Malta is a generally business-friendly country. The Maltese government is in full support of the business sector and it offers a lot of business opportunities and incentives for investors who want to set up a business in Malta. One of the first and most crucial steps in company creation is the selection of a legal structure (company type). There are many company types in Malta and before committing to one, you should evaluate all your options.
Below is a list of all the entities in which your company can exist in Malta:
Limited Liability Companies
After profit the next priority for investors is security. Limited liability companies protect investors by allowing them to have limited responsibility for the business’s debts and other obligations. In this legal structure, the investors’ personal assets are safe because their liability is limited to their contributed share capital. This is why this form of commercial partnership is popular among investors.
Limited liability companies can operate as either public or private companies. A public company has the right to sell its shares to the general public by issuing a prospectus. The sale of public company shares should not be subject to a restricted transfer of shares. Public companies are required to publish their accounts. They have to file annual audited financial statements with the Registry of Companies.
A private company, on the other hand, cannot issue out shares or debentures to the general public. The number of shareholders is limited to 50. Further restrictions and conditions apply to private companies which are classified as private exempt companies. Private exempt companies are not allowed to place corporate bodies as directors. They are also limited to specified trading activity and have limitations on the number of people they can issue out debentures to.
Another refined classification is a single member private exempt company. This type of company can exist with only one shareholder who also allowed to hold the directorship and also be the secretary for the company.
General Partnerships
General partnerships are also known as partnership ‘en nom collectif’. General partnerships are made up of general partners who number two or more. The general partners are all under unlimited joint liability to the partnerships’ debts and obligations. Certain statutory conditions apply to general partnerships which are exempted from having at least one general partner liable for the partnerships’ activities and debts. This exemption leads to the partnership being regulated in ways similar to that for limited liability companies.
Limited Partnerships
Limited Partnerships are also known as a partnership ‘en commandite’. Limited partnerships are formed by a minimum of one general partner and one limited partner. General partners are affected by unlimited liability and the limited partners have liability limited to their unpaid contributions.
Both individuals and corporate entities qualify to be partners. It is possible for a limited partnership to exist without a general partner. This exemption makes the partnership answerable to regulations similar to that applicable to limited liability companies. The partnership will be liable to produce audited accounts amongst other measures.
Administration duties can only be bestowed on any and all general partners unless specified otherwise in the partnership agreement. Limited partners cannot take over management of the partnership’s business activities but can be given power of attorney privileges for specified acts and transactions. Limited partnerships can also choose to disclose contributions by partners as shares.
Foreign Branch companies
Foreign companies incorporated outside Malta are authorized to establish a branch within the country. Similarly to other commercial partnerships and corporate entities covered by the Companies Act setting up a branch office in Malta requires registration with the Maltese Registrar of Companies. Registration should take place at least a month before setting up an office in Malta.
Professional Assistance
For professional help and insights into how to choose a partnership in Malta, reach out to SIGTAX. Our team of accountants, lawyers, and consultants stay au courant with the latest business trends and regulations in Malta. Thus, you can be confident that you will get relevant info which guides you to do everything the right way and in your favor.
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