The Private Limited Liability company is the most adopted type of business vehicle in Malta. The main reason is the legal protection it gives but also the minimum requirements for setting up this type of company. A private company must restrict the rights to transfer its shares, limited the number of members to fifty and prohibit invitation to the public to subscribe to any shares or debentures of the company.
A public Limited Liability Company is a company which may offer shares or debentures to the public and be listed on the Malta stock exchange. The other noticeable difference from a private company is the amount of shareholders and minimum issued share capital.
Requirements
Registered Office
Every company registered in Malta must provide a registered and physical office. This may be at your own business premises, a managed office space, the office of a firm of lawyers or accountants.
Capital requirements
The minimum authorised share capital is EUR 1,165. This share capital must be subscribed by at least two persons and must be fully deposited into the business account. If the minimum share capital exceeds the threshold, at least 20% of the amount must be deposited upfront. A Public Limited Liability Company must have a minimum authorised share capital of EUR 46,587. If the authorised share capital exceeds the minimum, at least 25% must be paid upon signing the Memorandum. If it is equal to the minimum requirements it must be paid in full. The share capital may be divided into ordinary shares, preference shared and classes or variants thereof. However, bearer shares are not allowed. The ownership of these shares are evidenced by their entry in the company’s registrar of members, in the memorandum and articles of association and the issuance of a share certificate.
Shareholding
The maximum of shareholders allowed in a private limited liability company is 50. Normally, the minimum number of shareholders are two; however, a “single member company” may also be registered under the Companies’ Act. This deviation qualifies as an exempt company which would be incorporated with one member or whose membership is reduced after the incorporation. The Memorandum of Association should also reflect this ownership structure. Public Limited Liability Companies have at least 2 shareholders.
Directors and Company Secretary
The company is required to have at least one director and a company secretary. No company can have its secretary as sole director except in case of a “single-member company” as described above. Public Companies must have at least 2 directors. The director(s) must ensure by law that they have taken reasonable steps to assure that the company secretary has requisite knowledge and experience to function in such position. The company secretary does not need to be a resident in Malta.
Memorandum of Association
Before a company formation can take place, a Memorandum of Association must be drafted and duly signed in original by the shareholders. Alternatively, upon presentation of powers of attorney/resolution, an authorised representative can also sign off the documents on behalf of the shareholders. It is advised to consult with an accountant or lawyer when this document is drafted. In addition, many companies also submit the Articles of Association which describes how the company will be governed.
Opening of Bank Account
Prior to incorporating the company, a bank account in the name of the company must be set up. The bank will require the Memorandum and Articles of Association together with ID documents/Residence Permits. The bank will usually hold the share capital during the formation.
Evidence of Paid Share Capital
Documentary evidence that the paid-up share capital has been deposited to an account in the company’s name is required upon incorporation. The bank will provide this upon opening of the company bank account.
Other Documents
Furthermore, the following documents must be presented to the registry of companies upon incorporation of the company:
- Identity documents in form of ID-card/Residence Permit or passport;
- For non-EEA residents, a satisfactory bank or character reference; and
- A cheque for the registration fees (including any additional certified copies if needed).
All documents submitted in copy must be certified true copies by a notary or lawyer. Copies endorsed by an accountant or auditors may also be accepted.
