1. Which law is applicable to the legal capacity and right of representation of a legal entity?
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The applicable law is The Companies Act: http://www.justiceservices.gov.mt/DownloadDocument.aspx?app=lom&itemid=8853&l=1 (Chapter 386) of the Laws of Malta.
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2. What criteria/rules are used to determine the applicable law (for example the law of incorporation or the actual seat)?
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Company representation and companies are regulated by the law of the jurisdiction of where the company is incorporated. Refer to the law of incorporation.
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3. Which international conventions have to be respected?
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There are no international conventions which have to be respected. The law of incorporation is followed in all circumstances.
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4. Are there international conventions with regard to certain countries?
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No.
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5. Are all companies registered in a public register? What are the effects of registration? (please add a link to the register, if possible)
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In order for a company incorporated in Malta to be able to start exercising its functions it must be registered with the Registry of Companies. The Registry of Companies keeps a register of all companies, indicating their status (that is whether they are active, in liquidation or struck off), which register is online and is accessible from https://registry.mbr.mt/ROC/. Article 77 of The Companies Act provides that upon registration a company incorporated in Malta is issued a certificate of incorporation and the company will come into existence from the date of registration. Moreover, a certificate of registration given in respect of a company is conclusive evidence that the requirements of The Companies Act have been complied with and that the company is duly registered as a public or private company under The Companies Act.
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6. Does a foreign company have to be registered in your public company register?
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No.
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7. Who has the legal right of representation of a legal entity?
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Representation vests in the person or persons indicated in the Memorandum and Articles of Association of the company in question. The Memorandum and Articles of Association may provide for third persons to be able to represent a company, however in this case, the Directors of the company would be required to call an extraordinary general meeting to appoint said representative and to sign a special resolution for this purpose.
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8. Must the right of representation be registered (if yes, please add a link to the register, if possible)?
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Yes, the Memorandum and Articles of Association indicating the legal representatives and the judicial representatives of the Company are registered with the Malta Business Register. Any subsequent changes in legal and/or judicial representation in the Memorandum and Articles of Association are to be registered at the same registry by means of special forms that have to be filled in and submitted.
Representation by means of a company resolution is a special mandate usually used for specific transactions or purposes and therefore it does not have to be registered. For example, when a person is appointed to represent a company on a particular authentic act or on any other written instrument, the company resolution is usually attached to said act or written instrument.
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Representation by means of a company resolution is a special mandate usually used for specific transactions or purposes and therefore it does not have to be registered. For example, when a person is appointed to represent a company on a particular authentic act or on any other written instrument, the company resolution is usually attached to said act or written instrument.
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9. If the right of representation must be registered, what legal effect does the registration have with respect to third parties?
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Third parties have easy access to the Memorandum and Articles of Association and are able to verify the representation of any Company incorporated in Malta. Since the register is available to the public in general it is deemed that the public is informed and therefore the said registered representation affects third parties. A specific company resolution which appoints a different representative from the one or ones registered in the register, is available to third parties when it is attached to a public deed.
Acts entered into by persons who are not the legitimate representatives of a Company or who have not been specifically appointed as such for the particular transaction may be contested.
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Acts entered into by persons who are not the legitimate representatives of a Company or who have not been specifically appointed as such for the particular transaction may be contested.
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10. May the rights of the legal representative be restricted? If yes, please explain how (e.g. by laws or the articles of association)?
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Persons appointed as legal representatives of a Company in the Memorandum and Articles of Association of the said company are not restricted to act in particular circumstances only but will have the power to represent the company on all documents. The Memorandum and Articles of Association may however limit the manner in which representation is exercised. For instance the Memorandum and Articles of Association could also indicate that the legal representation is to be shared jointly between two persons, thus providing some restrictions from a person acting on his own.
In cases where specific authorisation is given by the Board of Directors to a third person to represent the company, this however is usually restricted to particular specific cases.
Legal representatives that are appointed without restrictions and for an indefinite period have to be registered at the registry by means of the above-mentioned forms.
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In cases where specific authorisation is given by the Board of Directors to a third person to represent the company, this however is usually restricted to particular specific cases.
Legal representatives that are appointed without restrictions and for an indefinite period have to be registered at the registry by means of the above-mentioned forms.
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11. Does that restriction have any legal effect towards third persons?
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Article 137 paragraphs (4) and (5) of the Companies Act state:
(4) Notwithstanding anything contained in the memorandum and articles of association relating to the manner in which the representation of the company is to be exercised, anything done by the board of directors of a company which exceeds the limits of their authority or by any director which is beyond his powers, shall be binding on the company unless that act exceeds the powers granted to the board of directors or to a director, as the case may be, by virtue of this Act.
(5) Any limitation on the powers of the board of directors or of any director of the company shall not be relied on as against third parties independently of whether that limitation, published or not, arises from the memorandum or articles or from any resolution of the general meeting or from a decision of the board of directors of the company.
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(4) Notwithstanding anything contained in the memorandum and articles of association relating to the manner in which the representation of the company is to be exercised, anything done by the board of directors of a company which exceeds the limits of their authority or by any director which is beyond his powers, shall be binding on the company unless that act exceeds the powers granted to the board of directors or to a director, as the case may be, by virtue of this Act.
(5) Any limitation on the powers of the board of directors or of any director of the company shall not be relied on as against third parties independently of whether that limitation, published or not, arises from the memorandum or articles or from any resolution of the general meeting or from a decision of the board of directors of the company.
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12. How can the representative prove the right of representation (e.g. extract in paper from the registry certified by some authorities, extract from public registry)?
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The representative who is appointed by means of the Memorandum and Articles of Association proves his appointment by providing a copy of the Memorandum and Articles of Association. The representative who is appointed by means of a company resolution proves his appointment by providing the said company resolution duly signed by the directors or else an extract from the minutes of the extraordinary general meeting in question.
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13. Are there any circumstances where the transactions entered into by the legal representative of a company are considered not binding on the company (e.g. for a valid transaction should there be a decision or consent of the shareholders, supervisory body)? If yes, please explain.
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If a director is appointed as legal representative of the company, we can refer to Article 137 paragraph (4) and (5) of the Companies Act (quoted above), which indicates that anything done by the board of directors of a company which exceeds the limits of their authority or by any director which is beyond his powers, shall be binding on the company unless that act exceeds the powers granted to the board of directors or to a director. If however, the Company appoints through a specific resolution a person who is not a director to represent the Company, the consent of the Board of Directors is required through an extraordinary resolution of the Board of Directors for the actions to be binding on the Company.
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14. Is it possible to verify the right of representation by digital means from the register? Please indicate the source and in which language the inquiries should be conducted.
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Verifications can be made through https://registry.mbr.mt/ROC/ , where documents can be downloaded and viewed by the public. The language used is English.
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15. When anti-money laundering measures are applied, how are the beneficial owners of a legal entity registered in your country identified? Would there be different possibilities for professionals from other countries to identify the beneficial owners? Please indicate the source and in which language the inquiries should be conducted.
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A register of beneficial owners is currently being set up in Malta. The beneficial owners of a Maltese incorporated company can however be identified from the details which are available online on the Malta Business Register.
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