.
(6) The provisions of sub-paragraph (4) shall mutatis mutandis  apply to the
drawing up of any other reports or financial statements which m ay be required under
this Act or by the competent authority.
(7) For the purposes of sub-paragraphs (4) and (6), the conversi on from the base
currency of a class of shares into the currency in which the an nual accounts of the
Multi-Fund Limited Partnership are to be drawn up shall be in a ccordance with
generally accepted accounting principles.
Segregation of assets and liabilities of Multi-Fund Limited Par tnerships.
38. (1) A Multi-Fund Limited Partnership may in its Partnership D eed elect to
have the assets and liabilities of each sub-fund comprised in t hat Limited Partnership
treated for all intents and purposes of law as a patrimony sepa rate from the assets
and liabilities of each other sub-fund of such Limited Partners hip. Where a Multi-
Fund Limited Partnership makes the election aforementioned the assets and
liabilities of each sub-fund of that Multi-Fund Limited Partner ship shall, for all
intents and purposes of law, be deemed to constitute a patrimon y separate from the
assets and liabilities of each other sub-fund of such a Limited  Partnership.
(2) Save for such proportion of the liabilities of a Multi-Fund Limited
Partnership which by virtue of the Partnership Deed or by virtu e of the terms of the
offer or of the issue of the shares constituting a sub-fund are , or are to be attributable
 356        CAP. 386. ]                         COMP ANIES
to, one or more sub-funds in the proportion established therein , the liabilities
incurred in respect of each sub-fund shall be paid out of the a ssets forming part of its
patrimony and the creditors in respect thereof shall have no cl aim or right of action
against the other assets of the Limited Partnership, and the fo llowing rules shall
apply:
(a) proceedings in relation to the Multi-Fund Limited Partnership shall
respect the legal status of each sub-fund as a patrimony separa te from
the assets and liabilities of each other sub-fund of the Limite d
Partnership in terms of this Schedule;
(b) proceedings shall apply mutatis mutandis  to the sub-fund as though it
were a distinct legal entity and with such modifications as are  necessary
to accommodate the fact that the sub-fund is not a Limited Part nership;
and any Proceedings in relation to one sub-fund shall not have any
effect on the assets of any other sub-fund of the Limited Partn ership or
of the Limited Partnership itself; and
(c) where, for the avoidance of doubt, a sub-fund which comprises a
separate patrimony in terms of this Schedule is being wound up,  and
where a liquidator of such sub-fund is appointed, the provision s of
paragraph 30(7) shall apply solely with respect to such sub-fun d; and
accordingly all the powers of the general partners shall cease solely in
respect of that sub-fund.
"Proceedings" in this sub-paragraph refers to any proceedings i n terms of
paragraphs 28 to 32 of this Schedule.
(3) The general partner or general partners of a Multi-Fund Limi ted Partnership
shall hold or cause to be held such separate records, accounts,  statements and other
documents as may be necessary to evidence the liabilities and a ssets of each sub-
fund as distinct and separate from the assets and liabilities o f other sub-funds in the
same Limited Partnership.
(4) When a Variable Capital Limited Partnership is established a s a Multi-Fund
Limited Partnership and elects to have the assets and liabiliti es of its sub-funds
treated as distinct patrimonies, the Partnership Deed as well a s the Partnership
Registration Document to be delivered to the Registrar in terms  of paragraph 7(3)
shall provide that the actual value of any sub-fund shall be at  all times equal to the
value of the assets of any kind of the particular sub-fund afte r the deduction of such
sub-fund’s liabilities, and this in lieu of what is stated in p aragraph 35(2)( c).
Non-applicability of articles 186 and 187(1) of the Act.39. To the extent that they would otherwise (but for the provisi ons of this
paragraph) apply, the provisions of articles 186 and 187(1) of the Act shall not apply
to a Multi-Class Limited Partnership and to a Multi-Fund Limite d Partnership.
Fractional Shares.
40. (1) A Share Capital Limited Partnership may, subject to the p rovisions of
the Partnership Deed, issue fractional shares up to such number  of decimal places as
shall be specified in the Partnership Deed, and under such term s and conditions as
may be stipulated therein.
(2) Fractional shares shall be automatically consolidated into a  whole share of
the same class when the fractional shares held by one partner b ecome equal to a
whole share.
Contributions other than in cash.
                    COMP ANIES              [CAP. 386.       357
41. (1) Without prejudice to paragraph 5(3), the contribution of a partner in a
Limited Partnership may only consist of cash or assets capable of economic
assessment, and such contributions shall be paid or transferred  by the partner to the
Limited Partnership within such time or times as specified in t he Partnership Deed,
and the following provisions of this paragraph shall apply to a ny such contributions
which are non-cash assets contributions.
(2) A report on any contribution other than in cash shall be dra wn up before the
transfer of the contribution to the Limited Partnership and:
(a) in the case of a Share Capital Limited Partnership, if and to the extent
that the non-cash contribution is to be transferred to the Limi ted
Partnership in consideration for the acquisition of shares ther ein on
original subscription, such report shall be drawn up before the  Limited
Partnership is registered; or
(b) in the case of a Share Capital Limited Partnership, if and to the extent
that the non-cash contribution is to be transferred to the Limi ted
Partnership in consideration for the acquisition of shares on asubsequent issue, such report shall be drawn up before the rele vant
shares are issued; or
(c) in the case of a Share Capital Limited Partnership which is no t a
Variable Capital Limited Partnership, if and to the extent that  the non-
cash contribution is to be transferred to the Limited Partnersh ip in
consideration for the payment of any unpaid part on shares alre ady
subscribed at any previous time, such report shall be drawn up before
the transfer of the contribution to the Limited Partnership,
by one or more experts who are independent of the Limited Partn ership and
approved as provided in the Partn ership Deed (who may also be t he auditors of the
Limited Partnership) or, in case of a Limited Partnership withi n the meaning of
paragraph 2(1)(a) above which is licensed by the competent auth ority as a collective
investment scheme in terms of the Investment Services Act, by s uch person as
provided in and in accordance with Investment Services Rules is sued for that
purpose by the competent authority from time to time.
