The perceived advantages of the limited liability company in the Maltese environment

Abstract

To date, the limited liability company has been the most popular type of partnership in Malta. This dissertation investigates the perceived advantages of the limited liability company, and presents an analysis of the findings. The investigation was carried out by means of a survey, wherein the respondents expressed their views as to the advantages offered by the limited liability company. Various advantages were mentioned, such as limited liability; fixed company taxation rate and other taxation advantages; continuity; succession; credibility; separate legal identity and others. The analysis carried out in the course of the dissertation reveals that, under certain circumstances, a good number of these perceived advantages are notional rather than real. For example, the concept of limited liability does not apply in cases where personal security is taken against possible liabilities. Another example is that no advantage exists with relation to taxation of company profits, if such profits are distributed. Thus, it appears that arguments can be presented against, as well as for, the advantages offered by the limited liability company in our local environment. A concluding point is that the particular circumstances of our environment must be kept in mind, when contemplating any changes intentioned to improve the advantages offered by the limited liability company.