XI of 2017 – Companies (Amendment) Act, 2017
On the 21st of March, Act no XI of 2017 to amend the Companies Act was published. This Act speaks about the removal and prohibition of share warrants to bearer in all types of Maltese companies as well as enhancing the company reconstruction process. This article shall focus on prohibition of share warrants to bearers.
Although bearer shares are prohibited in Malta and it was not possible for private limited liability companies to issue share warrants to bearers, the Companies Act still allowed for bearer shares to be issued by public companies with respect to any shares which were fully paid up, if this was authorised by its Memorandum and Articles of Association.
Article 121 has been amended to outline that:
“No company may issue a share warrant to bearer notwithstanding anything contained in its memorandum and articles of association”.
Further to this, there is also the addition of a new article, article 121A, which outlines a transitionary period of nine months within which the holder of a share warrant shall, before the expiration of 9 months from the coming into force of the amending act, surrender the share warrant to the company which had previously issued it.
Article 121A (2) further states that upon the surrender of a share warrant, the company shall:
- Cancel any share warrant issued by it;
- Enter in its register of members the name of the persons requesting that their names and addresses be entered in the register of members in lieu of share warrants surrendered and in this regard the provisions of article 123(1)(a), (1)(b) and (2) shall apply; and
- Notify the Registrar of any changes in the register of members made consequently to that provided in sub article (1) and paragraphs (a) and (b)
Article 121A(3) states that any share warrant which is not surrendered to the issuing company as aforesaid by the end of the nine month transitionary period mentioned in sub article (1) shall no longer be recognised by the company and such share warrants shall be deemed to have been cancelled.
The definition of a shareholder has also been amended to exclude the phrase “or the bona fide holder of a share warrant referred to in article 121”.
The amending act further removes all references to share warrants to bearer in the Act, including the amendment to regulation 2 of Part II of the First Schedule to the Act.