(3) The report referred to in sub-paragraph (2) shall, in the ca se of a Limited
Partnership within the meaning of paragraph 2(1)( a) above which is licensed by the
competent authority as a collective investment scheme in terms of the Investment
Services Act, shall be drawn up in such manner and shall contai n such particulars as
may be required by Investment Services Rules issued for that pu rpose by the
competent authority from time to time
(4) The report referred to in sub-paragraph (2) shall, in the ca se of a Limited
Partnership other than a Limited Partnership referred to in sub -paragraph (3), shall
contain at least a description of each of the assets comprising  the non-cash
contribution as well as the methods of valuation which have bee n used and:
(a) in the case of a Share Capital Limited Partnership other than a Variable
Capital Limited Partnership, shall state whether the values arr ived at by
the application of these methods correspond at least to the num ber and
nominal value, and, where applicable, to the premium on the sha res to
be issued for such assets; or
(b) in the case of a Variable Capital Limited Partnership, shall s tate whether
the values arrived at by the application of these methods at le ast
correspond to the net asset value of the shares to be issued fo r such
assets.
 358        CAP. 386. ]                         COMP ANIES
(5) In both cases referred to in sub-paragraphs (3) and (4), the  value of the
assets comprising the non-cash contribution shall be deemed to be their fair market
value at the time of the transfer thereof to the Limited Partne rship as provided in
paragraph 5(3) and shall be valued accordingly.
(6) In all cases, the report referred to in the foregoing provis ions of this
paragraph or a copy thereof shall be kept amongst the records o f the Limited
Partnership as provided in paragraph 22 and shall be subject to  the provisions of
such paragraph 22.
(7) The provisions of this paragraph shall be without prejudice to the provisions
of paragraph 42.
Issue of shares at a discount.
42. (1) It shall be lawful for a Share Capital Limited Partnershi p to make a
discount to an existing partner who has committed by written ag reement with the
Limited Partnership to subscribe for any shares in the Limited Partnership, which
discount shall be in consideration for such commitment, provide d that:
(a) such discount shall apply exclusively to any outstanding commi tment
arising under the above-mentioned agreement;
(b)  authority therefor is given by the Partnership Deed;
(c) the nature of the discount shall be disclosed in the manner re quired by
sub-paragraph (2);
(d) in the case of a Variable Capital Limited Partnership, in no e vent shall
the value of such shares, issued at a discount, be reduced as a  result of
such discount to below the net asset value at the time the part ner, to
whom the discount is being granted, first subscribed for the sh ares in
terms of the aforementioned agreement; and
(e) in the case of a Share Capital Limited Partnership other than a Variable
Capital Limited Partnership, in no event shall the value of suc h shares,
issued at a discount, be reduced as a result of such discount t o below the
nominal value of such shares.
(2) If shares are issued at a discount which is in excess of tha t permitted by this
paragraph, the holder thereof shall be bound to pay the Limited  Partnership an
amount equal to such excess, with annual interest at the rate o f two percentage points
over the minimum bid rate set by the European Central Bank for the main re-
financing operations of the Eurosystem.
(3) The conditions specified in sub-paragraph (1) shall be clear ly disclosed in
the Partnership Deed, and where the shares of the Limited Partn ership are offered
through a prospectus or other offering document issued by the L imited Partnership,
they shall at least be disclosed in such prospectus or other of fering document.
Pledging of securities of Limited Partnerships.
43. (1) The pledge of shares in a Share Capital Limited Partnersh ip or of other
securities in a Limited Partnership shall be subject to the pro visions of this
paragraph.
(2) Securities may, if the Partnership Deed so provides or if pe rmitted under the
conditions of the offer or the issue of those securities, be pl edged by their holder in
favour of any person as security for an obligation. The pledge of securities shall be
constituted by means of an instrument in writing entered into b etween the pledgor
and the pledgee.
                    COMP ANIES              [CAP. 386.       359
(3) Notice of the pledge shall be delivered by the pledgor or th e pledgee to the
Limited Partnership within fourteen days of the granting of the  pledge. The pledge of
securities shall be recorded in the register of the holders of the respective securities.
(4) The pledge of securities shall be effective in relation to a  third party only
from the date of the recording of the pledge in the register of  the holders of the
respective securities referred to in sub-paragraph (3):
Provided that the Limited Partnership shall, upon a request in writing made
by a third party who may show an interest therein, disclose whe ther a pledge of
securities has been recorded in the register of the holders of the respective securities,
including the name of the pledgor and the pledgee, the amount o f securities pledged
and the date of the recording of the pledge.
(5) Saving the provisions of sub-paragraph (4), during the exist ence of a pledge
of securities, any transfer or other assignment of the pledged securities made by the
pledgor, whether by onerous or gratuitous title, shall be null and void:
Provided that any such transfer or other assignment made with t he consent
of the pledgee shall be valid and the securities to be transfer red or assigned shall
continue to be subject to the pledge.
