How to set up a general partnership

The" en nom" collectif in Malta, popularly known as a general partnership all over the world is very easy to set up and requires fewer formalities compared to a limited liability company. The upside to investing in partnerships in Malta is that even if you are a foreign investor, you will enjoy the same rights as Maltese investors. 
 
The peculiarities of General Partnerships in Malta
General partnerships are made up of a minimum of two partners. Partners can be either natural persons or corporate entities. A general partnership is not bound to any specific name and can use any name of choice. The major distinguishing factor between a general partnership and other commercial partnerships is that all the partners have unlimited liability.
 
The partners referred to as “general partners” who are subject to unlimited liability and they take responsibility for the partnership’s debts and liabilities with their personal assets. In the event whereby all the partners are corporate bodies with limited liability, the Registrar of Companies should be informed. In this case, the partnership will then be required to present audited accounts as a limited liability company would. In the event of dissolution, a liquidator is required to handle the venture and the respective proceedings should be in the fashion of limited liability companies as well. 
 
The Maltese partnership en nom collectif is considered to transparent for all tax purposes. Thus there is no corporate tax charged on profits as the partnership is not liable to taxation. Partners must declare their profits from the partnership when they file their personal tax returns. Tax on the income received is charged under personal tax rates. This charge is usually lower than that charged on company profits.
 
Registration Procedure
Most foreign investors often adopt the general partnerships as their preferred business structure. Registration of a general partnership takes place through the Commercial Register. Investors draw up a notarised partnership agreement and register with the Commercial Register. The partnership agreement is used to govern the partnership. The agreement discloses all the partners involved and their addresses. It contains clauses on profit sharing, duties of the partners and procedure for dissolving the partnership.
 
Share Capital
Ordinary general partnerships have no imposed minimum share capital. However, where investment funds are involved in the partnership a deposit for the required amount is to be made. An application for a financial license with the licensing authority should also be made.
 
Certification
Once approved the Commercial Register will issue out a certificate of registration to the partnership. It’s possible to get certification even before establishing the purpose or duration of the partnership. If the partnership’s activities do not require special licensing it can commence its activities once registered and licensed to trade.
 
 Learn More!
To gain more insight into the Maltese partnership system, reach out to SIGTAX. Our team of accountants, lawyers, and consultants stay au courant with the latest business trends and regulations in Malta. They can also help with legal counsel on how to set up a company in Malta including giving a profound understanding of the nations’ tax system. Thus, you can be confident that you will get relevant info which guides you to do everything the right way and in your favor.