10 May Types of companies in Malta
In Malta, limited liability companies can either be a ‘private limited company’ or a ‘public limited company’.
Private limited companies
A private limited company offers limited liability for its shareholders. It means they are not personally responsible for the debts of the company. However, there are certain restrictions to prevent someone from buying the business. A private limited company must have a ‘limited’’ or ‘ltd.’ in the name.
A private limited company cannot exceed the amount of 50 shareholders. It must be incorporated by at least two initial members. However, the law also allows for a special form of private exempt company with only one shareholder. Additionally, it cannot sell its shares in the Malta stock exchange. The minimum authorised share capital for a private limited company in Malta is €1,165. At least 20% of the nominal value of each share taken up must be paid up when the business is declared. There are no obligations for the accounts to be public.
Also, a private limited is the most common company in Malta.
Public limited companies
On the opposite, there is no maximum number of shareholders in the case of a public company. The minimum amount of shareholders is two and the minimum amount of shares is 50. A public limited company is obligated to show its finances. The shares can be traded or sold in the Malta stock exchange. The minimum authorised and issued share capital for a public limited company in Malta is €46,590 with at least 25% paid when the business is open. The name of the business must end in ‘PLC’. The audited accounts can be seen by the public.
As said before, there are also partnerships in Malta and like limited liability companies, partnerships can be split in two. The two partnerships can be a general partnership and a limited partnership.
Partnerships in Malta, compared with other EU countries are not very famous.
General partnership (GP)
A general partnership (or simply partnership) is an association of two or more people carrying on a business with the goal of earning a profit. It is a group of sole traders acting together and all partners in a partnership are jointly liable. All the partners have unlimited liabilities in a general partnership. There are three rules in a general partnership; · Every partner is liable for his or her actions. · Every partner is liable for the actions of the employees. · Every partner is liable for the actions of the other partners. A general partnership is also called ‘partnership en nom collectif’
Limited partnership (LP)
A limited partnership is a form of partnership similar to a general partnership, except that where a general partnership must have at least two general partners, a limited partnership must have at least one GP and at least one limited partner.
A general partner in a limited partnership has the same liabilities of a sole trader, which is unlimited liability. The general partner will be responsible for all the debts and legal procedures. A general partner receives payments bigger than the other partners.
Because limited partners are only “contributors” to the business, they are only liable on what they invested in the business and cannot be forced to pay the business debts with personal assets. They help financially in exchange for a portion of the partnerships’ profits.
The capital in a limited partnership is divided into shares. LP’s need to be audited and registered.
Limited partnership is also called ‘partnership en commandite’.
Malta has no provision for Limited Liabilities Partnerships (LLP’s).