Malta’s simplified dissolution framework
Malta has now taken a significant step forward by enacting Article 214A of the Companies Act, introducing a simplified dissolution process for qualifying private companies. This mechanism allows dormant entities that meet specific criteria to be struck off the register without undergoing a full liquidation procedure.
The law reflects Malta’s commitment to adopting a more practical approach towards corporate compliance hence making it easier for businesses to close down responsibly. By reducing operational headaches and costs, this reform supports Malta’s vision for a competitive and progressive business environment.
Key features of Article 214A
The simplified dissolution procedure is voluntary and applies only to private limited liability companies satisfying the following conditions in the six months preceding the application:
They have no outstanding liabilities (except minimal fees or shareholder loans).
They hold assets worth no more than €5,000.
They have no pending court proceedings or regulatory supervision.
They have not traded, employed staff (other than officers), or changed company name.
They have not entered into agreements, contracts and deeds, except with service providers.
They closed all bank accounts and settled obligations (including penalties) with public authorities.
They have complied with all prior year compliance obligations including the deregistration of any VAT and employer registrations.
Directors must declare in their application to the MBR that a shareholders’ resolution has been duly adopted to approve the simplified dissolution procedure. False declarations carry criminal liability.
Directors must also confirm that they will be retaining beneficial owner details and financial records as required by law. Alternatively, the Directors will need to appoint a designated person and communicate this to the Registrar.
Once the application is filed, the Registrar publishes a notice in the Government Gazette, MBR website and in a daily newspaper, triggering off a three-month notice period. Upon the lapse of the said period, and provided that no objections are filed, the company is struck off, thereby avoiding the need to appoint a liquidator and run through the full dissolution process.
What does this mean for Maltese companies?
For dormant companies, this reform is a gamechanger. It eliminates the need for lengthy and costly liquidation proceedings, offering a faster and more efficient route to dissolution. Eligible entities can now wind up in a manner that is both compliant and cost-effective.
Stay informed
At PwC Malta, we are actively assisting clients with their dissolution needs. If you are considering winding up a dormant entity or want to understand how these changes impact your business, reach out to our dedicated dissolutions team for guidance.
