Under the Maltese Company Law, the role of a Director is to oversee all aspects of the daily running of the company, together with exercising all functions and powers within the Directors Capacity that do not necessarily require a shareholders resolution at a meeting in general according to the articles of association (AoA) or the Companies Act. Directors have a fiduciary relationship towards the company and must act as a bonus paterfamilias. Directors are deemed to be agents and mandatories of the company.
Every public company must have at least two directors, whilst the memorandum and articles of association of a private company typically lay down the minimum and maximum number of directors that the company can appoint, with minimum being one.
Directors are appointed by the shareholders during a general meeting, for a period of time. A company can remove a director before their period of time in office has expired by passing an ordinary resolution at a general meeting of the company.
Any person who is 18 years of age or older, or minors who are 16 years of age and have been emancipated to trade, can be appointed as directors. There are no restrictions on the nationality and residence of the directors of a Maltese company.
Duties of loyalty, care and skill
The primary duty of a Director is to act bona fide in the interest of the company. Directors owe no duties to individual shareholders. The Director is also obliged to promote the well-being of the company and shall act in good faith and honesty in performing his/her duties in the company’s best interest, whilst the interest of the company and that of the director should never intersect.
A director shall exercise the diligence, skill and degree of care to which would be exercised by a person having the experience, skill and knowledge that may be expected of a person carrying out such functions.
The director shall not use any information, property or opportunity of the company for his or her own benefit, nor benefit in any way in connection with the exercise of their powers, unless with the company’s consent, therefore directors should not place themselves in positions that conflicts with their duties of the company, their own personal interest and interest of others.
Additional to these duties, directors shall also fulfill a number of administrative duties including duties relating to the keeping of statutory registers and minute books and duties relating to the filing of returns and documents. There are also duties relating to the board and general meetings, as well as the duties relating to record keeping and financial statements, such as the keeping of mandatory trade books, the profit and loss account and the balance sheet.
These duties are laid out in Article 136A of the Companies Act, and have a ‘fiduciary’ character.
Liabilities of the Directors
In general, the personal liability of the directors for breach of duty is joint and several. This is because directors are meant to act collectively as a board and the corresponding liability for any breach of duty shall be bourne in solidum.
There are exceptions to this rule, in particular when a duty is entrusted to one or more of the directors only. Moreover, a director shall not be liable for the acts of the co-directors if he or she can prove that he was unaware of the breach at the time of occurrence and on becoming aware he signified his dissent in writing; or otherwise knowing that a co-director is planning a breach of duty, he or she takes all reasonable steps to prevent it.
Directors as Fiduciaries of the Company
Directors under the Maltese Company Law are also conserved to be fiduciaries of the company. As such, directors are bound by the fiduciary duties highlighted in Article 1124A of the Civil Code. Such duties mentioned are the following.
1. A number of administrative duties, which include;
- The duty to return on demand any property held under fiduciary obligations to the person lawfully entitled thereto or as instructed by him or as otherwise required by applicable law;
- The duty to render account in relation to the property subject to such fiduciary obligations,
- The duty to keep any property acquired or held by him in lieu of his position as fiduciary segregated from his personal property.
2. The duty of care, more specifically the duty to exercise the diligence of a bonus paterfamilias in the performance of his obligations,
3. The duty of loyalty.
Other Responsibilities of the Company Director
- Liaison with local authorities
- Ensuring that the Malta Company operates in line with Maltese law
- Ensuring that the Malta Company operates in line with regulatory norms
- Procuring secretarial, legal and accounting services in Malta for the company
Besides Malta company formation services, Döhle Malta provides resident directorship and professional management services for companies under its administration. We also provide professional Company Secretarial and support services to companies under its general administration, ensuring on-going compliance with the Maltese Companies Act.
Döhle Malta is a fully licensed Corporate Service Provider (CSP383) and provides professional services to corporate & private clients. Our highly qualified team is on hand to carry out comprehensive administration services to all our clients. In many cases we provide a fixed fee for our clients so that there are no hidden surprises and our clients know exactly where they stand. Döhle Malta provides a service dedicated to professionals who value the human touch and personal contact. Our expertise aims to make the process as effortless as possible.