The issuance of the Companies Act (Register of Beneficial Owners) (Amendment) Regulations, referred to as Legal Notice 247 of 2020 confirms that the Registrar of Companies shall have further powers to investigate the ultimate beneficial ownership of the companies that are to be or are registered in Malta. These new Regulations, which came into force in June 2020, shall require Maltese companies to abide by new annual filing obligation confirming ultimate beneficial ownership of the relative company’s issued shares.
This new legal notice introduces changes to the regulations set out in Companies Act (Register of Beneficial Owners) Regulations, which came into force on the 1st January 2018. The 2018 regulations introduced the obligation on all companies set up in Malta to file a declaration with the Registrar of Companies of all the beneficial owners of the company. The filing of such declaration was required upon the incorporation of the company and upon the change in the corporate structure or control of the company.
By virtue of the new regulations, upon the anniversary from the date of their incorporation, Maltese companies shall need to file a return with the Malta Business Registrar confirming:
- That there was no change in the details on the beneficial owners which had previously been provided.
- The changes in the details on the beneficial owners which had previously been provided.
The annual return would need to be signed by one of the directors of the company or the company secretary. The filing of this annual return shall need to be done within forty-two days from the date of the company’s anniversary. Furthermore, in instances in which the ultimate beneficial owner is not identified and thus details of the senior managing officials are provided, any changes to the details of these senior managing officials would need to be submitted to the Malta Business Register within fourteen days from the effective date of change.
It is important to note that Maltese companies which fail to abide by the above obligations would be subject to a penalty of five thousand Euro which shall increase with a daily penalty of one hundred Euro until the required submissions are made.
The new Regulation also empowers the Registrar of Companies to issue a notification to the defaulting company stating that the company is to file the required documentation within a period of one month. Should the defaulting company fail to do so, the Registrar of Company may proceed to publish information on the defaulting company in the Government Gazette, on the Malta Business Register’s online database as well as daily newspaper together with a notification that, upon the expiration of three months from the said notice, the defaulting company’s name shall be struck off the Maltese company register and the assets of the company shall devolve upon the Government of Malta. Moreover, the Registrar of Companies will have the power to strike off the name of a Maltese company, if any of its beneficial owners become sanctioned by international organisations. It should be noted that should the Maltese company be struck off by the Registrar of Companies due to the reasons explained above, the rights and responsibilities of the directors, officers of the company and member of the company shall continue and may still be enforced.
Further, the new regulations also provides that the Registrar of Companies may restrict the setting up of a new companies if the directors being proposed to the Board already hold the position of directors in other Maltese companies that are failing to comply with the abovementioned obligations. By virtue of this regulation, the powers of the Registrar is being enforced to an extent that the Registrar may now ask for any document or information which is deemed necessary to confirm the correctness of the information on the beneficial owners being filed.
The new regulations shall have the right to conduct physical on-site investigations at the premises of a Maltese registered company for the purposes of establishing the identity of the beneficial owners and ensure that the information submitted to the Malta Business Registry is accurate. The officers of the company are obliged to assist and collaborate with the representatives of the Registrar. In the case that, following an on-site inspection, the Registrar deems it necessary to update the information on the Maltese company’s beneficial owners, each officer shall be liable to a hefty penalty.
Finally, the newly introduced legal notice also imposes new obligations on company liquidators to keep a register of the beneficial owners of the company for a period of ten (10) years from the date of publication of the striking of the company’s name off the register.
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