Cap. 565 Art. 3Conditions for registration as a family business. Listed companies. Limited liability companies. Registered partnerships. Trusts. Other registered forms of a family business. Cap. 16. Other business. Indirectacquisition of a family business.

In KraftAmtlicher Text

(1) A family business that can qualify for registration under this Act shall mean any business established in Malta whereby:

(a) in the case of a public limited liability company whose shares are listed on a regulated market or traded on a multilateral trading facility, the majority of the shares including the rights are held, whether directly or indirectly, by at least two owners who are family members within the same family;

(b) in the case of a limited liability company constituted in a manner other than that referred to in paragraph (a):

(i) all the shares of the company are held, directly or indirectly, by at least two owners who are family members within the same family; and

(ii) at least one family member is formally involved in the general governance, its proper administration and management of the company: Provided that shares held directly or indirectly by individuals who are not family members shall be disregarded for the purposes of this paragraph if their aggregate issued value does not exceed five per cent of the issued share capital of the company: disregarded for the purposes of this paragraph if their aggregate issued value does not exceed ten percent of the issued share capital of the company: Provided further that where any business assets are held on lease, the family members are the majority of the lessees in the lease agreement;

(i) the full capital contribution to the partnership shall have been made, directly or indirectly, by at least two owners who are family members within the same family having, directly or indirectly, the right to receive the majority of distributable profits; and

(ii) at least one of whom holds the majority of the decision making rights: Provided that capital contributions made, directly or indirectly, by persons who are not family members shall be disregarded for the purposes of this paragraph if their aggregate contribution does not exceed five per cent of the total contribution made by all partners in the partnership: Provided further that capital contribution made, directly or indirectly, by employees who have been in continuous full-time employment within the family business for over three years and who are not family members shall be disregarded for the purposes of this paragraph if their aggregate contribution does not exceed ten percent of the capital contribution of the partnership: Provided further that where any business assets are held on lease, the family members are the majority of the lessees in the lease agreement;

(d) in the case of a family business where all the shares or the interest are being held by a trustee under trust for the benefit of members of a family as beneficiaries, and which has been established by a written instrument and all the beneficiaries are owners and family members within the same family: Provided that other beneficiaries who are not family members within the same family business trust shall be disregarded for the purposes of this paragraph if they do not in aggregate benefit from more than five per cent of the family business, or if they are only residual beneficiaries who will benefit from the trust only upon termination of the trust due to the fact that there are no existing family members within the same family employment within the same family business trust for over three years and who are not family members within the same family shall be disregarded for the purposes of this paragraph if they do not in aggregate benefit from more than ten per cent of the family business trust, or if they are only residual beneficiaries who will benefit from the trust only upon termination of the trust due to the fact that there are no existing family members within the same family capable of benefiting from the trust at any relevant point in time: Provided further that where any business assets are held on lease by the trustee, the trustee is the majority of the lessees in the lease agreement;

(e) in the case of a business carried out by family members in a form of partnership other than as indicated in paragraph (c), the business and the assets of such business are owned and controlled, directly or indirectly, by at least two owners who are family members within the same family: Provided that other assets held by individuals who are not family members shall be disregarded for the purposes of this paragraph if their aggregate value does not exceed five per cent of the net assets of the family business: Provided further that other assets held by employees who have been in continuous full-time employment within the family business for over three years and who are not family members shall be disregarded for the purposes of this paragraph if their aggregate value does not exceed ten per cent of the net assets of the family business: Provided further that such a business shall abide by all the provisions relative to unregistered organisations as provided in the Civil Code, and the relative Schedule thereto: Provided further that where any business assets are held on lease, the family members are the majority of the lessees in the lease agreement; and

(f) any other business as the Minister may prescribe.

(2) For the purposes of this article, a reference to shares, interests or other assets, held indirectly by family members in the business or contributions made to the business indirectly by family members refers to those shares, interests or other assets held or contributions made by:

(a) holding companies which are at least 85%, as the case may be, beneficially owned by family members; or this sub-article if they may not in aggregate benefit from more than five per cent of the family business, or if they are only residual beneficiaries who will benefit from the trust only upon termination of the trust due to the fact that there are no existing beneficiaries capable of benefiting from the trust at any relevant point in time: Provided that other beneficiaries who are employees who have been in continuous full-time employment within the family business trust for over three years and who are not family members within the same family shall be disregarded for the purposes of this sub-article if they may not in aggregate benefit from more than ten per cent of the family business, or if they are only residual beneficiaries who will benefit from the trust only upon termination of the trust due to the fact that there are no existing family members within the same family capable of benefiting from the trust at any relevant point in time; or

(c) private foundations that are set up for the benefit of family members within the same family provided that other beneficiaries who are not family members within the same family shall be disregarded for the purposes of this sub-article if they may not in aggregate benefit from more than five per cent of the family business, or if they are only residual beneficiaries who will benefit from the private foundation’s assets only upon termination of the private foundation due to the fact that there are no existing beneficiaries capable of benefiting from the foundation at any relevant point in time: Provided that other beneficiaries who are employees who have been in continuous full-time employment within the family business for over three years and who are not family members within the same private foundation shall be disregarded for the purposes of this sub-article if they may not in aggregate benefit from more than ten per cent of the private foundation, or if they are only residual beneficiaries who will benefit from the private foundation only upon termination of the private foundation due to the fact that there are no existing family members within the same family capable of benefiting from the private foundation at any relevant point in time: Provided further that where any business assets are held on lease, the family members are the majority of the lessees in the lease agreement.

(d) the shares shall allow for right to assets and profits upon winding up.

(2) For the purposes of this Act, all other shares shall be disregarded.

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