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Setting up a Setting up a CompanyCompany
Dr. Michelle BuontempoDr. Michelle Buontempo
Malta Financial Services Malta Financial Services AuthorityAuthority
Malta Financial Services Malta Financial Services AuthorityAuthority
licensing authority and regulator licensing authority and regulator of:of:
• investment servicesinvestment services• insurance businessinsurance business• bankingbanking
place where all companies are place where all companies are registeredregistered
29th September 2004 Michelle Buontempo, MFSA
Powers of a regulatorPowers of a regulator
to licence operatorsto licence operators
to supervise operatorsto supervise operators
investigate complaintsinvestigate complaints
withdraw or suspend licenceswithdraw or suspend licences
2929thth September 2004 September 2004 Michelle Buontempo, MFSAMichelle Buontempo, MFSA
MFSA is the place where all MFSA is the place where all companies are registered – to be companies are registered – to be validly set up a company must be validly set up a company must be registeredregistered
Regular duties of companies Regular duties of companies
Info about companies accessible Info about companies accessible through MFSAthrough MFSA
29th September 2004 Michelle Buontempo, MFSA
What is a limited liability What is a limited liability company?company?
A company is a means by which a group of A company is a means by which a group of people, sharing a common objective, pool in people, sharing a common objective, pool in their resources and create a new entity their resources and create a new entity through which they intend doing businessthrough which they intend doing business
A company can be set up for various reasons A company can be set up for various reasons – from operating a shop to dealing in – from operating a shop to dealing in immovable propertyimmovable property
A company is a legal entity distinct from that A company is a legal entity distinct from that of its members – enjoying rights and subject of its members – enjoying rights and subject to dutiesto duties
29th September 2004 Michelle Buontempo, MFSA
A company is often described as an “artificial person” in contrast with a human being, a “natural person”
What is a limited liability What is a limited liability company?company?
A company is a means by which a group of A company is a means by which a group of people, sharing a common objective, pool in people, sharing a common objective, pool in their resources and create a new entity through their resources and create a new entity through which they intend doing businesswhich they intend doing business
A company can be set up for various reasons – A company can be set up for various reasons – from operating a shop to dealing in immovable from operating a shop to dealing in immovable propertyproperty
A company is a legal entity distinct from that of A company is a legal entity distinct from that of its members – enjoying rights and subject to its members – enjoying rights and subject to dutiesduties“A company has no soul to be saved or body to be kicked”
Advantages of setting up a Advantages of setting up a companycompany
Limited liability of shareholdersLimited liability of shareholders• the shareholders are not liable for its debtsthe shareholders are not liable for its debts• Creditors may only be paid out of the property Creditors may only be paid out of the property
of the companyof the company
Company provides certain continuity: shareholders Company provides certain continuity: shareholders may come and go but a company can go on for may come and go but a company can go on for ever. ever. During the II World War all the shareholders During the II World War all the shareholders of a private company while in a general meeting of a private company while in a general meeting were killed by a bomb. But the company survived were killed by a bomb. But the company survived
Transferable sharesTransferable shares• A shareholder can easily transfer his interest in A shareholder can easily transfer his interest in
a company to another investora company to another investor
29th September 2004 Michelle Buontempo, MFSA
Structure of a companyStructure of a company
ShareholderShareholder:: Person who invests Person who invests money in a company - in return he money in a company - in return he obtains sharesobtains shares
• shareholders have the power to shareholders have the power to appoint and remove directors appoint and remove directors
• shareholders of a private company: shareholders of a private company: may have 1 to 50 shareholdersmay have 1 to 50 shareholders
29th September 2004 Michelle Buontempo, MFSA
Structure of a companyStructure of a company DirectorDirector:: Person who is responsible for the Person who is responsible for the
management of the company on a day-to-day management of the company on a day-to-day basisbasis
• appointed by the shareholders appointed by the shareholders
• a private company may have any number of a private company may have any number of directorsdirectors
• anyone can be a director of a company anyone can be a director of a company except minors or interdicted or incapacitated except minors or interdicted or incapacitated personspersons
29th September 2004
Michelle Buontempo, MFSA
Structure of a company Structure of a company CompanyCompany SecretarySecretary:: has an administrative role in has an administrative role in
the company. the company.
• this person is responsible for filing of documents this person is responsible for filing of documents with the MFSAwith the MFSA
• appointed by the directors of the companyappointed by the directors of the company
RepresentativeRepresentative:: any person who may represent any person who may represent the companythe company
29th September 2004 Michelle Buontempo, MFSA
In most cases the shareholders, directors, representative and company secretary are one and the same person
Steps required to set up a Steps required to set up a companycompany
Idea
Find shareholders
Agree on certain matters
name ofco.
activities ofthe co.
directors secretarylegal/judicial representative
29th September 2004 Michelle Buontempo, MFSA
Registration ProcedureRegistration Procedure Once this information is compiled, one can Once this information is compiled, one can
complete the document required to formally complete the document required to formally register the company i.e. the Memorandum register the company i.e. the Memorandum & Articles of Association (M&A)& Articles of Association (M&A)
Signed by the shareholders and delivered to Signed by the shareholders and delivered to the MFSA for registration the MFSA for registration
Registration fee of Lm150 to Lm750, Registration fee of Lm150 to Lm750, depending on the capital of the companydepending on the capital of the company
Time required to register the company may Time required to register the company may be as little as 24 hoursbe as little as 24 hours
29th September 2004 Michelle Buontempo, MFSA
Ongoing DutiesOngoing Duties
Incorporation of a company brings with it Incorporation of a company brings with it certain formalities, publicity and expensecertain formalities, publicity and expense
Every year directors of the company must Every year directors of the company must file with MFSA the financial statements file with MFSA the financial statements which are accessible to the public which are accessible to the public
Every year an annual registration fee of Every year an annual registration fee of Lm70 to Lm420 depending on the capital of Lm70 to Lm420 depending on the capital of the companythe company
This is the price to pay for limited liabilityThis is the price to pay for limited liability
29th September 2004
Michelle Buontempo, MFSA
Q: What do you need to open a Q: What do you need to open a company?company?
A: A LawyerA: A Lawyer