Companies Act (Cap. 386), article 2

2. (1) In this Act, unless the context otherwise requires, the following expressions have the m eaning hereby assigned to them - S.L. 595.27. "Agency" means the agenc y established by the Malta Business Registry (Establishmen t as an Agency) Order ; "annual accounts" means the i ndividual accounts required by article 167 and, where applicabl e, also the consolidated accoun ts required by article 170; "appointed day" means the date a ppointed by the Minister for th e coming into force of this Act; "approval", in relation to a prosp ectus, means the positive act at the outcome of the scrutiny of the completeness of the prospectus b y the Malta Financial Services Authority or the regulatory authority; ' "associated undertaking" means an under-taking in which another undertaking has a participating interest, and over whos e operating and financial policies that other undertaking exercis es significant influence. An undertaking is presumed to exercise a significant influence over another undertaking where it has 20% or more of the shareholders’ or members’ voting rights in that oth er undertaking; Cap. 281. "auditor" shall have the meaning assigned to it in the Accountancy Profession Act or regulations issued in terms thereof; S.L. 373. 01. "beneficial owner" shall, unless otherwise stated, have the sam e meaning assigned to it in the Prevention of Money Laundering and Funding of Terrorism Regulations , and "beneficial ownership" shall be construed accordingly; "body corporate" means any entity having a legal personality distinct from that of its members, and includes a foreign corporation; "central securities depository" means a legal person, that operates a securities settlement system and is authorised to pr ovide at least one other of the following services: (i) initial recording of secur ities in a book- entry system; (ii) providing and maintain ing securities accounts at the COMP ANIES [CAP. 386. 5 top tier level; "certificate of registration" when used in relation to a compan y means a certificate of registra tion issued under this Act or un der the Ordinance and the words "registration", "registered" and their derivatives shall be c onstrued accordingly; "commercial partnership" means a company or other commercial partnership formed and registered under this Act or formed and registered under the Ordinance where applicable; "the Community" means the European Community established by the Treaty of Rome in 1957 and amended institutionally and otherwise in 1986 by the Single European Act, in 1993 by the Treaty on European Union, in 1997 by the Treaty of Amsterdam and in 2001 by the Treaty of Nice, and as amended by accession agreements and as may be furthe r amended from time to time; "company" means a company formed and registered under Part V of this Act or the Ordinance; ""company secretary" means a person who holds the office of a company secretary in terms of article 138; "consolidated accounts" means the accounts required by article 170; "contributory" shall, unless otherwise stated, have the meaning assigned to it by ar ticles 215 to 217; "court" means the Civil Court (Commercial Section); "debenture" includes debenture stock, bonds and any other debt securities o f a company; "dematerialised form" in relation to securities issued by a com pany means the form where such securities exist only as book-entry r ecords; "director" includes any person occupying the position of direct or of a company by whatever nam e he may be called carrying out substantially the same functions in relation to the direction o f the company as those carried out by a director; "directors’ report" in relation to a company, means the directo rs’ report required by article 177; "EEA State" means a State which is a contracting party to the agreement on the Europ ean Economic Area sign ed at Oporto on the 2nd May, 1992 as amended by the Protocol signed at Brussels on the 17th March, 1993 and as ame nded by any subsequent acts; "electronic means" means electronic equipment used for the processing, including digital comp ression, and the storage of d ata, and through which information is initially sent and received at its destination; that information being entirely transmitted, conve yed and received in a manner to be de termined by the Registrar; "equity securities" means shares and other securities which are equivalent to shares in companies or which are convertible to s uch shares, or securities which give such right of conversion, prov ided such securities of the latter type are issued by the issuer of the underlying shares or by an entity belonging to the group of the said 6 CAP. 386.] COMP ANIES issuer; "euro" refers to the currency unit of the participating states in the European Monetary Union; "exempt company" means a com pany satisfying the conditions laid down in sub-article (2) of article 211; "expert", except where otherwise specifically defined in this A ct, means an auditor whether or not assisted by a specialist valuer ; "extraordinary resolution" has the meaning given to it by artic le 135; "group company", in relation to any company, means any body corporate which is that company’s subsidiary or parent company, or a subsidiary of that company’s parent company, and the term "group" shall be construed accordingly as well as meaning a par ent