(6) Without prejudice to the right of the pledgee to apply for t he judicial sale of
the securities and notwithstanding the provisions of the Civil Code or of the
Partnership Deed, in the event of a default under the agreement  of pledge and upon
giving notice by judicial act to the pledgor and the Limited Pa rtnership, the pledgee
shall be entitled to -
(a) dispose of the securities which are pledged in his favour; or
(b) appropriate and acquire the securities himself; or
(c) request the Limited Partnership to purchase or redeem the pled ged
securities in settlement of the debt due to him or of part ther eof:
Provided that the remedy of the pledgee in sub-paragraph 6( c) above shall
only apply if and to the extent that the relevant securities wo uld, in terms of the
Partnership Deed or the conditions of the offer or the issue of  such securities, entitle
the holder thereof to request the repurchase or redemption ther eof by the Limited
Partnership, and such request by the pledgee shall be made in a ccordance with the
procedure, and shall be subject to the same terms and condition s, for such repurchase
or redemption as set out in the Partnership Deed or the conditi ons of the offer or the
issue of the relevant securities:
Provided further that the exercise of any remedies of the pledg ee in sub-
paragraph 6( a) to ( c) shall be subject to any securities holding eligibility criter ia and
minimum holding requirements as may be applicable in respect of  the relevant
securities in terms of the Investment Services Act and Investme nt Services Rules
issued by the competent authority under and within the meaning of the said Act, in
terms of the Partnership Deed and, or in terms of the condition s of the offer or the
issue of such securities.
(7) For the purposes of sub-paragraph (6):
(a) in the case where the relevant pledged securities consist of s hares in a
Variable Capital Limited Partnership, the value of such securit ies shall
be their current net asset value; and
(b) in the case of other pledged securities, the value of such sec urities:
(i) shall be such value specified, or such value arrived at by t he
application of such valuation method specified, in the pledge
 360        CAP. 386. ]                         COMP ANIES
agreement between the pledgor and the pledgee; or
(ii) failing such specification in the pledge agreement as refer red to in
sub-paragraph (7)( b)(i), shall be such value as may be established
by agreement between the pledgor and the pledgee after notice o f
default has been given by the pledgee to the pledgor in terms o f
the sub-paragraph (6); or
(iii) failing such specification in the pledge agreement as refe rred to in
sub-paragraph (7)( b)(i) and failing agreement between the
pledgor and the pledgee as referred to in sub-paragraph (7)( b)(ii),
shall be the fair value of the securities obtaining on the date  of the
notice of default referred to in sub-paragraph (6) determined b y a
certified public accountant or a certified public accountant an d
auditor appointed by agreement between the pledger and thepledgee at the relevant time or, failing such agreement, appoin ted
by the Civil Court, First Hall, on the application of the pledg ee:
Provided that, notwithstanding what is provided above in this s ub-
paragraph, when the pledgee exercises his remedy under sub-para graph 6( c) above
(where applicable), the value of the pledged securities for the  purposes of such
remedy shall be, and the Limited Partnership shall repurchase o r redeem the relevant
securities at, such value which is specified or otherwise calcu lated in terms of the
Partnership Deed or the conditions of the offer or the issue of  such securities.
(8) Where the Partnership Deed or the conditions of the offer or  the issue of the
pledged securities requires any holder thereof wishing to trans fer such securities to
offer them on a pre-emptive basis to other holders of such secu rities, the pledgee
shall be obliged, prior to the exercise of the rights granted b y this sub-paragraph (6),
to offer any such securities to those other holders at the pric e determined in
accordance with sub-paragraph (7), which offer shall be kept op en for at least ten
working days.
(9) In the exercise of his rights under this paragraph, the pled gee shall only
dispose of, appropriate or request the repurchase or redemption  of such number of
securities as are needed to raise sufficient proceeds to repay the debt due. All
remaining securities shall be released to the pledgor.
(10) It shall be lawful for the parties to an agreement of pledg e of securities to
agree on the person or persons who shall exercise all the right s belonging to the
holder of securities, including voting rights and the right to receive income,
dividends, profits, interest or any other payments due on such securities:
Provided that, should the agreement between the parties not mak e provision
for such matters, all rights belonging to a holder of securitie s shall, for the duration
of the pledge, be exercised by the pledgor until such time as h e defaults under the
agreement of pledge or until the pledgee enforces his security;  and in any such case,
upon giving notice by a judicial act to the pledgor and the Lim ited Partnership, all
the rights belonging to the pledgor shall immediately become ex ercisable by the
pledgee:
Provided further that, unless the pledgor and the pledgee have otherwise
agreed in the pledge agreement and notice thereof has been give n to the Limited
Partnership, income, dividends, profits, interests or any other  payments due on
securities which are pledged shall, during such time as the ple dge is registered in the
register of the holders of the respective securities, be paid b y the Limited Partnership
to the pledgee who shall appropriate any such amounts received to the interest due
on the debt secured by the pledge, and, if there is an excess, to the capital.
                    COMP ANIES              [CAP. 386.       361
(11) Notice of termination of the pledge shall be delivered by t he pledgee to the
Limited Partnership within fourteen days of the termination of the pledge. The
termination of the pledge shall be recorded in the register of the holders of the
respective securities.
