Chapter 565

FAMILY BUSINESS [ CAP. 565. CHAPTER 565 FAMILY BUSINESS ACT ARRANGEMENT OF THE ACT Articles 1-2 3 - 16 17 - 32 33 - 37 Part I Part II Part III Part IV Preliminary General Provisions The Regulator Offences and Penalties First Schedule Application Form for Registration as a Family Business Annual Return (Deleted by XXXVII of 2018) Second Schedule 1 2 [ CAP. 565. FAMILY BUSINESS CHAPTER 565 FAMILY BUSINESS ACT To encourage the regulation of family businesses, their governance and the transfer of the family business from one generation to the next; to encourage and assist family businesses to enhance their internal organisation and structure with the aim of effectively operating the business and working towards a successful succession of the family business; and for other matters consequential or ancillary thereto. 1st January, 2017* ACT XLVIII of 2016, as amended by Acts XXXVII of 2018 and XXXI of 2021. Part I Preliminary Short title. Interpretation. Amended by: XXXI.2021.2. Cap. 364. Cap. 463. Cap. 325. 1. The short title of this Act is the Family Business Act. 2. In this Act, and in any rules or regulations made under this Act, unless the subject or context otherwise requires: "applicant" means a business registering as a family business under this Act; "benefits" means any assistance or relief granted to a registered family business in terms of the Duty and Documents Transfers Act, Malta Enterprise Act, Business Promotion Act and in terms of any other law or scheme as the Minister may prescribe by regulations; "established in Malta" means the head office, agency, or branch or part of a business and shall include a permanent presence of that business carried out in Malta; "family business" has the meaning assigned to it in article 3; "family member" means the family business owner’s spouse, ascendants, descendants in the direct line and their relative spouses, brothers or sisters and their descendants or as the Minister may prescribe; Cap. 386. "guidelines" means the set of rules issued by the Regulator from time to time for the further implementation of the provisions of this Act, and any regulations made hereunder, including the definition, application, administration, grant and revocation of benefits, schemes and other arrangements for the regulation, management and transfer of family businesses and their governance in Malta; "limited liability company" means a company duly formed and registered under Part V of the Companies Act; "the Minister" means the Minister responsible for the Malta Enterprise and includes, to the extent of the authority given, any * see sub-article (2) of article 1 of the Act as originally enacted, and Legal Notice 387 of 2016. FAMILY BUSINESS [ CAP. 565. 3 person authorised in that behalf for any purpose of this Act; "owner" means the ultimate beneficiary, natural person who, directly or indirectly, has a shareholding or other interest in a family business; "partnership" means a partnership en nom collectif or partnership en nom commandite duly formed and registered in terms of Part III and Part V of the Companies Act; "prescribed" means either prescribed by regulations made by the Minister under this Act or prescribed by binding guidelines made by the Regulator under this Act, unless otherwise expressly stated, and in the event of a conflict between the regulations made by the Minister and guidelines made by the Regulator on any particular matter, the regulations shall prevail; "private foundations" means those foundations established for a private interest and registered or otherwise recognised as legal persons in terms of the Second Schedule to the Civil Code; "public limited company" means a company duly formed and registered under Part V of the Companies Act; "the Regulator" means a person who is appointed to manage, supervise and administer the Register of Family Businesses according to this Act and appointed by virtue of article 17; "spouse" means a spouse in terms of the Marriage Act and a partner in terms of the Civil Unions Act; "trusts" means a trust in terms of the Trusts and Trustees Act. Cap. 386. Cap. 16. Cap. 386. Cap. 255. Cap. 530. Cap. 331. Part II General Provisions 3. (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: Conditions for registration as a family business. Listed companies. Limited liability companies. 4 Registered partnerships. Trusts. [ CAP. 565. FAMILY BUSINESS Provided further that shares held 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 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; (c) in the case of partnerships en nom collectif and partnerships en commandite: (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 FAMILY BUSINESS [ CAP. 565. 5 capable of benefiting from the trust at any relevant point in time: Provided further that other beneficiaries who are employees who have been in continuous full-time 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 Other registered forms of a family business. Cap. 16. Other business. Indirect acquisition of a family business. 6 [ CAP. 565. FAMILY BUSINESS (b) trustees of a trust 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 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. FAMILY BUSINESS [ CAP. 565. 