MALTA Law and Practice Contributed by: Damien Degiorgio and Ramona Galea, Fenech Farrugia Fiott Legal
a Memorandum and Articles of Association, which lay down the company’s purpose, its share capital and internal rules. It must have at least one director responsible for the company’s management and must act in the company’s best interests in accordance with the Companies Act, Chapter 386 of the Laws of Malta. An LLC must have at least one shareholder who owns the company’s share capital. It must hold an annual general meeting (AGM) once a year where the company’s shareholders are able to receive and approve the company’s financial statements and appoint directors to their posi - tion. Shareholders shall also have the right to vote on other important matters. The company is required to maintain proper accounting records and prepare financial state - ments. These must be audited unless the com - pany benefits from the applicable exemption. The company must register its annual return with the Registrar of Companies, providing the Reg - istrar with updated information on its directors, shareholders and share capital. Commercial Partnerships It is essential for a partnership to be registered with the Registrar of Companies, which regis - tration must include the names and addresses of the partners, their partnership agreement and the share capital of the partnership. Such part - nership agreement must outline the terms and conditions, including the rights and duties of the respective partners, the purpose of the partner - ship and the share of profits and losses amongst the partners. Trusts A trust requires a trust deed that sets out the terms and conditions of the trust, including the purpose of the trust, its beneficiaries, and the
duties and powers of the trustee. A person or a company must be appointed to act in the posi - tion of a trustee. A trustee is bound by a fiduciary duty to act in the best interests of the benefi - ciary by exercising the care, skill and diligence required in the management of the trust property and shall comply with the terms set out in the trust deed and applicable provisions, particularly those contained in the Civil Code, Chapter 16 of the Laws of Malta. The trust must have beneficiaries who are identi - fied and have a vested interest in the trust prop - erty being administered. It is important that the trust property is kept distinct from the personal assets of the trustee. In fulfilling his duties, the trustee must keep proper accounting records and prepare annual financial statements. 5.6 Annual Entity Maintenance and Accounting Compliance The annual maintenance costs and accounting compliance costs depend on various factors such as the type and value of assets that are held by the entity, and the type of activities the entity is involved in. 6. Commercial Leases 6.1 Types of Arrangements Allowing the Use of Real Estate for a Limited Period of Time The Maltese Civil Code regulates different types of institutes that would allow a person to use a property, or a part thereof, without obtaining full ownership. The main ones are as follows: • lease; • emphyteusis; • usufruct; • servitudes;
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