(12) ( a) In the case of a pledge of securities in a Limited Partnership  which
securities are listed and traded on a Maltese regulated market and in
respect of which arrangements have been made for the maintenanc e by
such regulated market of the relevant register of the holders t hereof, the
provisions of sub-paragraphs (3) to (8) and (11) shall not appl y to such
listed and traded securities. The following provisions shall ap ply
instead:
(i) the pledgor or the pledgee shall deliver within fourteen day s of
the granting of the pledge of a listed and traded security a no tice
of the pledge to the Maltese regulated market, which shall also  be
served with a notice of termination of the pledge by the pledge e
within fourteen days of the termination of the pledge;
(ii) the Limited Partnership whose listed and traded securities have
been pledged shall also be notified of the pledge and of itstermination within the said periods and the Limited Partnershipshall record that fact in the register of the holders of therespective securities;
(iii) such pledge of securities shall be effective in relation t o a third
party only from the date of delivery of the notice of the pledg e to
the Maltese regulated market and any transfer or other assignme nt
made therefrom by the pledgor, whether by onerous or gratuitoustitle, of the pledged securities shall be null and void; and
(iv) the pledgee shall, in the event of a default under the agre ement of
pledge and upon giving notice by judicial act to the pledgor, t he
Maltese regulated market and the Limited Partnership, have thesecurities sold through a person duly licensed under theInvestment Services Act.
(b) In the case of a pledge of securities in a Limited Partnership  which are
listed and traded on a regulated market other than a Maltese re gulated
market, or on an equivalent market in a non-Member State or non -EEA
State, the provisions of sub-paragraphs (3) to (8) and (11) sha ll not
apply and in the event of a default under the agreement of pled ge, the
pledgee shall, upon notice in writing to the pledgor and the Li mited
Partnership have the securities sold through a person duly auth orised for
this purpose.
(c) References in this paragraph to the maintenance by a regulated  market
of the register of the holders of the respective securities sha ll be deemed
to include a reference to the maintenance of the said register by a duly
authorised central securities depositary and the delivery of th e notices
referred to in this paragraph shall be construed accordingly.
Matters subject to Partnership Deed.
44. (1) Without prejudice to the provisions of this Schedule, mat ters relating to
the issue and repurchase or redemption of shares by a Share Cap ital Limited
Partnership, the manner and timing and other matters relating t o payment of
contributions (including payment on shares in a Share Capital L imited Partnership)
by partners in a Limited Partnership, the manner and timing and  other matters
 362        CAP. 386. ]                         COMP ANIES
relating to payments (whether of profits, return of contributio ns or otherwise) to
partners by a Limited Partnership, matters relating to meetings  and decisions of
partners or any of them, and in general any matters relating to  the Limited
Partnership, shall be regulated by and shall be made in accorda nce with and subject
to the terms and conditions of the Partnership Deed.
(2) Without prejudice to the generality of sub-paragraph (1) and  without
prejudice to the provisions of paragraphs 25 and 35, a Share Ca pital Limited
Partnership may, if and to the extent permitted by the Partners hip Deed, purchase or
redeem its own shares, directly or indirectly out of the assets  of the Limited
Partnership, on such terms and in such manner as may be provide d by the
Partnership Deed.
Investment Services Rules.45. Without prejudice to the provisions of article 66A(3) of the  Act, the
competent authority may issue Investment Services Rules in term s of article 6(2)( b)
of the Investment Services Act for the better carrying out of t he provisions of this
Schedule.
Administrative penalties in respect of Limited Partnerships.
46. (1) Where any provision of this Schedule provides for the imp osition of a
penalty, the amount of such penalty shall be determined by refe rence to Part II of this
Schedule, which specifies the maximum penalty that may be impos ed by the
Registrar under any of the provisions of this Schedule.
(2) In Part II of this Schedule, the first column indicates the paragraph and sub-
paragraph of this Schedule which prescribes that a penalty shal l be imposed, the
second column gives a general description of the infringement, which description
shall not be relied on in interpreting any provision of this Sc hedule, the third column
prescribes the maximum penalty and the fourth column prescribes  the maximum
daily default penalty, if any. The penalty shall become due on the day on which the
default occurs and the daily default penalty shall be due for e very day during which
the default continues and shall accrue from the day following t hat on which the
default occurs.
(3) Action by the Registrar for the recovery of a penalty under this Schedule
shall be prescribed by the lapse of five years from the day on which the default
occurs.
(4) In relation to penalties raised under this Schedule, the pro visions of article
401 of this Act shall apply mutatis mutandis .
PART II - PENALTIES
Paragraph Default PenaltyDaily 
Penalty
6(6) Person other than a Li mited Partnership or a partner
therein falsely indicating existence of LimitedPartnership €500 None
6(7) Person using name falsely indicating existence of Limited
Partnership €500 None
10(6) Failure of any general partner, vested with administration
and representation, to deliver to the Registrar forregistration the return of changes in the Partnership Deed,within fourteen days from the change €500 €25
                    COMP ANIES              [CAP. 386.       363
 18(3) & 
(4)Failure of Limited Partnership and any general partner, or
failure by person who ceased to be a general partner, asapplicable, to notify the Registrar of the cessation of aperson as a general partner, within fourteen days asmentioned in paragraph 18(3) or paragraph 18(4), asapplicable €500 €25
22(7) Failure by Limited Partnership and any general partner to
keep any of the accounting records mentioned for aperiod of ten years from the date when they were made €1,200 None
22(10) Failure by the Limited Partnership or any general partner
to maintain the documents mentioned and as provided,make them available for inspection, and failure in respectof documents which are to be sent and kept in Malta €500 €25
39(5) Failure by liquidator to notify the Registrar of his
appointment, within fourteen days of such appointment €500 €25
30(7) Exercise by any person of the powers pertaining to the
general partners or any power of administration orrepresentation of the Limited Partnership after theappointment of the liquidator €1,200 None
30(9) Exercise by any person of the business of the Lim ited
Partnership following its dissolution €1,200 None
30(14) Failure of the general partners, or the limited partner o r
other person vested with the ordinary administration orthe liquidator to give notice of dissolution as required byparagraph 30(13) €500 €25
32(2) Failure of general partners to inform Registrar of electio n
of a person for custody of records/documents afterliquidation, within fourteen days of such election, or offailure to elect such a person, within fourteen days fromthe failure to elect within the prescribed period forelection €500 None
32(3) F ailure of liquidator or elected person to keep records/
documents of the Limited Partnership for prescribedperiod €1,200 None
32(4) Failure of heirs of liquidato r or elected person to delive r
records/documents of the Limited Partnership within 6months after death of liquidator or elected person €500 None
35(4) Person other than a Variable Capital Limited Partnership
or a partner therein falsely indicating existence of
Variable Capital Limited Partnership €500 NoneParagraph Default PenaltyDaily 
Penalty
 364        CAP. 386. ]                         COMP ANIES
PENALTIESAmended by:
IV . 2003.170, 172.Substituted by:L.N. 425 of 2007.