4. (1) For the purposes of this Act, shares or share capital of a company shall mean: (a) (b) (c) (d) 7 Ownership of family business. the issued share capital of a company; the shares allow for rights to dividends; the shares shall be voting shares; and 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. 5. (1) An owner who is also a family member shall not have in ownership or the beneficial interest: Apportionment of ownership. (a) in the case of a company, own, whether directly or indirectly, more than eighty per cent (80%) of the issued share capital of the family business; or (b) in the case of a partnership en nom collectif or en commandite contribute, whether directly or indirectly, more than eighty per cent (80%) to the partnership’s assets; or (c) in the case of a trust be in a position where he may benefit from more than eighty per cent (80%) of the trust property; or (d) in the case of a business carried out in partnership in any other form, own, whether directly or indirectly, more than eighty per cent (80%) of the business assets; or (e) in the case of indirect ownership, own more than eighty per cent (80%) of the shares, interests, other assets or contributions of the business. (2) The percentage of eighty per cent (80%) shall be that percentage that remains after deducting the percentage of five per cent (5%) from the total contributions not owned by family members and after deducting the ten per cent (10%) of the contributions owned by employees of the business in accordance with the provisos of article 3. 6. In the case of a trustee directly or indirectly holding a family business, for the benefit of family members, registration for the purposes of this Act shall be made after the declarations and documents required in the First Schedule are delivered to the Regulator by the duly licensed pro tempore trustee of the interests in the family business being held under the trust. Trusts. 7. (1) A business shall be a registered family business once it has been accepted for registration by the Regulator in terms of article 28. Registered family business. (2) The family business may, upon a resolution of the holders of shares or other participating rights or interests therein, request the removal of the family business from the Register upon giving three months notice to the Regulator and, in such case, the 8 [ CAP. 565. FAMILY BUSINESS Regulator shall proceed to cancel the registration subject to the issue of any orders under article 31 which he may consider appropriate. Identified representative. 8. A registered family business shall clearly identify a representative of the family business and make his contact details available to the Regulator upon any change. Notification of change. 9. A registered family business shall notify the Regulator of any change set out in article 3 within ten days from such change. Disqualification. 10. A business shall not qualify to be registered as a family business if it has not been actively trading or in operation without interruption for a minimum period of at least three (3) consecutive calendar years. Objective of benefits. Amended: XXXVII.2018.2. 11. (1) The intended objective of the benefits provided under this Act are for the facilitation of the transfer of the registered family business from the owners who are family members to other family members within the same family. (2) Transfers made by family members to family members who are ascendants shall not be eligible for any of the benefits. (3) Upon receiving benefits it shall not be possible for the registered family business or the family member to transfer or assign in whole or in part the benefits of an incentive granted by virtue of this Act, to any other person or business. Cap. 364. (4) When a registered family business intends to apply for any benefits in terms of this Act or any other law referring to family businesses, the family business shall obtain the issue of an updated certificate from the Regulator attesting that the family business still qualifies as a registered family business in terms of this Act. (5) The benefits in terms of the Duty on Documents Transfers Act shall only be granted to a registered family business which has all fiscal returns and contributions duly submitted up to the date of the transfer and the tax due in terms of the Duty on Documents Transfers Act has been paid in full before the transfer takes place. (6) Any business shall only be eligible to benefit from any incentive, benefit or scheme available to family businesses, that may come into force from time to time, if it is duly registered as a family business. (7) When granting benefits to family businesses, the Government or any other entity shall consult and may rely on the information contained in the Register established in accordance with article 26 of this Act. Industrial premises. Cap. 325. 12. When a registered family business is occupying industrial government premises or land on lease or emphyteusis respectively as prescribed under the Business Promotion Act and subject to the business satisfying all the conditions of the tenancy agreement or emphyteutical deed, the Regulator shall recommend to the Malta Enterprise Corporation and, or Malta Industrial Parks to renew the FAMILY BUSINESS [ CAP. 565. 