MALTA: Amendments to the Beneficial Owner Register Rules

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Malta Legal Notice 247 of 2020 has brought about the following amendments to the Companies Act (Register of Beneficial Owners) Regulations (“Regulation”):

Supporting Documents

The initial form submitted to the MBR under Regulation 3 must be accompanied by a true certified identification document of the beneficial owner/s.

Any form submitted to the MBR regarding a change in beneficial owners under Regulation 6 must also be accompanied by true certified identification documents on every beneficial owners.

Annual UBO Return

New Regulation 6A requires a company to submit annually, within 42 days from the anniversary of the company’s registration, a return concerning the updated information on the beneficial owners. The information to be updated by the Annual Return concerns the name, residence or ID document details of the beneficial owner. If there are no changes to the details of the beneficial owners then the company must simply tick the box in the Annual Return stating that there have been no changes to the details currently held with the Registry.

Any change in beneficial owner, however, remains to be regulated by Regulation 6.

The new Annual UBO Return forms are required to be utilised as from the 1st July 2020.

Change in senior management officials

A change in senior management official must be reported to the MBR within 14 days from the date the change is recorded with the company using the new form provided in the First Schedule to the Regulations.

Spontaneous disclosure

A company may update the Registry with a change in name, residence or ID document information of a beneficial owner throughout the year at its own discretion. A specific form has now been provided by the Regulation for this submission. The changes must be submitted with a true certified ID document of the beneficial owner.

Powers of the Registry

Should a company not comply with the requirements set forth under the Regulations, as amended by Legal Notice 247 of 2020, that company risks any of the below actions being taken by the Registrar:

The refusal to register any documents of the company;

The restriction of the incorporation of new company, where a proposed director for the new company is involved in other Maltese companies that have failed to submit information on the beneficial owners;

  • The carrying out of an on-site inspection  by the Registrar

The Registrar may request a company to provide further information and documentation to verify the accuracy of the data on the beneficial owners. This power is completely at the discretion of the Registrar as to the extent of what may required.

If the Registrar concludes, after its searches, that there existed an inaccuracy of data in respect to the beneficial owner register every officer of the company shall be liable for a fine not exceeding €100,000. It is important to note that under the Companies Act an officer of the company includes the directors, senior management and the secretary of the company.

Strike off and loss of assets

Where any company fails to provide information on the beneficial owners under the these Regulations, the Registrar is bound to inform the company.

The company has 1 month to accede to the request of the Registrar. Non-compliance will have dire consequences. The Registrar, at its discretion, may proceed with the strike off of the company by publishing a notice stating that on the lapse of 3 months from the date of that publication the company shall be struck off the register and the assets of the company shall devolve onto the Government of Malta.

The strike off of the company can be contested within the 3 month period. Further to a contestation the Registrar will not proceed to strike off the company should it be satisfied that there are no longer sufficient ground to proceed.

Importantly Regulation 9 of the Regulations, which provides these powers to the Registrar, does not specify which grievances under the Regulation will lead to the striking off of the company, it merely states ‘where a company fails to provide information on its beneficial owners in accordance with these regulations’. This definition potentially includes any request for information that is not complied with by the company.

Recourse shall lie to any aggrieved member, creditor or other interested party of the company that has been struck off to apply before the court have the company restored to the register. This action is prescribed by 5 years from the date of the striking off of the company.

Notwithstanding all the above the Registrar has the power ipso jure to strike off any name of a company should the beneficial owner of such company become sanctioned by an international organisation.

 

This article is only intended to give a general overview of the legislation. Professional advice should be separately sought on the applicability of these rules to any actual company structure or situation.

Please contact Dr Alexandra Marinelli, DM Europe, should you wish to discuss any matter relating to Companies registered in Malta.

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