Bill 136, the Companies Act (Amendment) Bill, published on the 30th June 2025, proposes significant amendments to the regulation of companies. These range from the modernisation of electronic communications to the updating of certain pertinent schedules. This is the first part of two articles that will focus on such changes.
Several amendments were made with the aim at modernising electronic communications with companies. Together with the company secretary, directors, are to monitor the company’s registered email address so that messages from the Registrar are noticed quicker. In this regard, a notice of change in registered office must include email addresses, with the change to a company’s email being required to be filed with the Registrar.
Article 73, in relation to share capital amendments, has a new proviso allowing a simple directors’ declaration (instead of a full valuation report) when the transaction is under €50,000, streamlining online filings and reducing unnecessary paperwork for minor capital changes. Currently, full valuation reports are always needed even for small amounts.
The Bill expands rules for investment companies and funds. Article 84E is amended to let a company form “cell companies” and convert to a cell company. Article 94 (investment companies with variable capital) gets new sub‑sections empowering the Minister and MFSA to apply these rules to schemes with sub‑funds or retirement funds. These changes allow more flexible fund structures (e.g. single-legal-entity funds with segregated classes) under Maltese law.
A new Article 117A is added immediately after 117 which deals with rights for usufructuaries in companies, which until now are unregulated. The new article provides a usufructuary of shares rights to attend meetings and receive dividends but cannot vote unless the deed or company articles explicitly grant voting rights..
The Bill introduces a new provision requiring that, when shares are pledged, a document outlining the details of the pledge agreement must be submitted by either the pledgor or the pledgee to the Registrar, along with the notice of pledge of shares (Form T(2)). However, the current version of the Bill does not clarify what constitutes the “particulars of the contract,” which could lead to some ambiguity. One way to address this uncertainty might be to introduce a standard form or template to accompany Form T(2).
Additionally, the Bill introduces a new sub-article (17), which explicitly allows a pledgee—or someone acting on their behalf—to exercise enforcement rights on behalf of the pledgor as their mandatary, provided the pledgee is authorized to do so by way of security under Article 1887 of the Civil Code (Chapter 16 of the Laws of Malta). In practice, pledge agreements often include clauses granting such a mandate. The legislator seems to be addressing any potential concerns by formally recognizing this common practice and incorporating it into the Act.
In addition, Article 122 (pledgors’ notices) is tightened: when shares are pledged, the pledgee must notify the company within 14 days and the company must record it in its register
The Bill suggests removing the designation of private companies that meet the criteria in Article 211 of the Act as "exempt" companies. Although the benefits and exemptions available to these qualifying private companies will remain unchanged, the term "exempt" will no longer be used. This change aims to enhance clarity, especially for foreign investors who may not be familiar with the local terminology.
Additionally, the amendments regarding "exempt" companies include a clarification on the director’s declaration required under Article 211(8) of the Act. The Bill specifies that a declaration made by just one director is sufficient, reducing the administrative burden of requiring signatures from all directors of the company.
The Bill introduces a new type of undistributable reserve called the "revaluation reserve." Gains that are actually realized—such as those from the sale of an asset—do not qualify as part of the "revaluation reserve." This exclusion of realized gains is consistent with the current definition of "profits available for distribution" under the Act. By designating the revaluation reserve as an undistributable reserve, the Bill ensures that unrealized gains from asset revaluations cannot be distributed as dividends, thus safeguarding the company’s capital base and protecting the interests of creditors.
Recent amendments to Article 83 of the Act may still provide a potential avenue for extracting amounts credited to the revaluation reserve under certain conditions.
Article 146 is amended to strengthen transparency when a court-appointed administrator (or similar) is involved: within 14 days of appointment or removal, the administrator must file a prescribed return giving details of the order or resignation. Under Article 154, the offence for false statements to auditors is clarified. An officer who recklessly makes misleading statements (written or oral) to auditors will be punishable by fine or imprisonment.
A major new feature is Article 214A: a “simplified dissolution” for very small companies. A company registered at least six months can apply to be struck off by meeting conditions, which include the following:
This amendment should significantly improve liquidations for very small companies which until now required full liquidation processes.
Finally, the Bill expands ministerial rule-making authority and updates schedules. Article 425 gains new paragraphs allowing regulations on partnerships’ Maltese offices and e‑mail addresses, and on specialized limited liability companies in targeted economic sectors. Article 431 deletes an outdated exception and broadens small-company relief, while Schedule changes update references (e.g. Article 213B) and reporting requirements.
In conclusion, Bill 136 aims at facilitating certain processes in relation to companies. This would ensure that companies are regulated under a more efficient, robust and business-friendly framework to reflect modern commercial realities.
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Author: Dr Karl Cauchi