undertaking and all its subsidiary undertakings; (i) for all Community issuers of securities which are not mentioned in paragraph (ii) hereof, the Member State where the issuer has its registered office; (ii) for any issues of non-equity securities whose denomination per unit amounts to at least one thousand euro (1,000), and for any issues of non-equity securities giving the right to acquire any transferable securities or to receive a cash amount, as a consequence of their being converted or the rights conferred by them being exercised, provided that the issuer of the non-equity securities is not the issuer of the underlying securities or an entity belonging to the group of the latter issuer, the Member State where the issuer has its registered office, or where the securities were offered to the public, at the choice of the issuer or the offeror, as the case may be. The same regime shall be applicable to non-equity securities in a currency other than the euro, provided that the value of such minimum denomination is nearly equivalent to one thousand euro (1,000); ( i i i ) f o r a l l i s s u e r s o f s e c u rities incorporated in a third country, which are not mentioned in paragraph (ii) hereof, the Member State where: (a) the securities are intended to be offered to the public for the first time after the date of entry into force of this provision; or (b) w h e r e t h e f i r s t a p p l i c a t i o n f o r a d m i s s i o n t o trading on a regulated market is made, at the choice of the issuer, the offerer or the person asking for admission, as the case may be, subject to a subsequent election by issuers incorporated in a third country in the following circumstances: i. where the home Member State was not determined by their choice; or COMP ANIES [CAP. 386. 7 ii. in accordance with point (1)(i)(iii) of Article 2 of Directive 2004/109/EC of the European Parliament and of the Council of 15 December 2004 on the harmonisation of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market; "immobilisation" means the act of concentrating location of physical certificates relating to securities issued by a compan y in a central securities depository in a way which enables subsequent transfers to be made by book-entry; "individual accounts" means the accounts required by article 167; "investment company with fixed share capital" means a public company falling within the terms of article 194; "investment company with variable shar e capital" means a company falling within the terms of article 84; "issuer" means an entity having a legal personality distinct fr om that of its members which issues o r proposes to issue securitie s; Cap. 345. "Maltese regulated market" means a regulated market duly authorised by the competent authority in accordance with articl e 4 of the Financial Markets Act ; "member", except where otherwis e specifically defined, means a shareholder of a company and a partner in any other commercial partnership; "Member State" means a member state of the European Community; "Minister" means, unless othe rwise stated, the Minister responsible for the registratio n of commercial partnerships; "money market instruments" means those classes of instruments which are normally dealt in on th e money market, such as treasu ry bills, certificates of deposit and commercial papers and exclud ing instruments of payment; "name" in relation to an individual means that individual’s fir st name or names and surname; "notice" shall mean a notice in writing of any kind; Cap. 345. "offer of securities to the public ", unless otherwise stated, s hall have the same meaning assigned to it in the Financial Markets Act ; "officer" in relation to a company, includes a director, manage r or company secretary, but does not include an auditor; Cap. 168."the Ordinance" means the Commer cial Partnerships Ordinance *; "ordinary resolution" has the mean ing given to it by article 13 5; "oversea company" means a b ody corporate constituted or *Repealed by this Act. 8 CAP. 386.] COMP ANIES incorporated outside Malta; "participating interest" means rights in the capital of other undertakings, whether or not represented by certificates, which , by creating a durable link with those undertakings, are intended t o contribute to the activities of the undertaking which holds tho se rights. The holding of part of the capital of another undertaki ng is presumed to constitute a particip ating interest where it exceed s twenty per cent of the said capit al. An interest in shares incl udes an interest which is convertible into an interest in shares and an option to acquire an interest in shares . Interests in shares held by subsidiary undertakings or held by third parties on behalf of t he company or its subsidiary undertakings shall be deemed to be he ld by the company; "prescribed" means prescribed b y regulations made or deemed to have been made under this Act, and where no regulation is in fo rce in respect of a matter which may or is to be prescribed, means determined, approved or allowed by the Minister; "principal office" means, in relation to an undertaking not hav ing a registered office, the office which, for the purposes of that undertaking serves the same or a similar purpose as the registe red office of a commercial partnership under this Act; "private company" mean s a private co mpany