Shareholders’ Agreements Vs Articles Of Association: Which Document Prevails Under Maltese Law?

In modern corporate practice, particularly in privately held companies, it is common for shareholders to regulate their relationship through two distinct legal instruments: the Memorandum and Articles of Association and a shareholders’ agreement. While both documents play an important role in corporate governance, difficulties arise when their provisions are not aligned. This raises an important legal question under Maltese law: which document prevails in the event of a conflict?

The Memorandum and Articles of Association form the constitutional foundation of a Maltese company. Registered with the Malta Business Registry, these documents bind the company and its shareholders by operation of law. They establish the company’s legal identity, define its objects, determine the structure of its share capital, regulate its internal governance and set out the powers of its organs. Crucially, their public nature allows third parties to rely on them when dealing with the company, providing