There are various winding up procedures to which a Maltese-registered company may be subjected in terms of Maltese law. Amongst the said modes of action is what is known as the members’ voluntary winding up. This refers to the solvent voluntary liquidation of a company and specifically necessitates that the company in question will be able to pay off its debts in full within a period not exceeding 12 months from the proposed date of dissolution.


Liquidation, or winding up, is the comprehensive legal process by which the affairs of a company are concluded so as to bring about the ultimate termination of a company. The commencement of the winding up process is, in turn, referred to as dissolution under Maltese law.

The object of any dissolution and winding-up process is essentially to realise the assets of the company, pay off all liabilities, and distribute any remaining assets between the shareholders of the company.

Which and why?

In terms of Maltese law, a company may be dissolved and wound up either by means of a court order or on a voluntary basis, the latter of which may in turn take the form of either a members’ or a creditors’ voluntary winding up.

The fundamental distinction between a members’ and a creditors’ voluntary winding up respectively, is the company’s state of solvency or lack thereof. A members’ voluntary winding up necessarily requires that the company is solvent, such that it is able to pay its liabilities in full within 12 months from the proposed date of dissolution. Where this is not possible, a voluntary liquidation should take the form of a creditors’ voluntary winding up in terms of law, to which additional and separate legal provisions also apply.

For the purposes of this article, we shall be considering the mechanics and procedure involved in a solvent voluntary dissolution and winding up, also known as a members’ winding up.

There are various reasons as to why a company may wish to liquidate while still being in a solvent state, for example, where a company has served the purpose for which it was originally formed, or in the event that its term has expired. It may also be that a company forms part of wider group of companies, the latter of which may be undergoing a group restructuring resulting in the said company’s intended redundancy. Another reason may be simply that the owner of a company wishes to retire and/or has no further desire to keep the said company active.

How and when?

Regardless of the reason, once it is agreed that a company shall proceed with dissolution and consequential winding up by means a members’ voluntary winding up, the shareholders must pass an extraordinary resolution for this purpose, indicating therein the date of the dissolution (the “DOD”) and approving the dissolution of the company as at the DOD, appointing a liquidator to wind up the company’s affairs, and appointing a liquidation auditor to audit the company's liquidation accounts (the “Extraordinary Resolution”). 

Note that as from the DOD, the company shall cease to carry on any business (save in so far as this may be strictly required for the beneficial winding up itself). It is therefore common practice for the DOD to be fixed at the end of a particular month, or at any such date which will allow enough time to bring the company into good standing with all relevant Maltese authorities (if and as necessary) and for the company to carry out any other measures which may be needed to clean up its balance sheet as much as possible prior to the DOD. The latter measures may include (albeit not be limited to) the transferring of assets held, the payment of dividends to shareholders, the payment of loan borrowings, the transfer of receivables to related parties, the sale of stocks, the collection of receivables etc.

Pursuant to the above, the law specifically requires that within 1 month immediately preceding the Extraordinary Resolution, the Board of Directors makes a full inquiry into the affairs of the company so as to be able to form an opinion that the company will, in fact, be able to pay its debts in full within a period not exceeding 12 months from the DOD (as proposed thereby), and accordingly produces a declaration to this effect, which declaration must additionally contain a statement of the company’s assets and liabilities not being older than 3 months from the date of the declaration (the “Declaration”). The Declaration is therefore crucial to, and characteristic of, the members’ voluntary winding up.

Note that any Director making a Declaration without having reasonable grounds to form the opinion therein shall be guilty of an offence and subject to harsh penalties in terms of law.

No Declaration?

In terms of Maltese law, a voluntary winding up in relation to which a Declaration has not been made is a creditors’ voluntary winding up.

Additionally, it is worthy to state that if, at any time after a Declaration has been made, the liquidator is of the opinion that the company will not, in effect, be able to pay its debts within the stipulated period, he is to call a meeting of the creditors and lay before such meeting a statement of the assets and liabilities of the company. In any such event, the legal provisions applicable to a creditors’ voluntary winding up shall apply.


