On 18 June 2025, Malta advanced a significant initiative to modernise its corporate legal framework with the introduction of Bill No. 136, a proposal to amend the Companies Act (Chapter 386 of the Laws of Malta). Published in the Government Gazette on 24 June 2025, the bill reflects a strategic effort to streamline governance, simplify compliance and enhance transparency within the corporate sector. These reforms go beyond technical adjustments; they signal a broader vision for a more efficient and investor-friendly jurisdiction.
A key feature of the bill is the formal integration of digital communication into corporate administration. Companies will be required to maintain an active registered email address and notify the Registrar of Companies of any changes within 14 days. This process will be straightforward, requiring only a board resolution and a simple filing, without the need to amend the Memorandum and Articles of Association. This measure reduces administrative burdens and aligns corporate practices with modern digital standards.
The bill also clarifies the rights of usufructuaries—those entitled to the benefits of shares without legal ownership. While usufructuaries may attend general meetings and receive dividends, their voting rights will only apply if expressly granted in the relevant deed or company statute. This distinction ensures a clear separation between economic benefit and governance authority, reducing ambiguity and potential disputes.
To improve transparency in shareholding arrangements, the bill introduces new rules for share pledge notifications. When shares are pledged, either the pledgor or pledgee must inform the Registrar within 14 days and notify the company concerned. This requirement adds accountability and ensures all parties are aware of encumbrances affecting company equity.
Another notable reform addresses the dissolution of private companies. Companies not subject to regulatory oversight will be allowed to dissolve without appointing a liquidator. Instead, directors may submit a prescribed form signed by all board members, who remain accountable throughout the process. This streamlined approach benefits small and medium-sized enterprises by offering a cost-effective and efficient method for winding down operations.
The bill also simplifies partnership contributions. Capital contributions from new partners will take effect immediately upon receipt, eliminating the need to amend the partnership deed. A subsequent notification to the Registrar will suffice, providing greater flexibility and responsiveness in partnership governance.
Perhaps the most innovative proposal is the introduction of cell company structures. Already used in the financial services sector, this model allows companies to create segregated unit’s “cells” within a single legal entity. Each cell can hold distinct assets or manage separate transactions, offering enhanced flexibility and risk management. This structure is particularly advantageous in complex scenarios such as mergers and acquisitions, where isolating liabilities and assets is strategically beneficial.
Finally, the bill proposes eliminating the “exempt company” classification under Article 211. Entities previously designated as exempt companies will now be referred to simply as “private companies.” While the benefits of exempt status remain, this reclassification promotes greater transparency and consistency in corporate terminology.
In summary, Bill No. 136 represents a comprehensive and forward-looking reform of Malta’s Companies Act. By embracing digitalisation, clarifying shareholder rights and simplifying administrative processes, the bill aims to create a more agile and transparent corporate environment. These reforms are expected to strengthen Malta’s position as an attractive destination for investment and enterprise, aligning its legal framework with international best practices and the evolving needs of the global business community.
