Legal environment & Corporate forms

LEGAL ENVIRONMENT

Maltese Company Law provides numerous possibilities to operate in Malta and worldwide. These operational structures can be basically divided into regulated and non-regulated structures built on different pillars (corporate forms).

CORPORATE FORMS

The  main types of corporate entities that can be incorporated in Malta are:

 

Companies:

  • Public Limited Liability Company;
  • Private Limited Liability Company;

 

Partnerships:

  • Partnership en commandite, with the capital divided / not devided into shares;
  • Partnership en nom collectif.

 

Public Limited Liability Company (plc)

Main feature: a plc may offer its shares or debentures to the public, its shares may be listed on the Maltese Stock Exchange.

Applicable law: the Companies Act, Chapter 386 of the laws of Malta.

Share capital: minimum share capital of a plc amounts to EUR 46,588 and may be denominated in any main currency, with at least 25% paid up at the incorporation.

Shareholders: incorporation of a plc requires at least 2 shareholders, who can be natural and / or legal persons, and need not to be Maltese residents. The number of shareholders is unlimited.

Liability of shareholders: limited up to the unpaid amount of shares they hold.

Management: a plc is managed by a Board of Directors, which comprises at least two Directors, who can be natural or legal persons, and need not to be Maltese residents.

Secretary: each plc is obliged to have a company secretary, who should be a natural person and need not to be a Maltese resident.

Registered office: each Maltese plc should have a registered seat in Malta.

Accounting: annual accounts should be prepared in accordance with the International Financial Reporting Standards (IFRS), audited and filed with the relevant public authority and approved by Shareholders at the annual general meeting at the end of each financial year.

Taxation: general rules as presented in Section: Taxation in Malta

Incorporation: requires 3-5 working days.

 

Private Limited Liability Company (ltd)

Main feature: being the most commonly chosen corporate form in Malta, an ltd introduces limits to the number of its shareholders and the transfer of its shares and does not provide a possibility to offer shares or debentures to the public.

Applicable law: the Companies Act, Chapter 386 of the laws of Malta.

Share capital: minimum share capital of an ltd amounts to EUR 1,165 and may be denominated in any main currency, with at least 20% paid up at the incorporation.

Shareholders: an ltd may be incorporated by a sole shareholder who can be a natural or a legal person, and need not to be a Maltese resident. The maximum number of shareholders is 50.

Liability of shareholders: limited up to the unpaid amount of shares they hold.

Management: an ltd is managed by a Board of Directors, which comprises at least one Director, who need not to be a Maltese resident. If an ltd is incorporated by 2+ Shareholders, its Director can be a natural or a legal person. However, in case of an ltd incorporated by a sole shareholder, its Director has to be a natural person.

Secretary: each ltd has a company secretary, who should be a natural person and need not to be a Maltese resident.

Registered office: each Maltese ltd should have a registered seat in Malta.

Accounting: annual accounts should be prepared in accordance with the International Financial Reporting Standards (IFRS), audited and filed with the relevant public authority and approved by the Shareholders at the annual general meeting at the end of each financial year.

Taxation: general rules as presented in Section: Taxation in Malta

Incorporation: requires 3-5 working days.

 

Partnership en commandite

Main feature: a limited partnership is incorporated by at least two partners: (i) a general partner, whose liability towards the partnership is unlimited and joint and several and (ii) a limited partner, whose liability is limited to the amount, if any, unpaid on the contribution.

Applicable law: the Companies Act, Chapter 386 of the laws of Malta.

Capital: consists of the contributions in cash and / or in kind made by partners, and may (but doesn’t have to) be divided into shares.

Partners: at least one general partner and one limited partner. The number of partners is unlimited.

Liability of general partners: is unlimited, joint and several.

Liability of limited partners: is limited to the amount unpaid on the contribution.

Management: representation and administration of a partnership en commandite is vested in its general partner(s), no limited partner(s) can perform this function.

Taxation: A Partnership en commandite is tax transparent, unless (i) its capital divided into shares, in which case it is treated as a company or (ii) it voluntary chooses to be treated as a company in terms of Maltese Income Tax Act.  If a Partneship en commandite is tax transparent its profits and gains are taxed at the level of its Partners at their applicable personal tax rates.  If a Partneship en commandite is treated as a company for income tax purposes, all relevant provisions of Maltese Income Tax Acr shall apply and such Partnership will be taxed according to the general rules as presented in Section: Taxation in Malta.

Registered office: each Maltese partnership should have a registered seat in Malta.

Accounting: in the case of a partnership en commandite, which capital is not divided into shares, the annual accounts need not to be audited or filed with any public authority. General partner(s) shall communicate to limited partner(s) the balance sheet and profit and loss account of a partnership en commandite at the end of each accounting period.

However, when the capital of a partnership en commandite is divided into shares, the regulations for limited liability companies shall apply and it will be treated as a limited liability company for income tax purposes, which means that annual accounts should be prepared in accordance with the International Financial Reporting Standards (IFRS), audited and filed with the relevant public authority and approved by Partners at the annual general meeting at the end of each financial year.

Incorporation: requires 3-5 working days.

 

Partnership en nom collectif

Main feature: a general partnership, which has its general obligations guaranteed by the unlimited, joint and several liability of all its partners.

Applicable law: the Companies Act, Chapter 386 of the laws of Malta.

Capital: consists of the contributions in cash and / or in kind made by partners.

Partners: may be formed by two or more partners. The number of partners is unlimited.

Liability of partners: is unlimited, joint and several.

Management: administration and representation of a partnership en nom collectif is vested in each of the partners severally.

Registered office: each Maltese partnership should have a registered seat in Malta.

Accounting: the annual accounts need not to be audited or filed with any public authority.

Taxation: A Partnership en nom collectif is tax transparent, which means its profits and gains are taxed at the level of its Partners at their applicable personal tax rates. A Partneship en nom collectif can voluntary choose to be treated as a company for income tax purposes, in which case all relevant provisions of Maltese Income Tax Acr shall apply and such Partnership will be taxed according to the general rules as presented in Section: Taxation in Malta.

Incorporation: requires 3-5 working days.


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