Failing to keep your company in good standing until it’s struck off the company register, imperatively, should never be classified or thought of to be a substitute for proper company liquidation. Under Maltese law, a company cannot simply cease operations without a formal winding-up process. In this last chapter of our series “The Essential Guide to Keeping a Maltese Company in Good Standing” we explain how the Liquidation procedures are governed by the Companies Act (Chapter 386, Laws of Malta) and how it works.
The Act sets out detailed rules for dissolving a company, whether voluntarily or by court order. In all cases, the company’s assets are realised, creditors paid in rank order, and any surplus distributed to shareholders. Directors lose control after dissolution; the appointed liquidator takes over administration and must follow statutory timelines and reporting requirements. Key sections of the Companies Act govern the three modes of winding up in Malta.
Members’ Voluntary Liquidation (Shareholders’ Voluntary Winding Up)
A Members’ Voluntary Liquidation (MVL) applies when the company is solvent. Shareholders pass an extraordinary resolution to dissolve the company and appoint a liquidator. Following this, the company must submit the liquidation documents to the MBR to kick-off the MVL.
The liquidator’s acceptance of appointment must be filed with the Registrar of Companies. Within 14 days the liquidator submits a Statement of Affairs to the MBR. At this point the company is marked “in dissolution” on the official register.
The liquidator then realises assets and pays creditors by rank of priority. Once assets are realised, the liquidator prepares final accounts and a scheme of distribution showing how assets are applied. These shall be audited and submitted wo the MBR.
After the Registrar publishes notice in the Government Gazette (or on its website), a three-month waiting period begins. If no creditor applies to defer striking off during that time, the company’s name is struck off the register and the company is dissolved.
Creditors’ Voluntary Liquidation
If the company cannot pay its debts, the shareholders may nonetheless resolve to wind it up voluntarily, which triggers a Creditors’ Voluntary Liquidation (CVL).
While the process of appointing a liquidator to manage the procedure remains unchanged from the first scenario, once the company’s assets are liquidated, the proceeds are distributed to the creditors first.
As in MVL, the liquidator prepares audited final accounts and a distribution scheme. After presentation to shareholders and creditors, these documents are lodged with the Registrar. The Registrar then waits three months (Article 275 of the Companies Act) before striking off the company, unless a creditor successfully petitions the court to delay it.
Court-Ordered Winding Up
Typically, being the last resort and initiated at the request of a creditor, or even at times requested by the shareholders or the directors of the company, this type of liquidation is imposed and mandated by the court when a company is unable to pay its outstanding debts to creditors. During a court-ordered winding up of a company, a public officer is appointed to carry out a thorough investigation into the company’s financial affairs, as directed by the Courts of Malta.
Following this assessment, the officer needs to provide the court with crucial updates on important key matters including the company’s issued and paid-up share capital, an estimation of the company’s assets and liabilities, and its insolvency status. Prior taking a final decision on the matter, the court also imposes and requests a thorough evaluation of the factors contributing to the company’s failures. This process also involves assessing whether additional investigations are required into any aspect of the company’s formation, operations, or business practices.
Who qualifies as a Liquidator?
Under Maltese law, a liquidator must be a qualified professional. Specifically, Article 305 provides that a liquidator must be a Maltese advocate (lawyer) or a Certified Public Accountant/Auditor, or a person registered as “fit and proper”.
The Malta Business Registry and the required filings
The Malta Business Registry (MBR) publishes standardized forms for every step of winding up and these include:
- Form B(1) – Notice of resolution for dissolution and consequential winding up.
- Form B(2) – Declaration of Solvency (for a Members’ voluntary winding up).
- Form L – Notice of appointment of liquidator (when appointed by company).
- Form L(1) – Notice of appointment of liquidator by the Court.
- Form L(2) – Notification of liquidator’s bank account.
- Form L(3) – Notice of resignation of a liquidator.
- Form L(4) – Liquidator’s statement of pending winding up.
All these forms are submitted through MBR’s online portal or on paper to ensure the register stays current.
Summarising the Members’ Voluntary Liquidation
In addition to a generic overview of what the types of liquidations exist in Malta, this article also aims to provide a clear understanding of the specific steps involved in executing a shareholders’ voluntary liquidation. The following is a timeline of events to the MVL.
- Shareholders pass an extraordinary resolution to close the company down. Through this resolution, a liquidator is typically appointed, and the date of liquidation is generally specified.
- Company officers must ensure that the company is in good standing from both an accounting and corporate perspective. Regulatory compliance is key, and officers need to ensure that all accounting matters, audited financial statements, tax returns, and corporate documents are properly submitted to the relevant authorities.
- Submission of the necessary documents to the Malta Business Registry, specifically the liquidation forms, and a statement of affairs. Upon this notification, the company will be marked as in dissolution in the registry of companies.
- Preparation of the liquidation accounts and plan of distribution pertaining to the company’s assets is prepared by the liquidator and audited.
- Removal of the company’s tax and vat number from the tax authorities in Malta.
- Removal of the company’s corporate bank account.
- Submission of the audited accounts and the asset distribution plan to the MBR, upon shareholders’ approval.
- Upon completion of the necessary vetting by the Malta Business Registry, the company will be officially struck off the registry after a three-month period from the initial effective date.
The proper completion of liquidation brings legal and financial closure to a company’s lifecycle.
It also serves as a reminder that maintaining good standing from incorporation to dissolution is essential to protecting both corporate integrity and stakeholder interests in Malta.
With this chapter, we conclude our series “The Essential Guide to Keeping a Maltese Company in Good Standing”.
We hope it has provided clarity on the obligations, processes, and best practices that enable every Maltese company to remain compliant and operate with confidence.