The status of company directors and their liability towards third parties

Abstract

Our Company Law has three direct sources: the Commercial Partnerships Ordinance; Usages of Trade; and the Civil Law. Section 2 of the Ordinance provides that where the Ordinance is silent, the usages of trade or, in their absence, the civil law shall apply. The Ordinance is mainly modelled on the United Kingdom Companies Act of 1948. Therefore, in interpreting the provisions of the Ordinance reference will have to be made to the English judgments. This may give rise to various anomalies. The Companies Act 1948 was enacted with an English legal history as a background. Whereas a precise understanding of the provisions of the Ordinance depends on constant reference to English law, it might happen, as is invariably the case, that the underlying English principles have no precise counterpart in Maltese law. On the other hand, where the Ordinance is silent it is the general law of Malta that should apply and not English law English law would be applicable only via usages of trade. A study of the status of the directors and their liability towards third parties must be conducted in this context.