Amended by:
IX. 2008.45;XXII. 2014.23;V .2020.39.ELEVENTH SCHEDULE
(Article 427)
Article Default PenaltyDaily 
Penalty
6(8) Failure to ind icate particulars concerning commercial
partnership on business letters, etc.; and officer ofcommercial partnership failing to state capacity inwhich he signs a document on behalf of thecommercial partnership €465.87 None
6(9) Liquidator failing to include s tatement on business
letters, etc., that commercial partnership is beingwound up or failing to include names of liquidators ofcompany being wound up €465.87 None
7A(4) F ailure of partner of partnership en nom collectif to
comply with article 7A(2) and (3) €465.87 €23.29
10 Any person including name of a non-partner or
fictitious person in partnership-name €2,329.37 None
 19(4) Partners failing to give notice that a person has begun
or ceased to be a partner of a partnership €465.87 €23.29
26(2) Partners fa iling to keep accounting records for ten
years €1,164.69 None
41 Failure of partners to give notice of dissolution of
partnership or failure of liquidator to give notice of hisappointment €465.87 €23.29
50(2) Failure of partners to provide for custody of records/
documents after liquidation €465.87 None
50(3) Failure of liquidator or elected person to keep records/
documents of partnership for prescribed period €1,164.69 None
50(5) Failure of heirs of elected person to deliver records/
documents of partnership €465.87 None
51A(4) Failure of partner of partnership en nom commandite or
limited partnership to comply with article 51A(2) and(3) €465.87 €23.29
66(6) F ailure of partner vested with administration or
representation to deliver a copy of any instrumentaltering or adding to the deed of partnership of apartnership en commandite or limited partnership
the capital of which is divided into shares to theRegistrar or failure to deliver amended deed ofpartnership €465.87 €23.29
                    COMP ANIES              [CAP. 386.       365
70(6) Trading or carrying on business under certain
prohibited names €465.87 €23.29
74(2) Failure of company to deliver to Registrar report of
proposed acquisition of non-cash asset fromsubscriber or member €1,164.69 None
79(4) F ailure of officer to deliver a copy of any resolution
altering or adding to a company’s memorandum orarticles to the Registrar or failure to deliver amendedmemorandum and articles €465.87 €23.29
85(4) Failure of off icer to file copy of resolution increasing
share capital €465.87 €23.29
88(11) Failure of officer of company to deliver to the Registrar
copy of resolution to restrict or withdraw right of pre-emption €465.87 €23.29
91 Contravention of articles 89 or 90(1) in respect of the
obligation to issue a prospectus €2,329.37 None
92(2) Issue of prospectus in contravention of article 92(1) €2,329.37 None
93(2) Issue of a prospectus before registration thereof €2,329.37 € 46.59
96A(2) Failure of officers to provide Registrar with notice
that the company issued an offer of securities to thepublic in a third country €500 €25
97(5) Failure of company and its officers to keep in a
separate account money received from applicants inpursuance of a prospectus €2,329.37 € 46.59
101(5) Failure of company and its officers to keep in a
separate account money received from applicants inpursuance of a prospectus for listing €2,329.37 € 46.59
103(2) Failure to make return as to allotments €465.87 €23.29
104(3) Failure of directors to convene general meeting in case
of serious loss of capital €465.87 €23.29
106(2) F ailure of officers of company to provide Registrar
with copy of resolution for company to acquire its own
shares otherwise than by subscription €465.87 €23.29
113(4) Failure of officer to disclose commissions, discounts,
etc, on issue of shares €465.87 €23.29
115(6) Failure of officers to p rovide Registrar with notice of
redemption of preference shares €465.87 €23.29
119(6) F ailure of company to send notice to transferee of
refusal to register transfer of shares and debentures €465.87 €23.29
120(4) F ailure of officers of company to comply with
provisions as to issue of share certificates €465.87 €23.29
123(4) F ailure of officers of company to comply with
provisions as to register of members €465.87 €23.29
124(4) Failure of officers of company to keep proper register
of debentures €465.87 €23.29Article Default PenaltyDaily 
Penalty
 366        CAP. 386. ]                         COMP ANIES
128(3) Failure of officers of company to hold annual general
meeting €2,329.37 € 46.59
133(3) Failure of officers of company to give notice to
members of right to vote by proxy at a meeting of thecompany €465.87 None
133(5) Officer of company contravening further provisions as
to votes by proxy at meetings of the company €465.87 None
138(8) Failure to appoint a company secretary €465.87 €23.29
145(2) Director failing to disclose interest in contract €2,329.37 None
146(2) Officers of company failing to make return as to
change in directors or secretary €465.87 €23.29
149(4) Officers of company failing to make minutes of general
meetings and to keep minute book at registered office €1,164.69 None
151(6) Officers of company failing to give notice to Registrar
of default in appointment of auditors €465.87 €23.29
154(3) Officer and auditors of subsidiary undertaking failing
to give information to auditors of parent company €465.87 None
154(4) Officers of parent company failing to provide auditors
with information concerning oversea subsidiary €465.87 None
157(2) Officers of company failing to give notice to Registrar
of resolution removing an auditor €465.87 €23.29
159(3) Officers of company f ailing to give notice to