9 tenancy, which renewal shall not be unreasonably withheld when the objectives of the renewal are to ensure the continuity of the family business between family members. 13. (1) A registered family business benefiting from an incentive by virtue of its registration under this Act shall submit the Annual Return found in the First Schedule to the Regulator by the end of the calendar year. In default there shall be a penalty of twenty-five euro (€25) for each month of delay. In the event of noncompliance for a year, registration shall be duly cancelled and all benefits shall be refunded and reimbursed immediately. (2) The annual return for a family business shall cover a calendar year from the first day of registration up until one year from the registration date. 14. (1) Any acquisition of immovable property in respect of which a benefit has been claimed pursuant to this Act must remain within the registered family business for a minimum period of three (3) years and in the event that such immovable property is transferred they must be replaced with a similar asset used for the same benefit of the registered family business or such other period as the Regulator may approve. Annual Return. Amended: XXXVII.2018.2. Restriction on transfer. (2) Any acquisition of shares, interests, contributions or other assets in respect of which a benefit has been claimed pursuant to this Act must remain within the registered family business for a minimum period of three (3) years and in the event that such shares, interests, contributions or other assets are transferred they must be replaced with a similar share, interest, contribution or other asset used for the same benefit of the registered family business or such other period as the Regulator may approve. (3) The owners of the registered family business must undertake to trade and operate the family business during these three (3) consecutive years without interruption immediately following the granting of the benefits or such other shorter period as the Regulator may approve and in the event that the business ceases to exist in the said period, any benefit claimed shall be refunded and reimbursed. 15. In the event that a registered family business which has availed itself of and claimed any benefits does not remain constituted and registered as a family business for a minimum period of three (3) consecutive years as referred to in article 14, the business shall make a refund of the benefits: Provided that where a business does not remain constituted as a family business due to the unexpected death of a family member, in those cases where the business is owned, whether directly or indirectly, by only two family members, the business shall not be required to refund the benefits acquired for the previous transfer of the business: Provided further that the Regulator shall be informed by the surviving family member within sixty (60) days from the date of the deceased. Decomposition of family business. 10 [ CAP. 565. Powers of the Minister to make regulations. FAMILY BUSINESS 16. (1) The Minister may by regulations prescribe the proper implementation of the provisions of this Act. (2) The Minister may also by regulations amend the Schedules to this Act. Part III Appointment of the Regulator. The Regulator 17. (1) There shall be a Regulator for Family Businesses who shall be appointed by the Minister for the purpose. (2) The Regulator shall be appointed for a period of three years and may be re-appointed upon expiration of the term of office for a further period or periods: Provided that during his term as Regulator, such person shall not hold any position which results in a conflict of interest or is incompatible with the correct performance of his official duties as Regulator or with impartiality expected from this office or with public confidence therein. (3) The Regulator shall receive such remuneration as the Minister may establish. (4) When the office of the Regulator becomes vacant, a person appointed as Regulator shall hold office temporarily until a successor is appointed. The Minister may, at any time, during the absence of the Regulator or for any other temporary purpose where the Minister considers it necessary to do so, appoint a person to act in the office of the Regulator, until the resumption of office of the Regulator. (5) The Regulator shall be provided with premises and an adequate number of officials and staff to carry out the functions assigned to him under this Act. (6) The Minister may also appoint one or more Deputy Regulators to assist the Regulator as directed by him and in the performance of his functions: Provided that the Deputy Regulators, officials and staff appointed to assist the Regulator shall receive such remuneration as the Minister may establish. Legal personality of the Regulator. Added by: XXXVII.2018.4. 