Maltese law for companies derives from the English model. With the entrance of the country in the European Union `(2004), company law has incorporated the maltese community principles.
Malta has three main “Business Legislation”:
• Commercial Legislation;
• Services Legislation;
• Fiscal Legislation.
Maltese companies are regulated by the Companies Act 1995, save for those who register their boats under the Maltese flag, which are governed by the Merchant Shipping Act.
To be recognized and to carry out their activities, companies incorporated in Malta must be registered with the Registrar of Companies (Companies Register). All those wishing to operate in the commercial sector must have a certificate of registration (issued by the Registry of Companies).
The most common legal formats for business are:
…..
Sole Trader:
needs to register with Inland Revenue as self-employed. Unlike other business formats, sole traders can start trading straight away as long as the required permits and registration are carried out.
Liability: If business fails, the owner is fully responsible for the business debts.
Management: The owner is solely responsible for controlling the business. The owner’s word is final.
Finance: Normally, the owner’s personal money.
Profits: All profits go to the owner.
Taxes: Self Employed status. Even if the owner does not draw on the profits they are still taxed. Losses can be offset against tax on other income.
….
Partnership:
Partners need to register with the Inland Revenue as self employed.
Liability: If business fails, the owners are fully responsible for the businessdebts.
Management: The partners share responsibility for controlling the business.
Finance: Generally, the partners’ private funds provide the company’s finances.
Profits: All profits shared between the partners (as agreed within the ‘’Deed of Partnerships’’.
Taxes: Self Employed status. Even if the partners do not draw on the profits they are still taxed. Losses can be offset against tax on other income.
….
Private Limited Company:
a company cannot just start operating but needs to follow a predefined process of registration and set-up. A company is a legal entity in its own right.
Liability: The shareholders’ personal assets are protected if the business fails. The shareholders can only lose what they have put in the business.
Management: The business is controlled by The Board of Directors. Each director is held personally responsible for its management and must act in the company’s best interests.
Finance: Generally the shareholders’ private funds and/or bank facilities provide the company’s finances.
Profits: Dividends are paid to the shareholders.
Taxes: The company pays taxes on its profits. All employees and directors pay taxes on ncome earned through wages, salaries or other forms of remuneration.
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