Registrar or failing to give statement to
Accountancy Board of resignation of an auditor €2,329.37 € 46.59
160(5) Directors failing to take reasonable steps to convene a
meeting requisitioned by a resigning auditor €2,329.37 None
162(1) Auditor failing to comply with requirements of article
161 upon ceasing to hold office €1,164.69 € 34.94
162(3) Officers of company failing to comply with article 161
upon an auditor’s ceasing to hold office €1,164.69 € 34.94
163(7) Officers failing to keep accounting records for ten
years €1,164.69 None
176(4) Directors approving defective accounts €2,329.37 None
176(5) Officers of company issuing or delivering to Registrar
accounts not duly signed €465.87 None
177(4) Directors failing to comply with requirements as to
Directors’ report €1,164.69 None
178(4) Officer circulating or filing unsigned directors’ report € 1,164.69 None
179(7) Officers of company failing to state names of auditors
on auditors’ report €465.87 None
180(4) Company and its officers failing to send copies of
annual accounts to persons entitled €1,164.69 None
180(6) Officers of company fa iling to provide document on
demand by person entitled to it €465.87 €23.29Article Default PenaltyDaily 
Penalty
                    COMP ANIES              [CAP. 386.       367
181(3) Dir ectors failing to lay annual accounts or laying
defective annual accounts before general meeting €2,329.37 € 46.59
183(10) Dir ectors failing to deliver or delivering defective
annual accounts, etc., to Registrar €2,329.37 € 46.59
184(3) Officers of company failing to file annual return €2,329.37 € 46.59
209(3) Officers of private company offering shares or
debentures for sale to the public €2,329.37 None
212(6) Officers of company failing to deliver notice to
Registrar of becoming a single member company €465.87 €23.29
212(9) Sole member failing to record in writing all agreements
between him and the company €1,164.69 None
226(6) Persons i nfringing article 226 on preparation of
statement to official re ceiver as to affairs of company
in liquidation €2,329.37 € 46.59
265(2) Officers of company failing to give to Registrar notice
of resolution for dissolution and voluntary winding up €465.87 €23.29
270(4) Directors failing to summon general meeting or failing
to apply to the court for appointment of liquidator €2,329.37 € 46.59
272(2) Liquidator failing to summon meeting of creditors
where company unable to pay debts €2,329.37 None
273(2) Liquidator failing to hold general meeting where
winding up continues for more than twelve months €1,164.69 None
274(2) Liquidator failing to provide Registrar with copy of the
winding up account or a return of the general meetingon members’ voluntary winding up €465.87 €23.29
274(3) Liquidator failing to call final meeting in members’
voluntary winding up €465.87 None
278(6) Directors failing to comply with requirements as to
creditors meeting following resolution for dissolutionand voluntary winding up €2,329.37 None
279(3) Failure of directors to apply to the court to appoint
liquidator €2,329.37 € 46.59
283(2) Liquidator failing to convene meetings of company and
of creditors where winding up continues for more thantwelve months €465.87 None
284(2) Liquidator failing to provide Registrar with copy of
winding up account or a return of the company andcreditors’ meetings on a creditors’ voluntary windingup €465.87 €23.29
284(3) Liquidator failing to call general meeting or creditors’
meeting on creditors’ voluntary winding up €1,164.69 None
290(2) Liquidator failing to notify Registrar of appointment €465.87 €23.29
322(2) Liquidator f ailing to comply with periodic reporting
requirements €1,164.69 € 34.94
324(3) Liquidator failing to keep books for specified period €1,164.69 NoneArticle Default PenaltyDaily 
Penalty
 368        CAP. 386. ]                         COMP ANIES
327(4) Officer failing to annex to memorandum copy of court
order as to compromise with creditors €465.87 €23.29
328(6) Company and officers failing to comply with the
requirements of article 328 €2,329.37 None
328(7) Director failing to give notice to company and
debenture holders of interests in relation tocompromise with creditors €2,329.37 None
329(5) Failure to d eliver copy of court order for the
sanctioning of a compromise or arrangement to theRegistrar €465.87 €23.29
389 Officer or agent of oversea company failing to comply
with provisions as to registration or returns of overseacompany €465.87 €23.29
397(1) Person responsible for issuing, circulating or
distributing a prospectus, etc., for an oversea companyin contravention of articles 391 to 396 €2,329.37 None
399A(1) Liquidator, officer or agent of oversea company
failing to give notice to Registrar of winding-up ofoversea company or closure of branch or place ofbusiness €465.87 €23.29
399A(2) Liquidator of oversea company failing to notify
Registrar of appointment €465.87 €23.29Article Default PenaltyDaily 
Penalty
                    COMP ANIES              [CAP. 386.       369
TABLE OF CONCORDANCE
1. Short title. 1
2. Interpretation. 2 to the extent
                                                     that the 
                                                     definitions are
                                                     contained therein
3. Law governing commercial partnerships. 54. Formation of partnership. 45. Different kinds of partnerships. 4 (1) 6. Indication of particulars concerning
partnerships in business letters, etc. 6 
7. Definition. 7 8. Agreement to pay share of profits. 89. Partnership-name. 9, 18 10. Penalties for use of partnership-name
including name of fictitious person, etc. 10 
