Last Updated on Saturday, 12 February, 2022 at 12:28 pm by Andre Camilleri
Sarah Grima is a senior associate within the Commercial and Corporate Department of Fenech & Fenech Advocates.
This is the first part of a series of FAQs regarding the office of the company secretary in terms of the Companies Act (Chapter 386 of the Laws of Malta). This first part will focus on the requirements, manner and procedure for the appointment and removal of the company secretary.
How is the company secretary appointed on a Maltese company?
The first company secretary is effectively appointed upon the company’s incorporation by the subscribers to the M&As, the latter of which shall include the name, identity number and residence (or service address) of the first company secretary of the company. Subsequent company secretaries are appointed by means of a resolution of the board of directors.
Are there any eligibility requirements for the appointment of a company secretary on a Maltese company?
The law does not stipulate any academic or professional credentials that are required to be able to hold the post of the company secretary within a Maltese company. Rather, the Companies Act states that the company secretary must be a person who appears to the directors to have the requisite knowledge and experience to discharge the functions of company secretary or body corporate which is duly registered, where required, as a company service provider in terms of the Company Service Providers Act (Chapter 529 of the Laws of Malta).
Are there any disqualifications to the appointment of a company secretary on a Maltese company?
Yes. A person shall not be qualified to hold office as company secretary:
a) if such person is interdicted or incapacitated or is an undischarged bankrupt;
b) if such person has been convicted of any of the crimes affecting public trust or a crime of theft or of fraud or of knowingly receiving property obtained by theft or fraud;
c) if such person is a minor who has not been emancipated for trade;
d) if such person is subject to a disqualification order under the Companies Act; or
e) if such person is holding such office as a company service provider in terms of the Company Service Providers Act without having obtained the necessary authorisation by the Malta Financial Services Authority to provide such service.
Are there any other limitations to the appointment of a company secretary on a Maltese company?
Yes. In terms of the Companies Act:
a) no Maltese company shall have as company secretary its sole director (with the exception of an exempt company);
b) no Maltese company shall have as sole director of the company, a body corporate, the sole director of which is company secretary to the company; and
c) no Maltese company shall have as company secretary a body corporate, unless such body corporate is registered as a company service provider in terms of the Company Service Providers Act (where this is required).
Furthermore, the Registrar of Companies is empowered to restrict a person from being appointed as company secretary of a Maltese company if such person is or has been a director or secretary of an existing Maltese company and has breached the provisions of the Companies Act for three times within two years and remains in default for one or more of such breaches.
Can a Maltese company have more than one company secretary?
Yes. While it is common practice to have one company secretary on a Maltese company, there may effectively be more than one person appointed to the office of company secretary at any given time.
How and when does the company secretary’s term of office come to an end?
A company secretary may tender his or her resignation at any time, generally by submitting a letter of resignation to the company.
Alternatively, a company secretary may, at any time, be removed from office by the directors of the company.
Within 14 days of the effective date of the resignation or removal of the company secretary, a statutory Form K is to be submitted to the Malta Business Registry in notification of such resignation/removal/change to the company secretary.
In default, every director of the company in breach of such obligation shall be liable to a penalty, and for every day during which the default continues, to a further penalty.
What happens if the post of the company secretary on a Maltese company becomes vacant at any time?
In the event that the post of company secretary becomes vacant at any time, the directors of the company have the duty, within 14 days from the date of the vacancy, to appoint another individual (or a body corporate, as applicable) to fill the post.
In default, every director of the company in breach of such obligation shall be liable to a penalty, and for every day during which the default continues, to a further penalty.
Note that during any interim vacancy of the office of the company secretary, anything required or authorised to be done by or to the company secretary may be done by or to any officer of the company authorised generally or specifically in that behalf by the directors.
In addition to the statutory notification to be made to the Malta Business Registry, are there any other obligations incumbent upon the directors of a Maltese company in the event of a change to the company secretary?
Yes. Any changes to the company secretary must be reflected and recorded in the internal register of officers of the company.
Is there a requirement to amend the M&As of a Maltese company upon a change to the company secretary under Maltese law?
No.
Look out for the next set of FAQs which will focus on the statutory obligations of the company secretary
