The Maltese Government has released the Companies Act (Shipping and Aviation Cell Companies) Regulations (Legal Notice 248 of 2020) allowing shipping and aviation companies to create new corporate structures by means of cell companies. A cell company is always be deemed to be a single legal person and the creation of a cell by a cell company does not create (in respect of that cell) a legal person separate from the company.
Typically, the assets of a cell company are either cellular assets or non-cellular assets. The assets attributable to a cell of a cell company comprise assets represented by the proceeds of cell share capital and reserves attributable to the cell and all other assets attributable to the cell.
Cell companies and their cells are also required to comply with the provisions of Companies Act (Register of Beneficial Owners) Regulations.
Some Advantages of Cell Companies
- The assets and liabilities of each individual Cell are a distinct patrimony and therefore they considered separate from the core Cell Company and from other individual Cells. This allows for the structuring and ring-fencing of each Cell.
- A creditor of one particular Cell only has recourse to the assets of that particular Cell and not the remaining Cells or the core Cell Company.
- It is relatively quick for new Cells to be set up and begin operations once the Cell Company is established.
- There is one board of directors and one set of Memorandum and Articles of Association for the Cell Company and all its Cells.
- One operative license is required for an entire Cell Company even though it has individual Cells.
- The insolvency of one particular Cell has no impact on the remaining Cells or the Cell Company.
- Individual Cells are easier and quicker to close down than a regular Company.
- Cell Companies and their Cells benefit from Malta’s tax imputation system.
News item written by Dr Sean Xerri de Caro.
Disclaimer: This article is not intended to impart legal advice and readers are asked to seek verification of statements made before acting on them.