11. Contributions deemed to be made in ownership. 11 12. Contribution of a debt owing to a partner. 12 13. Valuation of contribution. 14 ( e) 
14. How partnership is constituted. 13 15. Contents of deed of partnership. 14 16. Registration of deeds of partnership. 1517. Duty of Registrar and effect of registration. 16 18. Where certificate of registration is not issued. 17 19. Changes in deed of partnership. 19 20. Where alteration consists in change of
partnership-name. 20 
21. Reductions in contribution of a partner and
dissolution of a partnership beforeperiod fixed for its duration. 21 TWELFTH SCHEDULE
Amended by:
IV . 2003.169.(Article 3)
Articles of 
OrdinanceMarginal note for the article in the Ordinance Articles of Act
 370        CAP. 386. ]                         COMP ANIES
22. Right of creditors of a partner to oppose
enlargement of duration of a partnership. 22 
23. Duties of Registrar of Courts. 23 24. How deed of partnership may be altered. 24 25. Administration and representation of a
partnership. 25 (1)
26. How partnership may be bound. 25 (2), (3) 27. New partners. 2728. Distribution of profits. 28 29. How rights of creditors of a partner are
enforceable. 29 
30. A partner may not compete with partnership. 30 31. Death of a partner. 31 32. Expulsion of a partner. 32 33. Cessation of membership. 33 34. Rights of persons ceasing to be partners. 3435. Dissolution of partnerships en nom collectif . 35 
36. Notice of dissolution. 36 37. How a partnership en nom collectif may be
wound up. 37 
38. Power to remove liquidator. 38 39. Remuneration of liquidator. 39 40. Costs of winding up payable in priority to
other claims. 40 
41. Penalty. 41 42. Powers until provision is made for winding up. 42 43. Duties of partners vested with administration. 43 44. Powers of liquidators. 44 45.  Liquidator not to distribute assets before 
paying debts. 45 
46. Duty of liquidator to give information, to 
render account and prepare scheme of distribution. 46 
47. Rules applicable to distribution of assets. 47 48. Approval of accounts and scheme of distribution. 48 49. Striking of name of partnership off register. 49 50. Preservation of books of accounts, etc., after
dissolution. 50 
51. Definition. 51 52. Applicability of provisions governing
partnerships en nom collectif.  5 2
53. Partnership-name. 53 
                    COMP ANIES              [CAP. 386.       371
54. Contribution of limited partner not to include
personal services. 54 
55. Contents of deed of partnership. 55 56. Rights of general partners. 56 57. Administration and representation. 57 58. Appointment of partners to administer and
represent partnership. 58 
59. Limited partner cannot take part in 
management of partnerships. 59 
60. Communication of yearly accounts to limited
partners. 60 
61. Article 30 not to apply to limited partners. 61 62. Limited partner not bound to restore profits
received in good faith. 62 
63. Assignment of interest by limited partner. 63 64. Death of limited partner. 64 65. Dissolution of partnership en commandite . 65 
66.  Division of capital into shares. 66 67. Definition. 67 68. How company is constituted. 68 69. Contents of memorandum. 69 70. Name of company. 70 71. Objects of company. 7172. Minimum share capital. 72 73. Articles of association. 75 74. Registration of memorandum and articles. 76 75. Duty of Registrar and effects of registration. 77 76. Where certificate of registration is not issued. 78 77. Alterations and additions to memorandum 
and articles. 79 
78. Reduction of share capital. 83 79. Change of name of company. 80 80. Alterations in memorandum or articles
increasing liability to contribute to share capital not to bind existing members without consent. 81 
81. Authentication of documents. 8282. Issue of applications for shares in or 
debentures of a company to be made witha prospectus. 89 
83. Dating of prospectus and matters to be stated
therein. 90 
84. Penalty. 91 
 372        CAP. 386. ]                         COMP ANIES
85. Prospectus including a statement by experts. 92 
86. Registration of prospectus. 93 87. Restriction on alteration of terms mentioned in
prospectus. - 
88. Civil liability for mis-statements in prospectus. 94 89. Document containing offer of shares or 
debentures for sale to be deemed prospectus. 95
90. Interpretation of provisions relating to prospectus. 96 91. No allotment of share capital unless seventy-five
per cent subscribed. 97 
92. No allotment after lapse of three months from
issue of prospectus. - 
93. Time of the opening of the subscription lists. 99 94. Revocability of applications for shares or
debentures. 100 
95. Return as to allotments. 10396. Company may not hold its own shares. 105, 106, 107,
108, 109,112 
97. Company may not hold shares in its holding
company nor provide financial assistance for purchase of or subscription for its own, or itsholding company’s shares. 110
98. Conditions for payment of commissions,
discounts, etc. 113 
99. Application of premium received on issue of
shares. 114 
100. Redeemable preference shares. 115 101. Rights of holders of special classes of shares
and variations thereof. 116 
102. Numbering of shares. 117 103. Transfer of shares. 118 104. Registration of transfer at request of transferor. 119 105. Issue of certificates. 120106. Share warrants. 121 107. Register of members. 123 108. Register of debentures. 124 109. Inspection of registers. 125 110. Power to close registers. 126 111. Statutory meeting. - 112. Holding of annual general meeting.  128 113. Penalty. 128(3) 114. Convening of extraordinary general meeting
on requisition. 129 
                    COMP ANIES              [CAP. 386.       373
115. Length of notice for calling meetings. 130 
