The Companies (Amendment) Act (Act XVIII of 2025), (the “Act”) was published in the Government Gazette on 11 July 2025 and introduces targeted reforms to the Companies Act (Cap. 386, Laws of Malta) aimed at modernising Malta’s corporate framework by enhancing corporate governance, streamlining administrative processes and aligning Malta’s legal frameworks with the evolving needs of the financial and commercial sectors.
The Act focuses on four main areas:
Company Classification and Status
- The Act introduces a simplified dissolution procedure for dormant companies: It applies to companies registered for a minimum of six months, provided they meet strict conditions outlined in the Act, including not having traded in the preceding six months, having no outstanding documents or penalties, and possessing assets not exceeding €5,000.
- It grants usufructuaries of shares the right to attend general meetings and receive dividends. Voting rights are excluded unless expressly granted in the public deed or the company’s Memorandum and Articles of Association.
- The Act now states that a pledge must be registered with the Registrar within 14 days and the company must be notified accordingly. Additionally, the pledgee may enforce the pledge as the pledgor’s mandatary, only if it corresponds with Article 1887 of the Civil Code and it is allowed for in the agreement.
Streamlined Requirements and Reporting
- Increases in partner contributions now take effect immediately upon receipt by the partnership. A resolution must be filed with the Registrar within three months, eliminating the need for prior deed amendments.
- Reduced reporting obligations are outlined for small companies and private companies, potentially exempting them from submitting directors’ reports, profit and loss accounts, or auditor’s reports to the Registrar under certain conditions.
- The Act stipulates provisions for the electronic transmission of company documents, supporting digital transformation and administrative efficiency.
Improved Communication
Although the obligation for companies to have a valid company electronic mail address is not a new requirement, emphasis is being placed on companies to regularly monitor the company email address. Moreover, the Act mandates an obligation for companies to notify the Registrar of any changes to the company email address within fourteen days mirroring existing obligations for changes to the registered office.
Expanded Ministerial Powers
- The Minister is granted new regulatory powers for the better implementation of provisions, including further details on company memoranda and articles, including provision for the issue of fractional shares, and exempting certain companies from the provisions outlined in the Act.
- These new powers allow for regulations regarding the formation, constitution, authorisation, and regulation of cell companies, including the possibility for a company to convert into a cell company.
Companies registered under the Companies Act (Cap. 386) are encouraged to assess the implications of the recent amendments as well as the new provisions introduced by the Act and consider how these may impact their operations. While this article outlines the principal areas of reform, the Act also contains further technical and procedural amendments.
The commencement dates for the Act have not yet been published. The Act shall come into force on such date as may be established by notice in the Gazette by the Minister responsible for the registration of commercial partnerships.
For any further information or tailored legal advice, please do not hesitate to contact the team at David Zahra & Associates Advocates.
