New legislative amendments under Act LX of 2021
Act LX of 2021 introduced new changes under the Companies Act (Chapter 386 of the Laws of Malta), hereinafter referred to as ‘the Act’. Those amendments entered into force on 30th October 2021 by virtue of Legal Notice 417 of 2021.
Act LX reflected the required transposition of Directive (EU) 2019/1151 concerning the use of digital tools and processes in company law (hereinafter: the Digitalisation Directive). Furthermore, it focused on the requirements relating to the appointment and holding of office of company directors, the disqualification provisions with respect to company directors and the imposition of new duties to the Registrar.
Article 69 – Contents of the memorandum and articles of the company
Every company will be required to stipulate in its memorandum the electronic email address of the Company – Article 69(1)(d). This address has to be used for all official electronic correspondence and notifications that are sent by the Registrar to the company including the physical registered office address. Hence, it is important for the electronic email address to be valid and accessed by the company’s officers regularly.
Article 139 – Appointment of Directors
New obligation on company directors upon their appointment is that they must sign the memorandum of the company or otherwise submit a written declaration to express their explicit consent for such appointment in the said company – Article 139(1).
In addition to that, if a person is to be appointed as a director, he is required to declare to the Registrar if he or she is aware of any circumstances which could eventually lead to his disqualification. Such circumstances shall reflect company law provisions in Malta, in particular the disqualification provisions in the Act as well as any other disqualification provision arising from the laws of other Member States – Article 139(5).
Article 140 and 142 – Disqualification of Directors
Article 140(7) stipulates a new duty on company directors. If a director is disqualified or does not hold the necessary licence to act as a company service provider, and given that no legal exceptions are applicable in this case, the Registrar shall inform the company accordingly. The company then has to proceed by removing the director and submitting the necessary statutory form within 14 days from the removal. In case the company is in default, the Registrar may apply before the competent court asking for the removal of the person concerned.
Act LX of 2021 also changes the provisions relating to the disqualification of directors by including a new disqualification in cases when a director is acting and providing the services of a company service provider without the required authorisation from the Malta Financial Services Authority – Article 142(1)(e). The second change concerns the consideration that has to be taken by the Registrar when a person applies for the position of a director. Separately from the disqualification under the Act, the Registrar may also take into account any previous disqualifications of the person in question related to his appointment or else holding such office in any other Member State.
Article 401 – Legislative Powers of the Registrar
The Registrar has been also entrusted with more responsibilities, including taking up any measures under the law to ascertain the identity of individuals and the reliability of their information, to cooperate with competent authorities and provide free access to maintained websites by the Registrar; and to deal with any aspect of digitalisation of company law procedures and consult with the Minister responsible for commercial partnership in issuing guidance notes to the public.
Form K and Form K(1)
Form K has been replaced with a new version which is divided in two sections – A and B. Section B refers to newly appointed directors following a change in the directors of a company, so as to indicate their consent and confirm their declaration as required under Article 139 of the Act.
For electronic filing, Section B of the amended Form K shall be submitted separately and this has to be uploaded under Private Documents – ‘Declaration of Director/s in terms of Law’ as a scanned copy together with Section A that is generated through the online system. All scanned copies of Section B have to be signed in wet ink or supplemented with a digital signature of the respective director.
The new Form K(1) reflects some reporting requirements under Article 139 of the Act and has to be uploaded under Private Documents as a scanned copy when filling a company registration through the online system. In a similar manner to form K, Form K(1) has to be signed in wet ink or accompanied by a qualified electronic signature of the respective director.
All forms can be accessed from the link below:
Note: As from 1st February 2022, only those forms will be accepted. If any other forms or declarations are used, the proposed companies/documents will be rejected.
Author: Stephanie Marinova
