Amendments to the Companies Act

Various Financial Services Laws (Amendment) Act

By means of Act V of 2020, Various Financial Services Laws (Amendment) Act, various financial services laws have been amended, including amendments to the Companies Act (the “Act”), Chapter 386 of the laws of Malta.

The amendments include the following:

Removal of Second Schedule to the Act

The Second Schedule to the Act which used to provide for the information to be included in a prospectus has been removed and this information is now provided in the Financial Markets Act.

Offer of securities to the public

In terms of the amendment to Article 89 of the Act, it is now specified that a prospectus should be published by a public company when making an offer of securities to the public in a Member State of the European Union or EEA State.

Furthermore, Article 96A has been included in order to cater for situations where a public company makes an offer of securities to the public in a third company. In this regard, the directors should deliver to the Registrar a notice containing the specified information and failure to do so would result in a penalty.

Companies Act (Amendment) Bill

By means of the Companies Act (Amendment) Bill which were tabled to the Parliament on the 13th May 2020, further proposed amendments are sought to be effected to the Companies Act.

The proposed amendments include the following:

Disqualification for appointment as Director or Company Secretary  

In terms of the Bill, an individual who has been a director or a company secretary and who has breached the provisions of the Companies Act for the third consecutive time in a period of two years from the first breach, would be disqualified from being appointed as a director or company secretary.

Furthermore, if the individual is not qualified to be appointed due to a conviction of any crime affecting public trust or of theft or of fraud, the Bill provides for the time periods during which this disqualification shall remain valid, depending on the punishment for the crime.

 Electronic filing and electronic signatures

The proposed amendments seek to provide the Minister responsible with the power to issue regulations for electronic filing and/or electronic signing of notices required by the Act, the issuing of electronic certificates, and any other ancillary matters.

Extending the term of holding the annual general meeting and holding of virtual meetings

The Bill proposes that the Minister is allowed to issue regulations on the holding of annual general meetings, particularly in relation to extending the term for the holding of the annual general meetings, and for the laying and approval of accounts. In addition, the Minister may provide for suspension of any periods to general meetings, whether ordinary or extraordinary and to the holding of virtual annual general meetings and other meetings.

Please feel free to contact us if you require any further information on the Companies Act.