Business corporate entities in Malta are incorporated and regulated by the Companies Act 1995 with the most common business entity being the limited liability company. A company has separate legal personality from the shareholders and it is unlimitedly liable for its obligations. A limited liability company’s capital is divided into shares which are in turn subscribed to by the company’s shareholders. The company provides its shareholders with the benefit of limiting their liability to the amount, if any, still unpaid on the shares that they hold.

A private company is a company in which the transfer of its shares is restricted and the number of its shareholders is limited to fifty. A company’s name must have the suffix Limited or Ltd., while the authorised and issued share capital of the company is normally not lower than €1,200 which must be at least 20% paid up. As a general rule each company must have at least two shareholders, however there is an exception to this rule and subject to certain conditions, companies may also be registered as single member companies – such a company is usually only feasible for very small operations.

A company’s Memorandum and Articles of Association must contain the following information:

• The name of the Company
• Whether it is a public or private limited liability company
• The Registered Office (which must be situated in Malta)
• The Objects of the Companyo   Details of the issued and authorised share capital of the Company
• The name and residence of the shareholders of the Company
• The number of the directors together with the name and residence of the first directors of the Company (if the directors are corporate entities similar information would be required)
• The name and residence of the first company secretary of the CompanyThe company’s Memorandum and Articles of Association of a company may either be signed by the company’s subscriber or by their authorised agent.

A private limited liability company is established on the submission of the Memorandum & Articles of Association to the Registrar of Companies together with the registration fee which increases with the authorised share capital of the company. The incorporation of a company is normally completed within twenty-four to forty-eight hours from submission of the relevant documents.

The management and administration of a company is vested in its Directors who enjoy all powers except those that have been specifically reserved to the shareholders of the company, exercised in general meetings. A private company must have at least one director and unless the company is an exempt company the sole director may not be the company secretary of the company (who must be an individual). The directors are bound to act honestly and in good faith in the best interests of the company.

The company’s directors also have a number of duties that must be fulfilled including the keeping of proper accounts, having the company’s accounts audited annually, presenting the audited accounts at the annual general meeting, the preparation and submission of the official forms indicating changes within the company, the filing of income tax and VAT returns. 

The company’s share capital may be denominated in all major currencies. As a result the company’s accounts will be prepared in the currency of its share capital while tax and refunds are all paid in the same currency as the company’s share capital. This effectively reduces exchange rate risks.

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