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Cell Companies in the Shipping and Aviation Sectors
Cell Companies in the Shipping and Aviation Sectors
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area
- News
reading time
3 minutes
Cell Companies in the Shipping and Aviation Sectors
date
area
- News
reading time
3 minutes
In June 2020, the Companies Act (Shipping and Aviation Cell Companies) Regulations (S.L. 386.22) were implemented into Maltese law. These regulations provide for the incorporation of cell companies in the shipping and aviation sectors. Unlike a limited liability company, a cell company has a distinct structure which allows for the creation of multiple ‘cells’ within one entity, each cell having its own assets and liabilities and being separate and distinct from the other cells within the entity, while retaining one legal personality. This supports the concept of patrimony segregating, a well-established practice in the international shipping and aviation sectors.
Due to the cell company retaining one legal personality, the directors are responsible for ensuring a distinction between the cellular and non-cellular assets through the maintenance of separate records, accounts, statements, and relevant documentation, which are important for the required separation between the cells. Cell companies may obtain any license or authorization under any law to carry out specific activities as any other form of company would, and such a license would apply to all cells within the company.
A company may specifically be set up as a cell company, or, if its memorandum and articles allow it, it may be converted to one. All cell companies must bear the designation ‘Mobile Assets Protected Cell Company’ or ‘MAPCC’ in their name, and each cell within the company must have a unique name or designation. A cell company must always indicate in all business letters and forms that it is a cell company and shall inform any person dealing with a particular cell of the company, if that is the case, that the transaction is in fact specific to that cell. In addition, creditors of a particular cell shall have recourse to cellular assets attributable to that cell only and not to any other cell or non-cellular assets of the company, thereby segregating claims and liabilities.
Following the establishment of the MAPCC, cells are created through a decision of the directors, which must be submitted to the Malta Business Registry for registration. Should a company be converted to a cell company, its directors must, within 40 days, resolve to attribute assets of the company to particular cells. Such a decision must be notified to the Registrar within 14 days for publication and such assets are only considered cellular assets upon publication of a notice by the Registrar.
A cell company may issue cell shares for any of its cells, with the proceeds of such constituting cell share capital, which shall then comprise cellular assets falling under the respective cell. Furthermore, a cell company may issue cellular dividends derived from the assets and liabilities or the profits in each cell. In such a case, when issuing cellular dividend, only the financial position of the cell shall be considered, and not the financial position of the other cells or the non-cellular assets.
The benefits of cell companies are numerous:
- Cell companies benefit from a favorable tax imputation system.
- Cells are easily and swiftly set up, thereby waiving the administrative burden and additional costs of establishing a new company.
- Each cell has a distinct patrimony from each other cell. Any claims relating to a cell are limited to its own assets, and the assets of other cells within a MAPCC remain protected.
- A cell company has a single board of directors and one memorandum and articles of association constituting it. This means that administrative matters are unified, thereby reducing the challenges faced by groups with multiple companies.
- A single operational license applies to the whole cell company, reducing the need for multiple licenses, thereby reducing administrative work.