116. General provisions as to meetings and votes. 131 117. Power of court to order meeting. 132 (1) 118. Proxies. 133 119. Right to demand a poll. 134 120. Extraordinary resolutions. 135 121. Directors. 137 122. Restrictions on appointment of director. 139123. Removal of directors. 140 (1) to (5) 124. Casual vacancy. 140 (6)125. Disqualification for appointment as director. 142 126. Director may not compete with company. 143127. Prohibition of loans, etc., to directors. 144 128. Duty of director to disclose interest in a
contract with company. 145 
129. Return as to changes among directors. 146 130. Joint and several liability of directors. 147 131. Provisions as to liability of officers and auditors. 148 132. Minutes of proceedings. 149 133. Keeping of books of account. 163134. Profit and loss account and balance sheet. 181, 182 135. General provisions as to contents and
form of accounts. 167 
136. Signing of balance sheet. 176137. Directors’ report to be attached to balance sheet. 177, 18 1
138. Inspection of accounts. 180139. Penalty. Incorporated in
relevant articles 
140. Appointment and remuneration of auditors. 151, 152, 156 141. Disqualification for appointment as auditor. 153
142. Auditor’s report. 179,181
143. Right of access to books and to attend
at general meetings. 154, 155 
144. Annual return. 184145. Documents to be annexed to annual return. 183146. Penalty. Incorporated in 
relevant articles 
147. Definition. 209148. Provisions not applicable to private companies. Incorporat ed in 
relevant articles 
 374        CAP. 386. ]                         COMP ANIES
149. Exemption of private company from
requirements of article 145, etc. 211 
150. Dissolution of companies. 214 151. Notice of dissolution and calling of meeting for
appointment of liquidator. 265, 279 
152. Appointment, removal and remuneration
of liquidator. 270, 278, 279, 
281, 289, 293 
153. Notice of appointment of liquidator. 290154. Penalty. Incorporated in 
relevant articles 
155. Powers of directors and convening of
general meetings. 267, 295 
156. Applicability of articles 43, 44 and sub-article
(1) of article 45. 287, 288 
157. Calls for payment of unpaid share capital. 288158. Duties of liquidator where winding up continues
for more than one year. 273, 283 
159. Duties of liquidator when affairs have been
completely wound up. 274, 284 
160. Approval of accounts and scheme of
distribution. 275, 285
161. Name of company to be struck off the register. 275, 285, 3 24
162. Conversion of partnerships. 330163. Amalgamation of partnerships. 337, 343, 357 164. Registration of the conversion or amalgamation
of partnerships. 331, 338, 350 
165. Where partnership ceases to exist on
conversion or amalgamation. 332, 339, 343 (4) 
166. Partners with unlimited liability to remain
bound unless creditors consent to conversion. 333, 340 
167. Rights of creditors to oppose conversion
or amalgamation. 334, 341, 351 
168. Continuing or new partnership succeeds
partnership ceasing to exist. 335, 342, 354 (1) 
169. Definition. 376170. Consent of associates required for admission
of other associates. 377 
171. Relations of parties vis-à-vis third parties
and among themselves. 378 
172. Only associating party acquires rights and
assumes obligations. 379 
173. Rights of associating party and of associates. 380 174. Liability of associate. 381 175. Agreements allowed between parties. 382 
                    COMP ANIES              [CAP. 386.       375
176. No formalities required for association
en participation . 383 
177. Application of articles 178 to 182. 384178. Documents, etc., to be delivered by oversea
companies carrying on business in Malta. 385 
179. Return to be delivered by oversea company
where documents, etc., altered. 386 
180. Accounts of oversea company. 387 181. Other obligations of oversea company. 388 182. Penalties. 389 183. Application of articles 184 to 187. 384 184. Documents, etc., to be delivered by oversea
partnerships carrying on business in Malta. 385 
185. Return to be delivered by oversea partnerships
where documents, etc., altered. 386 
186. Other obligations of oversea partnerships. 388 187. Penalties. 389 188. Dating of prospectus and particulars to be
contained therein. 391
189. Application of articles 85, 86 and 88. 393, 396, 397 190. Interpretation of provisions as to prospectuses. 398191. Power of Prime Minister to appoint Registrar. 400 192. Additional duties of Registrar. 401 193. Powers of Registrar to investigate affairs of
partnership. 403 to 423 
194. Inspection, etc., of documents kept by Registrar. 424195. Power of Minister to make regulations 425
First Schedule Regulations for management of a limited
liability company First Schedule
Second Schedule Matters to be set out in a prospectus and 
reports to be set out therein Second Schedule
Third Schedule General provisions as to balance sheet and
profit and loss account 168, Third Schedule
Fourth Schedule Contents and form of annual return Seventh Sche dule
1 Short title -
2 Other enactments -Articles of 
Commercial Partnerships (Special Provisions) 
Act, 1994Marginal note for the article in the Commercial 
Partnerships (Special Provisions) Act, 1994Articles of Act
 376        CAP. 386. ]                         COMP ANIES
3 Interpretation 2 
4 Investment Companies with variable
share capital 84
5 Name of company 70 (3) and (6) 6 Accounts of investment company with
variable share capital 169 
7 Trustees and nominees 1278 Share Capital in a convertible currency 186, 187 9 Power to make regulations -
Schedule - Accounts and Director’s report
of an investment company withvariable share capital Fifth Schedule