17A. (1) The Regulator shall have a separate and distinct legal personality and shall be capable, subject to the provisions of this Act, of entering into contracts, of acquiring, holding and disposing of any kind of property for the purposes of its functions, of suing and being sued, and of doing all such things and entering into all such transactions as are incidental or conducive to the exercise or performance of its functions under this Act, including the lending or borrowing of money: Provided that the Regulator shall not have the power to: (a) borrow or lend any monies except with the authority and concurrence in writing of the Minister and FAMILY BUSINESS [ CAP. 565. 11 Minister responsible for finance; or (b) enter into any form of commercial partnership in furtherance of its functions or otherwise, unless authorized to do so in writing by the Minister; or (c) delegate any of its functions in a manner other than that established by or under this Act. (2) The legal representation of the Regulator shall vest in the Regulator himself: Provided that the Regulator may appoint any one of its officers or employees to appear in the name and on behalf of the Regulator in any judicial proceedings and in any act, contract, instrument or other document whatsoever. 18. A person shall not be qualified to be appointed, or to remain, a Regulator if he: (a) is a presiding judge or magistrate; or (b) is adjudged bankrupt or has entered into any arrangement with his creditors; or (c) is interdicted or incapacitated; or (d) is convicted of an offence affecting public trust, theft, or fraud or of knowingly receiving property obtained by theft or fraud; or (e) is subject to a disqualification under article 320 of the Companies Act; or (f) is a public officer or becomes a public officer. 19. (1) The Regulator shall only be removed or suspended from office by the Minister on the grounds of proved inability to perform the functions of the office of the Regulator or proved misbehaviour. Disqualification from appointment of Regulator. Cap. 386. Removal from office. (2) The Regulator may, at any time, resign from office by notice in writing to the Minister. 20. (1) The Regulator shall assess all applicants seeking to register as a family business under this Act and, once registered, ensure their ongoing compliance with the relevant requirements and regulations made hereunder to his satisfaction. (2) The Regulator shall perform the duties and exercise the functions imposed and conferred on him by this Act and by any regulations made thereunder including: (a) accepting or refusing applications from businesses to register as family businesses in terms of this Act; (b) provide registration facilities for businesses which are eligible for enrolment in terms of this Act; (c) keeping and updating the register of registered family businesses; Functions of the Regulator. Amended by: XXXVII.2018.5. 12 [ CAP. 565. FAMILY BUSINESS (d) monitoring the activities of registered family businesses in order to ensure that they comply where applicable with the provisions of this Act and or, any regulations and or any guidelines as prescribed; (e) where eligible, providing the registered family businesses an updated registration certificate attesting that the business still qualifies as a family business in terms of this Act; (f) providing family businesses with information and guidance about the requirements, benefits and responsibilities in connection with registrations and enrolments in terms of this Act; (g) making recommendations to the Minister on legislation and policies in support of the family business sector; (h) assisting government, government departments, public agencies, authorities and entities controlled by the Government in preparing and reviewing policies in support of family businesses; (i) investigating written grievances in relation to this Act relating to registered family businesses or businesses purporting to be registered family businesses under this Act, and furthermore to investigate ex officio any registered family business for any shortcoming and to take such action as is in his power to redress any justified grievance that may come to his notice and including if he deems fit, to refer his findings to the police; (j) encouraging and promoting the family business sector by communicating, disseminating and making contact with relevant parties about news and information relevant to the sector; (k) encouraging family businesses to consider the benefits of entering into written agreements concerning the principles of governing the family business; (l) co-ordinating and communicating with any competent authority with a view to facilitating the registration and enrolment processes for family businesses; (m) performing any other function or duty that is assigned to him by the Minister under this Act and any regulations made thereunder as well as such other functions as may be assigned to him under any other law. (3) In the exercise of his functions, the Regulator shall act impartially and shall not be subject to the direction of any other person or authority. (4) The Regulator may, by writing under his hand, delegate to any person in the office of the Regulator, specific functions, powers or authorities assigned to or conferred on him by this Act or any other law, and may at any time revoke or vary such delegation: FAMILY BUSINESS [ CAP. 565. 