The Role of a Company Secretary Under Maltese Company Law

The role of a company secretary in Malta plays a crucial part in ensuring that companies comply with legal, regulatory, and governance standards. This role has evolved over time, and the introduction of the Companies Act has brought about significant changes in its requirements.

Brief History of the Role of a Company Secretary Before the Introduction of the Companies Act

Before the enactment of the Companies Act, Chapter 386 of the Laws of Malta the role of a company secretary in Malta was not as clearly defined as it is today. Traditionally, the role was mostly administrative, with the company secretary responsible for managing the company’s formal documents, such as the minutes of board meetings, statutory registers, and filing returns with the authorities. The duties were often handled by company directors themselves or by an external consultant who had a minimal legal obligation toward the company.

However, with the introduction of the Companies Act, which was first enacted in 1995 and later revised in 2001, the role of the company secretary became more structured and regulated. The law defined the company secretary’s duties more explicitly and emphasized the importance of ensuring compliance with legal obligations. The Act introduced new requisites for company secretaries, including their qualifications, responsibilities, and the need for proper record-keeping. It also established the secretary’s role as a key figure in ensuring that companies adhere to the legal framework for corporate governance, financial reporting, and general corporate compliance.

Requisites of a Company Secretary

Under Maltese company law, a company secretary can be either an individual or a body corporate. The requisites for a company secretary are outlined in the Companies Act, which requires that the person appointed must be suitably qualified to carry out the duties effectively. While there is no mandatory certification or specific educational requirements, the role does demand a comprehensive understanding of company law, corporate governance, and regulatory frameworks. Specifically, the company secretary must possess knowledge of the legal and regulatory framework that governs the company’s operations, and the individual must be able to perform administrative tasks that ensure the company’s legal compliance.

For individuals, the role of company secretary is typically suited to professionals with expertise in corporate governance, law, or finance and such an individual must also be at least 18 years old and have no legal disqualifications preventing them from serving in this capacity.

In the case of a body corporate, a company secretary may be a corporate services provider (CSP) or any other corporate entity that is authorized to provide such services. These entities must be regulated and authorized by the Malta Financial Services Authority (MFSA) or a relevant licensing body. A CSP that serves as a company secretary will usually offer a full suite of administrative services, including company formation, statutory filings, and governance advice.

How a CSP Can Take on the Role of a Company Secretary

A CSP can take on the role of a company secretary, provided it meets all the necessary regulatory requirements. CSPs are typically licensed by the Malta Financial Services Authority (MFSA) and are well-equipped to handle corporate governance and compliance functions for businesses. A CSP that acts as a company secretary can perform various tasks, including maintaining statutory registers, filing annual returns, preparing minutes of board meetings, and ensuring that the company adheres to the requirements set out in the Companies Act and other applicable regulations.

Many companies, especially those in the financial or international sector, choose to appoint a CSP as their company secretary because of the expertise and experience these providers bring in managing compliance and governance duties. This is particularly beneficial for international companies or those operating in multiple jurisdictions, where a CSP’s knowledge of local and international regulations is invaluable.

Disqualification of a Sole Director as Company Secretary

Under Maltese company law, a sole director of a company is not permitted to also serve as the company secretary of the same company, with the exception of an exempt company. This provision is designed to enhance corporate governance and accountability by ensuring that the duties of governance (which the director is responsible for) are distinct from the administrative and compliance duties (which the company secretary oversees).

An exempt company, as defined under the Companies Act, is a company that meets certain criteria and is exempt from specific regulatory provisions, including the restriction on having a sole director as company secretary. This exception is typically applied to smaller or closely-held companies where the director and the secretary may be the same individual without violating corporate governance principles.

Disqualifications for Serving as Company Secretary Under the Maltese Companies Act

Article 142 of the Companies Act outlines specific criteria under which a person is disqualified from serving as a company secretary. These disqualifications are intended to ensure that individuals holding the position of company secretary are fit to perform the role in line with legal and regulatory standards. The four disqualifications are as follows:

a)      Interdicted or Incapacitated Persons: A person who is legally incapacitated, interdicted, or an undischarged bankrupt.

b)     Conviction for Serious Offenses: A person convicted of:

Money laundering or related crimes (including terrorist financing).
Crimes affecting public trust, such as theft or fraud.
Knowingly receiving stolen property.

c)      Minor: A minor who has not been emancipated for trade.

d)     Disqualification Order: A person subject to a disqualification order with specific disqualification periods based on the severity of the crime:

Life imprisonment: In perpetuity.
Imprisonment between 25–30 years: 15 years.
Imprisonment between 10–25 years: 10 years.
Imprisonment between 5–10 years: 8 years.
Imprisonment between 4–5 years: 5 years.
Imprisonment for less than 4 years: 3 years.
In all cases, the disqualification period will not be shorter than the term of imprisonment.

e)      Unauthorized Company Service Provider: A person holding the office of company secretary or acting as a company service provider under the Company Service Providers Act, Chapter 529 of the Laws of Malta, without the necessary authorization from the Malta Financial Services Authority (MFSA).

Submission of Form K: A Key Requirement for Changes in Company Details

In Malta, it is a legal requirement for the company secretary to submit a Form K to the Malta Business Registry (MBR) whenever there is a change in the company’s directors, company secretary, or legal or judicial representatives. This form ensures that the official records maintained by the MBR are updated and reflect any changes in the corporate governance structure of the company.

Form K must be submitted within 14 days of any such change and must include the relevant details of the new directors, company secretary, or representatives, such as their names, identification numbers, and other relevant personal information. This filing is crucial for maintaining the accuracy and transparency of company records and for ensuring compliance with the legal requirements under the Companies Act.

The timely submission of a Form K is not just a statutory requirement, but also a measure of good governance. Failure to submit the form within the stipulated time frame can lead to penalties and may result in the company being flagged for non-compliance by the authorities. Thus, the company secretary plays a critical role in ensuring that all changes to the company’s structure are properly documented and filed with the MBR in a timely manner.

Vaia Legal: Your Trusted Company Secretary Partner

Vaia Legal holds a CSP license, allowing us to offer a comprehensive range of corporate services, including acting as your company secretary. With our expertise in Maltese company law and corporate governance, we ensure that your company remains fully compliant with legal and regulatory obligations. Whether you are starting a new company, need assistance with maintaining statutory records, or require advice on corporate governance, Vaia Legal is here to provide reliable and professional support.

For businesses seeking a trusted partner to handle their company secretary role, Vaia Legal is ready to assist. Our team of experienced professionals ensures that all requirements are met, and we take pride in offering personalized services tailored to your company’s needs. If you’re interested in appointing Vaia Legal as your company secretary, contact us today on info@vaialegal.com to discuss how we can support your business’s growth and legal compliance.