as defined in article 209; "prospectus" means any prospectus, notice, circular, advertisement or other invitation, offering to the public for subscription any shares or debentures of a company or other commercial p artnership; "Prospectus Regulation" means R egulation (EU) No. 2017/1129 of the European Parliament and of the Council of the 14 June 2017 on the prospectus to be published when securities are offered to the p ublic or admitted to trading on a regulated market, and repealing Direct ive 2003/71/EC, as may be amended from time to time, and includes a ny implementing measures, implemen ting technical standards, regula tory technical standards and similar me asures that have been, or may be issued thereunder; "public company" means a company which is not a private company; Cap. 281. "public-interest entities" means under-takings or entities as defined in article 2(1) of the Accountancy Profession Act ; "recognised jurisdiction" means: (a) a Member State; (b) an EEA State; (c) any country that is a member of the Organisation for Economic Co-operation and Development (OECD) established in 1961; (d) any country that is a signatory of the IOSCO Multilateral Memorandum of Understanding; or COMP ANIES [CAP. 386. 9 Cap. 345. (e) any other jurisdiction where the competent authority, as referred to in the Financial Markets Act , has a memorandum of understanding covering securities; "Registrar" means the person appo inted by the Minister pursuant to article 400; Cap. 345. "regulated market" means a regulated market as defined in the Financial Markets Act and includes a Malte se regulated market; "regulatory authority" means a body or bodies designated by a Member State other than Malta or an EEA State to carry out duti es provided for in the Prospectus Directive ; "resident", for the purp oses of this Act, means - (a) any natural person regardless of nationality who is ordinarily resident in Malta; (b) any body corporate established under the law of Malta; "security" includes a share, deb enture or any other similar instrument issued by a company or other commercial partnership: Provided that for the purpose of sub-article (3) of this article and of Chapter III of P art V and Part A of the Second Schedule of this Act, the definition of "security" does not inc lude money market instruments having a maturity of less than twelve months; "share" includes stock except where a distinction between stock and shares is expressed or implied; "shareholder" means a person ent ered in the register of members of a company pursuant to article 123; "small and medium-sized enterprises" or "SMEs" means companies which, according to their last annual or consolidated accounts, meet at least two of the following three criteria: an average number of employees, during the financial year, of less than 250, a total balance sheet n ot exceeding forty-three milli on euro (43,000,000) and an annual net turnover not exceeding fift y million euro (50,000,000); "system of interconnection of registers" means the system of interconnection of central, comme rcial and companies registers composed of the registers of Member States and EEA States, the European central platform, and the European e-Justice portal serving as the European elect ronic access point, in terms of Directive 2009/101/EC , as amended by Directive 2012/17/EU ; "third country" means a country that is not a Member State or a n EEA State; "true and fair v iew" refers - (a) in the case of individual accounts, to the requirements of article 167, and (b) in the case of consolidated accounts, to the requirements of article 171; "undertaking" means a body corporate or unincorporate which 10 CAP. 386.] COMP ANIES carries on a trade or business. (2) ( a) For the purposes of this Act "parent company" is a company which - (i) has a majority of the members’ voting rights in another undertaking (a subsidiary undertaking); or (ii) has the right to appoint or remove a majority of the members of the board of directors or persons entrusted with the administration of another undertaking (a subsidiary undertaking) and is at the same time a member o f that undertaking; or (iii) has the right to exercise a dominant influence over an undertaking (a subsidiary undertaking) pursuant to a contract entered into with that undertaking or to a provision in that undertaking’s memorandum or articles of association; or (iv) is a member of an undertaking and controls alone, pursuant to an agreement with other members of that undertaking (a subsidiary undertaking), a majority of members’ voting rights in that undertaking; or (v) holds a participating interest in another undertaking and has the power to exercise, or actually exercises a dominant influence over that undertaking (a subsidiary undertaking) or it manages the subsidiary undertaking on a unified basis together with it; and "parent undertaking" shall be construed accordingly and shall incl ude an undertaking which controls one or more subsidiary undertakings. (b) For the purposes of the definition in paragraph ( a), the provisions of the Ninth Schedule shall apply. (c) The term "subsidiary underta king" shall be construed in accordance with paragraph ( a) and shall include an undertaking controlled by a parent undertaking including any subsidiary undertaking of an ultimate parent undertaking. (d) References to shares of und ertakings in this Act shall include references to beneficial interests in undertakings where the capital of such undertakings is not divided into shares; and references to "relevant shares", "the issue of equity shares", "the issued share capital" and "the nominal value of the equity shares" shall be construed accordingly. (e) Other terms appropriate to companies shall be construed, in relation to an undertaking which is not a company, as references to the corresponding persons, officers, documents or organs, as the case may be, appropriate to undertaki ngs of that description. COMP ANIES [CAP. 386. 