13 Provided that no such delegation shall be deemed to divest the Regulator of any of his functions, powers or authorities and he may, if he thinks fit, exercise such functions, powers or authorities collaterally with the person so delegated. 21. The provisions of article 77 of the Public Finance Management Act shall not apply to the Regulator or any other person carrying out his functions in terms of this Act. Financial Administration and Audit Act. Cap. 601. 22. (1) The Regulator may request any information from any government entity, public authority or department in order to fulfil his duties. Information. (2) Any competent authority shall co-operate with the Regulator as required in the performance of his functions under this Act: Provided that the Regulator may require the submission of any documentation from any competent authority. (3) A demand under this article may also be sent to a person who is bound by a duty of professional secrecy under the Professional Secrecy Act and for the purposes of article 6A of such Act, the Regulator shall be considered to be a public authority. Any information obtained by the Regulator upon such a demand shall be used exclusively for the purposes of this article. Cap. 377. 23. The Regulator may, from time to time, issue guidelines in relation to the activities of registered family businesses and any breach or declaration from these guidelines shall be a consideration for the family business to have their registration certification cancelled. Guidelines. 24. Any registered family business not compliant with any rules and regulations under any other Act or legislation may be cancelled at the discretion of the Regulator. Cancellation. 25. (1) The Regulator shall, by not later than eight weeks after the end of each calendar year, prepare and present to the Minister an annual report which shall include: Annual Report. (a) a report of the Regulator’s office activities during the preceding year; (b) a general description of the circumstances of family businesses in Malta and any developments which may affect the sector; (c) any recommendation regarding legislation, regulations, policies or other matters affecting the family business sector; and (d) accounts and other financial records referred to in this Act. (2) The Regulator shall cause to be kept proper accounts and other financial records in respect of the operations of his office, and shall cause to be prepared a statement of accounts in respect of each financial year. After the end of each financial year, and not 14 [ CAP. 565. FAMILY BUSINESS later than the date on which the report in sub-article (1) is to be forwarded to the Minister, the Regulator shall cause a copy of the statement of accounts duly audited to be transmitted to the Minister together with a copy of any report made by the auditors on that statement or on the accounts of the office of the Regulator. Register of Family Businesses. Amended: XXXVII.2018.6. 26. (1) There shall be a Register of Family Businesses which shall be maintained by the Regulator and shall contain information and data relevant to the registration process as applicable, as found in the First and Second Schedule, supported by the documentation referred to in the Schedules. (2) Upon registration, the Regulator shall allocate a unique registration number to the family business which shall be preceded by the letters "FB" which registration number shall be known hereinafter as the Family Business Number" and the family business number may be quoted by the registered family business on any published materials, letters, notices, advertisements and other documents issued by such business. (3) A list of the names of the family businesses in the Register will be available upon written request. No other information or contents of the Register other than the name of the family business will be available for disclosure except to the competent authorities granting benefits as referred to in the Act. Data. Cap. 586. 27. The Regulator shall, for the purposes of this Act, compile and maintain the Register subject to the provisions of the Data Protection Act. Application to register. Amended by: XXXVII.2018.7. 28. (1) For a family business to be registered as such, tan application with any required documents shall be submitted to the Regulator who shall determine, to his satisfaction, whether the application complies with the provisions of this Act. (2) A business may apply for registration by submitting the prescribed application form provided by the Regulator. (3) A non-refundable administration fee shall be submitted with every application irrespective of the outcome of the application. (4) In considering an application, the Regulator may request the applicant to provide further information about the business or make representations on any matter on which he may have reservations or concerns in relation to the application. (5) The Regulator may accept or refuse any application for registration on the basis of any of the following: (a) the non-observance or otherwise of all the formalities required by this Act and as may be prescribed; (b) the legality or otherwise of the purpose and objectives of the business that is not in compliance of the law or ethics in relation to its business activities; (c) the fulfilment or otherwise of obligations relating to the payment of social security contributions in accordance with the applicable laws; FAMILY BUSINESS [ CAP. 565. 