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Malta introduces Shipping and Aviation Cell Companies Regulations

Deloitte Malta company law alert

19 June 2020

Malta has introduced new regulations, the Companies Act (Shipping and Aviation Cell Companies) Regulations, into Maltese law on 16 June 2020, by virtue of Legal Notice 248 of 2020 (the “Regulations”).

The scope of the Regulations is to create and regulate a new structure to be used by companies carrying out “shipping or aviation business” as defined in terms of Article 84E(b) of the Companies Act, which shall include:

  • The ownership, operation (under charter, lease, or otherwise), administration and management (including personnel engagement, employment or management whether on board or otherwise) of a ship, aircraft, or aircraft engine, and the carrying on of all ancillary financial, security, commercial and other activities in connection therewith; or
  • The holding of shares, directly or indirectly as a parent company, in an undertaking established mainly to carry out the activities referred to above; or
  • The raising of capital through loans, the issue of guarantees, or the issue of securities by an undertaking, wherein the purpose thereof is for the carrying out of the activities referred to above; or
  • The carrying on of other objects or activities within the maritime or aviation sectors which the Minister may, from time to time, prescribe by regulations.

The name of a cell company which is formed or constituted (or converted from an existing company) for the purpose of conducting shipping or aviation business shall by necessity include the expression “Mobile Assets Protected Cell Company”, or “MAPCC” (hereinafter referred to as an “MAPCC”).

Each cell of the MAPCC should be assigned its own distinct name or designation, and the registration of such cell shall be subject to the decision or resolution approving the creation thereof, together with the necessary instruments giving effect to such decision or resolution, being delivered to the Malta Business Registry for registration. An MAPCC cell created in this manner shall not constitute a separate and distinct legal person, but may be used to effectively segregate and protect the cellular assets of the MAPCC.

It is an essential requirement that directors of an MAPCC maintain a clear, constant, and identifiable distinction between its cellular assets – i.e. those assets which have been attributed to a specific MAPCC cell – and its non-cellular assets. In doing so, the directors shall be required to maintain separate records, accounts, statements, and other documents as may be necessary in order to maintain a clear distinction between the assets and liabilities of each unique MAPCC cell, as well as from the MAPCC’s non-cellular assets. Furthermore, the MAPCC is obliged to inform third parties that they are dealing with a cell company.

Cell shares may be issued by the MAPCC in respect of any of its cells, with the proceeds of those issued cell shares constituting cell share capital, which shall comprise cellular assets attributable to the issuing MAPCC cell.

In this respect, a cell company may issue cellular dividends by reference to the cellular assets and liabilities or the profits attributable to that particular cell. When determining whether or not profits are available for the purpose of issuing a cellular dividend, no account shall be taken of the financial position of any other cell of the relevant MAPCC, or of the MAPCC’s non-cellular assets.

Furthermore, where any liability arises which is attributable to a specific MAPCC cell, only the cellular assets attributable to that cell may be used to satisfy that liability.

Moreover, an MAPCC and its cells shall comply with the provisions of the Companies Act (Register of Beneficial Owners) Regulations which shall be applicable mutatis mutandis to cell companies and their cells.

 

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