The Merchant Shipping (Shipping organisations – Private Companies) Regulations (S.L. 234.42 of the Laws of Malta) (hereinafter referred to as “the Regulations”) have been recently amended by Legal Notice 31 of 2020.

In terms of these amendments, companies established under the Merchant Shipping Act (hereinafter referred to as “MSA”) are now obliged, as at end of financial year 2020, to submit audited financial statements to the Registrar of Companies, the requirements for which being almost identical to those of private limited liability companies established in terms of the Companies Act (hereinafter referred to as the “CA”). This includes the applicability of penalties as per the Eleventh Schedule of the CA in the eventuality of default. Submission must be made within 42 days from the end of the period for laying of annual accounts prescribed by Article 182 of the CA, that is, ten months after the end of the relevant accounting reference period.

The exemptions afforded to the CA companies, for example, in so far as the requirement of a directors’ report is concerned, apply also to MSA companies. The only exception relates to the thresholds as to what constitutes a ‘small company’ in terms of Article 185 of the CA. Such thresholds do not apply to MSA companies. Alternatively, a small (and hence exempt from the requirement to prepare a directors’ report) MSA company is one which does not exceed two of the below three thresholds, in terms of Regulation 64 of the amended Regulations:

• Balance sheet total € 6,000,000 (€ 4,000,000 for CA companies);

• Turnover of € 12,000,000 (€ 8,000,000 for CA companies);

• Not more than fifty employees.

Moreover, whilst the exemptions from the preparation of consolidated accounts in terms of the CA (now applicable to MSA Companies) shall apply to MSA companies in the same way, a parent company established under the MSA can qualify as a ‘small company’ in terms of the foregoing only if the group of which it is parent qualifies as a small group, that is, on a consolidation basis does not exceed the limits of two of the three following criteria:

• Aggregate balance sheet total: € 6,000,000 net or € 7,200,000 gross;

• Aggregate turnover:  € 12,000,000 net or € 14,400,000 gross.

All Articles of the CA in relation to the keeping of accounting records (and the content and form thereof), exemptions, disclosure requirements, directors’ report, audit reporting and laying of accounts before the general meeting, and submission of accounts, together with the accompanying liabilities and penalties, shall, other than the variations indicated in Regulation 64 above, be applicable to MSA companies.