An introduction to single member companies in Malta

Our Malta expert looks at a quirk of Maltese law which allows single-member companies, and tells us how to set one up

In Malta it is possible for certain companies to have only one shareholder. In order for a company to be permitted to have a single member it must be private and must qualify for the status of an exempt company. Another condition is that the objects of such a company must specify which activity of the company shall be its main activity and the business of the company shall consist principally of that activity.

Following recent amendments, the sole shareholder of the company may now be an individual or another company.

Exempt companies

A private company shall have the status of an exempt company if the following conditions are contained in its memorandum or articles:

  • that the number of persons holding debentures of the company is not more than 50
  • that no body corporate is a director of the company, and neither the company nor any of the directors is party to an arrangement whereby the policy of the company is capable of being determined by persons other than the directors, members or debenture holders thereof.

Unlike other types of company, private exempt companies may have as their company secretary their sole director. Private exempt companies are also exempt from certain other requirements relating the granting of loans to their directors or the directors of their parent company, or the entering into any guarantee or the provision of security in connection with a loan made to such directors. Moreover, small private exempt companies may choose to publish abridged financial statements which exclude the directors’ report, the income statement and certain notes to the financial statements.

Setting up a single member company

As outlined above, a company which has the status of an exempt company may have a single member. Following amendments which came into effect in 2013, the single member may be an individual or a body corporate.

The objects of a single member company must specify which of its activities shall be its main activity and the business of the company shall consist principally of that activity. In the past, the law referred to such main activity as a “trading” activity, however another amendment which also came into effect in 2013 deleted the reference to “trading” in this context. Single member companies are thus now afforded greater flexibility in terms of the main activities that they may carry out.

A company may become a single member company upon incorporation or through the acquisition of all its shares by one person. In the latter case, the company is required to notify the Registrar of Companies. The notification requirement also applies to cases whereby the company ceases to be a single member company.

Read more about doing business in Malta

Dr Clint  Bennetti
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