15 (d) the business has not fulfilled its obligations relating to the payment of taxes due in accordance with the applicable law; or (e) the business has not supplied the information required under these regulations or has incorrectly supplied them. (6) Where the Regulator requires proof from the applicant that none of the cases quoted in sub-article (5)(c), (d) and (e) have been met, it shall accept, as sufficient evidence, relevant certification issued by the administrative body in the country of origin or the country whence that person comes showing that these requirements have been met. 29. Certificates of registration shall be deemed to be public documents and shall be surrendered to the Regulator on his simple demand in writing stating the reasons for such request. Certificates. 30. The Regulator may request from the registered family business any information and any clarification, and may also carry out any verification required so as to ascertain to his satisfaction that such business is in compliance with the provisions of this Act or any rule, regulation or guideline made thereunder. The registered family business shall seek to comply with this request expediently and in default the Regulator may cancel the certificate of registration. Powers of the Regulator. 31. (1) The Regulator may order the cancellation of the registration of a family business by the issue of a cancellation order, which shall come into effect immediately. Cancellation of activities. (2) A cancellation order may be issued, at the discretion of the Regulator, if the registered family business: (a) is not compliant with the criteria, where applicable, in the First and Second Schedule or any other provisions, rules, regulations and guidelines in accordance with this Act; or (b) has not functioned, operated, traded or carried on business for a period which exceeds twelve consecutive months without interruption or earlier as the Regulator deems fit; or (c) has obtained registration on the basis of materially incorrect or incomplete information that would have otherwise resulted in a refusal had the correct or complete information been known to the Regulator; or (d) is not seeking to uphold and maintain the objectives of this Act; or (e) the certificate of registration has been used in an incorrect manner or a forgery thereof has been committed. (3) Prior to ordering the cancellation of the registration of a family business by the issue of a cancellation order, the Regulator shall inform the business in writing of his intentions to issue a 16 [ CAP. 565. FAMILY BUSINESS cancellation order. The Regulator shall grant the business a period of time to give reasons why the cancellation order should not be issued. Following this the Regulator may grant the business a period of time in which to regularise its position and conform to the provisions of this Act. If the business does not do so within this stipulated time period, which may be extended by the Regulator at his discretion, the Regulator shall order the cancellation of the registration of the family business in accordance with sub-article (1). (4) The Regulator shall notify and publish, in the Gazette, any cancellation order which has become final and shall notify all competent authorities accordingly. (5) The registration of a family business shall terminate ipso jure if the business is struck off, or ceases to operate, function, trade or carry on business under any form. Effects of cancellation of registration. 32. (1) In the event of cancellation of registration of a family business, the family members shall forthwith surrender, to the Regulator, the certificate of registration of such business and any person failing to surrender such certificate within the time stated as notified by the Regulator, shall be liable to an administrative fine of two hundred and fifty euro (€250). (2) In the event of cancellation of registration of a family business, all benefits granted to such business by virtue of registration, shall cease to have effect from the date when the decision to cancel takes effect. Cap. 12. (3) Cancellation for the reasons mentioned in article 31(2) shall require the business to refund any benefits received by the business or any other individual by virtue of its registration in terms of this Act unless provided otherwise in this Act, and the Regulator may issue the relative orders against the business and any persons involved in such business: Provided that when the demand for the refund of any benefits is made by the Regulator by judicial letter issued in accordance with article 466 of the Code of Organization and Civil Procedure, this shall constitute an executive title against the business or any named family member of administrator in favour of the Regulator, in his own or as trustee for the person entitled to the refund as aforesaid. (4) An order of the Regulator against a family business or any named family member shall be enforceable as an executive title once any judgment has become res judicata or no proceedings have been filed within the relevant time limits. Part IV Offences FAMILY BUSINESS [ CAP. 565. 