By virtue of the Companies Act (Shipping and Aviation Cell Companies) Regulations of 16th June 2020, the Malta legislator has extended the concept of cell companies to the business of shipping and aviation.
By virtue of the Companies Act (Shipping and Aviation Cell Companies) Regulations of 16th June 2020, the Malta legislator has extended the concept of cell companies to the business of shipping and aviation.
The concept of cell companies in Malta was introduced primarily for insurance and securitization vehicles. Indeed, a cell company is formed as such for the creation within itself of one or more cells for the purposes of segregating and protecting the cellular assets of the company. The cells, in turn, are created within such company for the segregation and protection of cellular assets within that same company. In this manner, the different cellular assets within the cells of the cell company are distinct and therefore protected in relation to each other.
Creating different cells within a cell company does not mean that the cell company stops being a single legal person or that the cell becomes a separate legal person. However, each cell within a cell company shall have its own distinct name and designation and cellular assets within a particular cell shall have their owners’ interest accordingly updated at the relevant Registry (Merchant Shipping or Aircraft Directorate). The cell company may also hold assets which are non-cellular and therefore not attributed to a particular cell.
Extending the concept to shipping and aviation companies is a beneficial step for such businesses and this particularly since such companies may hold various assets such as multiple ships or vessels, or aircraft. In this way, the assets of one cell are protected from the creditors of another cell within a cell company.
