An analysis of the single-member company provisions in the Companies Act, 1995

Abstract

Quintessentially, this thesis is an analysis of the provisions in the Maltese Companies Act, 1995 which deal with single member companies. The concept of a limited liability company having one shareholder is somewhat revolutionary, both in Maltese and Continental law, in that, up to very recent times, a limited liability company was always deemed to be constituted by at least two shareholders since the Memorandum of Association was deemed to be a contract between the shareholders. For instance, our Commercial Partnerships Ordinance, 1962, in s. 150( d ), expressly declared that a company is dissolved if the number of shareholders is reduced below two and remains so reduced for more than six months. The main source and thrust behind the legislative intervention introducing the concept of single member limited liability companies in European countries, and in so in Malta, is the European Union's Twelfth Company Law Directive of 1989. This thesis, apart from viewing the main sources of the Maltese provisions dealing with companies having a sole shareholder, will compare, as extensively as possible, and analyse the provisions dealing with this subject under various foreign legal systems, notably the English, Italian and French regimes Obviously. in comparing the provisions under the Maltese Companies Act of 1995 with other legal systems, we will be analysing the Maltese provisions dealing with single member companies, which can be termed as presenting us with a living contradiction--- though few in number, they constitute a radical transformation of the local scenario with regard to company law.