Malta Partnership

02 March 2020

The Maltese Companies Act provides for two types of partnerships.

Partnership en nom collectif whereby all partners are unlimitedly liable and partnership en commandit where one of the partners has unlimited liability whereas the other partners have limited liability.

Partnership en nom collectif

A partnership en nom collectif is guaranteed by the unlimited, joint and several liability of the partners. This essentially means that after having extinguished the assets of the partnership, the creditors can turn on the individual members.

A partnership may be designated with any name provided that it does not pertain to an already existing partnership hence it mustn’t be able of creating confusion. The name of a partnership en nom collectif must not end with the words ‘ltd’ or ‘lp’ in order to avoid confusion as to its nature.


A deed of partnership must be entered into including the name of the partnership, name and residential address of the partners, purpose of the partnership, respective contribution of partners, the duration of such partnership, which could be indefinite, and other ancillary matters. In order for a partnership to start operating, a Certificate of Incorporation must first be issued.

Partnership en commandit

A partnership en commandit is guaranteed by the joint and several liability of the general partners and the limited liability of the other partners. General partners in a partnership en commandit are in the same situation as partners in a partnership en nom collectif, that is to say they are unlimitedly liable, whereas limited partners are liable only to the extent of the unpaid contribution, if any.

Rules as to the designation of the partnership applicable to partnerships en nom collectif, apply to partnerships en commandit.


A deed of partnership must specify the name of the partnership, the name and residential address of the partners distinguishing between the general partners and the limited partners, purpose of the partnership, respective contribution of partners and the duration of the partnership, which could be indefinite as well as other ancillary matters. In the case of limited partners, contributions cannot include personal services. On the other hand, since general partners stand liable with their property, present and future, they can include personal services.

The administration and representation of the partnership is vested in the general partners severally, excluding limited partners. General partners may appoint partners by unanimous decision. In order for the limited partners to perform any act of administration or transact business on behalf of the partnership, they must be vested with the power to do so by virtue of a Power of Attorney. A limited partner can only be involved in the administration or representation of certain specific transactions with the approval of other partners, ensuring that limited partners will not conduct business without authorisation. If a limited partner acts in prohibition of the above mentioned, he shall be bound unlimitedly, jointly and severally for all the obligations incurred and may also be expelled from the partnership.

Unless otherwise provided in the deed the limited partner may assign his interest. The partners in a partnership en commandit are also given the possibility dividing the capital into shares, bringing such partnership closer to the limited liability company.

Dissolution of Partnerships

In the case of partnerships, dissolution can be contemplated on one of three grounds:

  1. On the grounds contemplated in the partnership deed
  2. On the grounds contemplated in the law
  3. In case of bankruptcy

The causes of dissolution of partnerships en nom collectif and partnerships en commandit mainly comprise:

  1. The expiration of the period of duration of the partnership
  2. By agreement of all partners to the partnership
  3. If the partnership is adjudged bankrupt
  4. The court adjudges that there are grounds of sufficient gravity warranting dissolution
  5. The number of partners is reduced below two and remains so reduced for more a period of more than 6 months in the case of partnerships ennom collect if
  6. The absence of a general partner and/or limited partner for a continuous period of six months
  7. The causes listed in the partnership deed

Winding Up process

The partners will be called upon to contribute personally unless there are sufficient assets to satisfy all creditor claims. This applies to all partners in partnerships en nom collectif and to the general partners with unlimited liability in partnerships en commandit.

A liquidator will be appointed and will have the responsibility of conducting the winding up process. The liquidator is appointed by the partners and in case of disagreement, with court appointment in case of disagreement. The legal and judicial representation of the partnership is automatically transferred to the liquidator who will also be in charge of the administration.

The liquidator is dutybound to ascertain that no creditor is left unsatisfied and informs the partners as to the state and progress of the liquidation. As soon as the affairs of the partnership are wound up, the liquidator shall render an account of the winding up, together with a complete report of receipts and payments and a scheme of distribution.

Contact Rudolph Psaila to find out more.

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