The Maltese Companies Act 1995 (as subsequently amended), identifies the instances which result in the winding up of a company registered in Malta. The dissolution and consequential winding up of a company can be triggered voluntarily (in the case of a members’ or creditors’ voluntary winding up) or by Court order.
Voluntary winding up
When a company is deemed to be solvent, the liquidation process would typically involve a members’ voluntary winding up which is triggered by the shareholders of the company. This is a relatively quick process and is much simpler than the other forms of liquidation mentioned earlier.
When a company passes a resolution for the dissolution and consequential voluntary winding up, it is required to deliver a notice of such resolution to the Registrar within fourteen days from the date of the dissolution of the company.
A company shall cease to carry on its business except in so far as may be required for the beneficial winding up thereof as from the date of the resolution. Furthermore, any transfer of shares, unless sanctioned by the liquidator of the company, after the date of the dissolution shall be deemed to be null and void.
Declaration of solvency
In the case of a voluntary winding up, the directors of the company shall make a declaration to the effect that they have made a full inquiry into the affairs of the company and that have formed the opinion that the company will be able to pay its debts in full within a period not exceeding twelve months from the date of dissolution. The declaration is to be made by the majority of the directors, in the case where the company has more than two directors.
Such declaration is to be made within the month immediately preceding the date of the passing of the resolution for dissolution and consequential voluntary winding up. The declaration is to include a statement of the company’s assets and liabilities made up to a date not earlier than the date of the declaration by more than three months.
Appointment of liquidator
In the case of a voluntary winding up, a liquidator is appointed by the company by way of an extraordinary resolution. The liquidator shall assume the responsibility to wind up the affairs of the company and distribute the assets of the company to its shareholders. Upon the appointment of the company’s liquidator, the directors of the company shall cease to hold office.
Furthermore, the Companies Act, provides for remedies and sanctions applicable to exceptional instances where the liquidator is not appointed by way of an extraordinary resolution.
Ongoing obligations – liquidator
The liquidator is required to summon a general meeting of the company in the event of the winding up continuing for more than twelve months. Furthermore, shareholders holding not less than one-tenth of the paid-up share capital having the right to vote at general meetings of the company may request the liquidator to convene a general meeting of the company.
Qualification and prohibitions of liquidators
A person shall not be qualified to act as liquidator unless the person is an advocate or is an individual who is a certified public accountant or is a certified public accountant and auditor. A person may not act as a liquidator if he/she has held office of director or company secretary or has held any other appointment with or in connection with that company, at any time during the four years prior to the date of dissolution.
As soon as the affairs of the company are fully wound up, the liquidator share make an account of the winding up, showing how the winding up has been conducted and how the property of the company has been disposed of. Furthermore, the liquidator shall draw a final scheme of distribution indicating the amount due in respect of each share from the assets of the company. The liquidator shall call a general meeting of the company for the purpose of laying before the members, the account and scheme of distribution, together with the auditors’ report. The final scheme of distribution is to be filed at the Registry within seven days following the meeting.
Striking company’s name off the register
Upon the filing of the accounts and the final scheme of distribution, together with the auditors’ report, the Registrar shall forthwith register them and upon the expiration of three months from the publication of the notice, shall strike the company’s name off the register.
How can we assist you?
We can provide you with our professional assistance in the dissolution and consequential voluntary winding process of your company.
Our professional services include the following:
Assistance in ensuring that the company meets all its obligations applicable to the winding up process;
Completion of all the necessary documentation (including assistance in the drafting of the ‘statement of affairs of the company’ and MBR forms;
Appointment of company liquidator;
Audit services in respect of the final scheme of distribution;
Filing of all documents at the Registry; and
Completion of tax returns.