Association "en participation"

General Information

An association 'en participation' is a contract constituted in writing whereby a person assigns to another, for a valuable consideration contributed by the latter, a portion of the profits and losses of a business or of one or more commercial transactions. Associations 'en participation' are also regulated by the Companies Act. An association 'en participation' shall not be subject to any other formalities prescribed in regard to partnerships and it does not have a legal personality distinct from that of its members.

Incorporation

Saving the provisions of the law outlined hereunder, an association 'en participation' may be formed in such manner, in such proportions of interests and upon such conditions as may be agreed upon by the parties.

Saving any agreement to the contrary, the associating party may not have other associates in the same business or transactions without the consent of his associates. In regard to third parties the ownership of, or other rights over, a thing contributed by an associate vests in the associating party. In the relations of the parties among themselves, saving any agreement that a thing contributed is to be restored in kind, the associate is, on the termination of the association, entitled to the reimbursement of the value of his contribution. A third party acquires rights and assumes obligations against and in favour only of the associating party.

Capitalisation and Financing

In an association 'en participation' a person assigns to another, for a valuable consideration contributed by the latter, a portion of the profits and losses of a business or of one or more commercial transactions.

Board Structure

The management of the business or of the transactions in respect of which the association was formed vests only in the associating party, provided that the associate may, where it is so agreed and to the extent agreed, supervise such business or transactions. The associate is in all cases entitled to an account of any transaction that is completed and, where the association lasts for more than one year, to an annual account of the management of the business or transactions in respect of which the association was formed. Unless otherwise agreed, the associate bears the losses in the same proportion in which he partakes in the profits, and his liability is limited to his contribution.

Annual Costs

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Corporation Taxation and Financial Reporting

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Employee Participation in Corporate Bodies

Not available under Maltese Law.