33. (1) Any person or business who in order to obtain and maintain the status of a family business (a) in any manner, forges or alters a certificate of registration so as to give the impression that he acts on behalf of a registered family business shall be guilty of an offence and shall be liable to the same punishment as provided for in article 183 of the Criminal Code; (b) who falsely misrepresents the registered family business or makes false representations shall be guilty of an offence under this Act; (c) who, in any manner, makes an abusive use of a certificate of registration or the Family Business Label shall be guilty of an offence under this Act; (d) who without reasonable excuse prepares any incorrect statement or gives any incorrect information in relation to any matter falling under this Act, shall be guilty of an offence under this Act. 17 Forgery or alteration of certificates or misrepresentation or abusive use of status. Cap. 9. (2) Any persons or business who is found guilty of any offence under sub-article (1) shall be liable on conviction to a term of imprisonment from thirteen months to four years. (3) Upon any person or business admitting to or being found guilty of any of the above offences, the Regulator shall on conviction revoke any Certificate of Registration issued to the family business. (4) The Regulator shall issue public statements on the facts to warn the public about any abuse by any person or business. 34. (1) Any person or business who wilfully with intent to obtain any benefit under this Act or regulations made under this Act or to assist any other person to do so: (a) omits from a return or any other document or statement made, prepared or submitted for the purposes of or under this Act, any matter which should be included therein; or (b) makes any false statement or entry in any return or other document or statement prepared or submitted for the purposes of or under this Act; or (c) gives any false answer, whether verbally or in writing, to any question or request for information asked or made in accordance with the provisions of this Act; or (d) prepares or maintains or authorises the preparation or maintenance of any false books of account or other records or falsifies or authorises the falsification of any books of account or records; or (e) makes use of any fraud, art or contrivance or authorises the use of any such fraud, art or contrivance, shall be guilty of an offence, and shall for each such offence be liable on conviction to a fine (multa) of not less than two thousand Abuse of benefits. 18 [ CAP. 565. FAMILY BUSINESS euro (€2,000) and not exceeding twelve thousand euro (€12,000) or to imprisonment for any term not exceeding four years, or to both such fine and imprisonment. (2) Upon any person admitting to or being found guilty of any of the above offences, the Court may, on conviction, revoke any certificate issued to the registered family business. General penalty. 35. If any person or business contravenes or fails to comply with any of the requirements of this Act or of any regulations made thereunder, in respect of which no specific penalty is provided, he shall be guilty of an offence and shall for each offence be liable, on conviction, to a fine (multa) of not less than two hundred and fifty euro (€250) and not more than one thousand and five hundred euro (€1,500). Provision with respect to offences. 36. The provisions of this Act establishing offences and penalties in respect thereof shall not affect the operation of any other law establishing offences and penalties in respect of the same acts or omissions and shall not affect the application of any higher penalty under any other law. Prescription of proceedings for offences. 37. Proceedings for an offence under this Act may be commenced at any time within five years from the date of commission of the offence upon the complaint of the Regulator. Substituted by: XXXVII.2018.8. First Schedule (Article 13) Annual Return 1. Purpose. The purpose of this annual return is to provide the Regulator and any related competent authority with up to date information about the registered family business, benefiting from incentives by means of this Act. 2. Content and Form. The content and form of the annual return that each family business shall duly file with the Regulator annually is as follows: Contents and Form of Annual Return of a registered family business (a) Annual Return of .............. (insert official name of business) (b) Family Business Number: (c) Name and Designation of Contact Person: FAMILY BUSINESS (d) [ CAP. 565. Any changes to the family business structure undertaken in the last year: Declaration of Completeness and Correctness We hereby confirm that the details provided are complete and truthful as to their contents. Signature of Family Business Representative: Name and Surname: Date: Second Schedule (Article 13) Deleted by Act XXXVII of 2018. 19