A comparative analysis of the Maltese company and trust

Abstract

The introduction of the thesis traces the development of company and trust law in Malta and examines the characteristics of a trust compared to a limited liability company. The fundamentals for incorporating a valid trust and the aspects of a company's incorporation and constitution are differentiated and explained. The various types of trusts and companies found under Maltese law are also examined. A comparison of the fiduciary duties of company directors and trustees is made, taking into account the fiduciary obligations in both instances in terms of the Maltese Civil Code. The thesis further enquires into the demarcation between the legal title to ownership of shareholders and beneficiaries under a trust The right to information by shareholders of a company and that of beneficiaries is dealt with. An exposition is made of the rights of shareholders to receive a dividend from the company in contradiction to the obligations of trustees to hold and dispose of trust property in terms of a valid trust deed and the expectations of beneficiaries in terms of law. A comparison between the liability of directors of a company and trustees under a trust follows. The thesis concludes by explaining the general main uses of a limited liability company as compared with similar uses of trusts with their advantages in tax planning, asset protection and estate planning.