By virtue of the legal notice 31 of 2020 Merchant Shipping (Shipping Organisations – Private Companies) Regulations (the “Regulations”), amendments have been made to the respective domestic law regulating shipping organisations.
Please find hereunder a list with the amendments which are of significant importance:
- In accordance with the said amendments, shipping companies are obliged to prepare and file financial statements starting from financial year 2020, which should be filed within the periods required for a company incorporated in terms of the Companies Act, Chapter 386 of the Laws of Malta (the “Companies Act”). Should a shipping company proceed to file financial statements pertaining to previous years to the Registrar of Companies, the said financial statements will still be uploaded on the Malta Business Registry’s website, however they would be classified as unregistered documents.
- Shipping companies which are incorporated before the 21 February 2020, if the year-end is not December, they are requested to file the financial statements within the stipulated times from the year end. On the other hand, Merchant shipping companies which are incorporated after 21 February 2020 wherein the year end of such company is not December, the company is required to file a notice of accounting periods with the Malta Business Registry.
- The amendments cater for small companies, and the exemptions applicable under Companies Act should also apply for Merchant Shipping Companies. The provisions of the Companies Act in relation to the content and timeframes should apply. Nevertheless, a company incorporated under the Merchant Shipping Act may be exempt from certain requirements in the event that the said shipping company falls within the threshold of a small exempt company in terms of the amendments and the Companies Act regulations. Small companies rules for parent companies should also apply.
- It is essential to note that the penalties, as have been amended, will be imposed and become applicable to shipping companies registered in terms of the Merchant Shipping Act, as from 1st April 2020. e.g. failure of failing an annual return should incur a penalty of €2,500 one off fee and a daily fee of €50. It is our understanding that the Malta Business Registry shall be strictly adhering to the imposition of fines moving forward.
- Prior to the recent amendments, a shipping company incorporated in another jurisdiction which intended to be continued in Malta was required to go through a lengthy process. The foreign shipping company would have first been required to go through the process of continuation in accordance with the respective regulations in terms of the Companies Act, Following completion of such process, the directors of the company would have then proceeded to make the required amendments in order to be treated as a shipping organisation by electing for the company to be regulated by the Merchant Shipping Act by means of the appropriate declaration in the memorandum of association of the company.
- However, through the introduction of these Amendments, foreign shipping companies have been provided with their own specific rules to cater for this scenario which provides for a smoother transition of foreign companies wishing to continue in Malta, or on the inverse, Malta shipping companies wishing to continue in another jurisdiction. Fees, which are to be imposed upon the continuation of such companies, whether inbound and outbound, and publication fees shall be applicable as from 1 April 2020.
- Subject to the Amendments Merchant Shipping Companies may appoint a company secretary.
The information provided does not, and is not intended to, constitute legal advice but it is provided for general informational purposes only.