11 (3) ( a)( deleted bu Act V of 2020). (b) The following shall not constitute offers of securities made to the public: (i) an offer of securities made only to qualified investors; or (ii) an offer made to less than one hundred and fifty persons per Member State or EEA State, not including qualified investors; or (iii) an offer where the minimum consideration which may be paid by any person for securities acquired pursuant to the offer is at least one hundred thousand euro (100,000.00), for each separate offer; or (iv) an offer of securities where the nominal value of each security amounts to at least one hundred thousand euro (100,000.00), or the total c o n s i d e r a t i o n o f t h e o f f e r i n t h e E u r o p e a n U n i o n and the EEA shall not exceed one hundred thousand euro (100,000.00), which limit shall be calculated over a period of twelve months; or (v) Repealed by Act XVIII.2024. 2. (vi) an offer in respect o f non-equity securities issued in a continuous or repeated manner by credit institutions where the total consideration of the offer in the European Union and the EEA, over a period of twelve months is less than seventy five million euro (75,000,000), provided that these securities: (a) are not subordinated, convertible or exchangeable; and (b) do not give a right to subscribe to or acquire other types of securities and they are not linked to a derivative instrument: Provided that any subsequent resale of securities which were previously the subject of one or more of the types of offer mentioned in sub-paragraphs (i) to (iv) shall be regarded as a separate offer and the definition set out in paragraph (a) regarding an "offer of securities to the public" sh all apply for the purpose of deciding whether that resale is an offer of securities to the public. The placement of shares through financial intermediaries shall be subject to publication of a prospectus if none of the conditions mentioned in sub-paragraphs (i) to (iv) above ar e met for the final placement: Provided further that in the case of any such subsequent resale of securities or final placement of securities through financial intermediaries, it is not necessary to draw up another prospectus as long as a valid prospectus is available in accordance with paragraph 21 of Part A of 12 CAP. 386.] COMP ANIES the Second Schedule to this Act and the issuer or the person responsible for drawing up such a prospectus consents to its use by mean s of a written agreement: Provided further and withou t prejudice to Articles 1(4) and 4 of the Prospectus Regul ation, offers of securities to the public shall be exempt from the obligation to publish a prospectus, in accordance with Article 3(1) of the Prospectus Reg ulation as long as: (a) such offers are not subject to notification in accordance with Article 25 of the Prospectus Regulation; and (b) the total consideration of each such offer in the European Union and the EEA is less than a monetary amount calculated over a period of twelve (12) months which shall not exceed five million euro (€5,000,000): Provided further that in resp ect of offers mentioned in sub-paragraph (vi) and in th e third proviso, an offeror may draw up a prospectus in accordance with any applicable rules. (c) Where the offer is made by a commercial partnership, not being a company and wh ether formed or registered under this Act or any other Act, the provisions of this article shall apply to such offer mutatis mutandis . (d) The Minister may by Order published in the Gazette revise or amend any of the figures or amounts referred to in this article. Cap. 281. (4) For the purposes of this Act, "generally accepted accounting principles and pract ice" shall have the meaning assigned to it in the Accountancy Profession Act or regulations issued in terms thereof. (5) For the purposes of this Act , where a document required to be delivered to the Registrar for registration is required to s tate the name and residence or address of a person, it shall be deemed t o require further the official identification, by number or other wise of such person, as may be applicable. (6) For the purposes of this Act, where any document, which is required to be delivered or given to or served on the Registrar , is to be signed by an expert and such expert is a company, partnershi p or other body corporate, such docum ent shall carry the signature o f an individual who is a director, pa rtner or equivalent officer, as the case may be, duly authorised to sign on its behalf. (7) In this Act and in any regulations made thereunder, if there is any conflict between the English and Maltese texts, the Engl ish text shall prevail. COMP ANIES [CAP. 386. 13 References in other Acts. Amended by: IV . 2003.27.