The Registrar of Companies (‘the Registrar’) is the person responsible for recovering penalties due under the Companies Act (Chapter 386 of the Laws of Malta) (the ‘Act’) in accordance with the provisions of Article 401 (3) to (17). In this regard, the Registrar’s power is delegated to the officers forming part of the Legal and Enforcement Unit within the Malta Business Registry (MBR) to handle enforcement of penalties from defaults under the Act.
The Act imposes on every officer of a company certain continuing obligations vis-à-vis the company. In terms of the Act, any reference to an “officer” in relation to a company includes a director, manager or company secretary, but does not include an auditor. Therefore, companies should comply with the provisions set out in the Act and satisfy the requirement to file statutory documentation.
The Act contains all the notifications that companies must submit within the stipulated time periods for registration by the Registrar. Failure to submit such notifications will render the company, together with its officers, liable to penalties. A list of all penalties can be found in the Eleventh Schedule attached to the Act. The table in this schedule indicates the provisions of the Act wherein offences are specified, a description of the provision breached, the maximum fixed penalty amount and the maximum daily penalty which may be imposed.
The obligations imposed on a company and its officers are various. Therefore, it is fundamental that at least one of the company’s officers is familiar with Maltese legislation so that they will be able to ensure that the company meets all obligations. The most basic obligations are the company’s annual filings, which can also be submitted online.
Of particular importance is the annual return, which must be submitted within forty-two days from the company’s anniversary date of incorporation. The company must also submit for registration, the annual accounts which are to be approved within ten months after the end of the relevant accounting reference period and are to be submitted within forty-two days from the date of approval of the accounts.
Additionally, companies have the obligation to disclose the information relating to the beneficial ownership of the company in accordance with the Companies Act (Register of Beneficial Owners) Regulations. The company’s officers must allow sufficient time to ensure that such notifications reach the Registrar within the prescribed time. In this regard, companies are encouraged to provide the Registrar with the email address of the company’s officers so that the MBR’s system will send them notifications when accounts and annual returns are due.
The Registrar is legally bound to send a notice in writing. The penalty notice will show the details of the penalty imposed against the company, including the nature of the infringement, the amount due by way of penalty in respect of such infringement and the officer to whom the notice is given. Moreover, it is also advised on the penalty notice that daily penalties will continue to be incurred until such notification is filed. Therefore, it is in the company’s interest to settle all penalties as soon as possible to avoid incurring unnecessary costs. It should also be noted that a company shall be jointly and severally liable with its officers to pay any administrative penalties imposed under this Act.
Failure to pay the late filing penalties will result in enforcement proceedings. Therefore, when the company and its officers ignore such penalty notices, the Legal and Enforcement Unit officers will issue a first, second or final warning, as the case may be, soliciting the company’s officers to update the company’s matters and pay the outstanding penalties. In the final warning which is sent by post to the address of the director or company secretary, it is clearly stated that the company will be given seven days within which to settle all outstanding penalties, on the lapse of which the Registrar will proceed judicially against the company and its officers.
On the lapse of such period, the lawyers within the Legal and Enforcement Unit will proceed to draft a judicial letter to be filed in the First Hall Civil Court (Commercial Section) to be served upon both the company and any officer of the company. who will need to file an application within thirty days in order to rebut the Registrar’s claims. The judicial letter itself will contain an intimation stating that failure to file a reply will render the judicial letter an executive title in terms of the Code of Organisation and Civil Procedure (Chapter 12 of the Laws of Malta). If the company fails to take the necessary actions as prescribed by law, the Registrar will acquire executive title and be able to file warrants in the Court Registry in order to recoup the amounts due.
The penalties and judicial acts are served to the address provided by the company’s officers. In relation to EU citizens, EU Regulation 1393/2007 lays down the procedure applicable to civil and commercial matters where a judicial or extrajudicial document must be transmitted from one member state to another for service. Regarding the service of judicial acts outside the European Union, this is done by virtue of the procedure laid down in the Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters, more commonly called the Hague Service Convention.
Action by the Registrar for the recovery of a penalty under the Act shall be prescribed by the lapse of five years from the day on which the default occurs.