Upon being appointed, the liquidator shall take over the stewardship of the company in lieu of the Directors and officers, the latter of whom will each be deemed to be relieved of their responsibilities as from the date the liquidator is appointed. Note however, that the Directors will still remain responsible for any actions taken in respect of the company up until the DOD.

It is relevant to note that more than 1 liquidator may be appointed to exercise the function of liquidator of the company. If a vacancy in the office of the liquidator arises by means of death, resignation or removal, the company must fill any such vacancy by means of extraordinary resolution. If for any reason, a liquidator is not appointed as aforesaid, the court shall appoint same upon an application made thereto for this purpose.

Registry submissions

Once the necessary resolutions are passed for the purposes of placing a company into solvent voluntary liquidation, the following documents must be submitted to the Registrar of Companies within 14 days of the DOD, and this will effectively trigger the dissolution of the company:

  1. a notice re the Extraordinary Resolution, which takes the form of the statutory Form B(1), signed by any 1 Director and/or the Company Secretary of the company;
  2. the Declaration, which takes the form of the statutory Form B(2), signed by all the Directors of the company (to which the statement of assets and liabilities shall be attached); and
  3. the notice of appointment of the liquidator, which takes the form of the statutory Form L, signed by the appointed liquidator. 

Practical Process

During the course of his stewardship, the liquidator shall ensure that the audit of the company for the period up to the DOD is duly performed and finalized, at which point, the liquidator must confirm that the company is in good standing with the following authorities:

  • The Malta Business Registry – i.e. ensuring that all statutory filings are made, and settling all administrative penalties imposed for non-compliance, if any;  
  • The office of the Commissioner for Revenue – i.e. ensuring that all tax and VAT returns are filed, all taxes paid, and all administrative penalties imposed for non-compliance, if any, are settled;

The liquidator must ultimately be able to confirm that no balances are due by the company to any authorities.

Should the company be in possession of a Maltese VAT Number, the liquidator is to inform the VAT Department at the office of the Commissioner for Revenue that the company has been placed into liquidation so as to bring about the cancellation of the Company’s VAT Registration. The liquidator must furthermore ensure to de-register the company’s PE number by filing the required documentation with the office of the Commissioner for Revenue.

Winding up

As previously advised, a solvent voluntary liquidation requires that the liquidator is able to wind up the company within 12 months from the DOD. In the event that a winding up continues for more than 12 months, the liquidator is required to call a general meeting of the company at the end of the 12-month period, or within 3 months from the end of the 12-month period (or such longer period as the Registrar may allow), wherein the liquidator shall lay a copy of his acts and dealings and of the conduct of the winding up during the preceding 12 months. Said meeting shall continue to be called by the liquidator each successive year thereafter (or as the Registrar may allow) until the company is finally liquidated.

Once the affairs of the company are fully wound up, the liquidator shall prepare an account of the winding up and shall draw up a scheme of distribution indicating the amount due to each shareholder according to his holding in the company, following which, the final liquidation accounts shall be prepared and audited by the appointed auditor.

During such time, the liquidator will be in a position to prepare and submit the final tax return of the company, and is required to ensure that the Commissioner for Revenue (CFR) de-activates the tax registration number so that no future requirements for company tax returns will be issued to the company.

Strike off

For the purposes of approving the audited accounts and the scheme of distribution, the liquidator must convene a general meeting, and within 7 days after the said meeting, the accounts and the scheme of distribution are to be submitted to the Registrar of Companies, together with a liquidator’s return in which the liquidator shall inform the Registrar of Companies that the winding-up process has been completed and request therein that the company’s name be struck off the Maltese Register of Companies (the “Register”).

Upon receipt of the above-stated documents, the Registrar shall proceed without delay, (normally within 21 days from receipt of the documents), to register the documents, and to publish a statement in the Government Gazette or on a website maintained by the Registrar, announcing the company’s liquidation and the striking off of the company’s name, and shall grant a period of 3 months during which any interested person/s may bring forth any claims opposing same.

Following the lapse of the stated 3-month period, and assuming no objection would have been filed during the said time, the Registrar will proceed to strike the name of the company off the Register. 

In the event that an application is filed with the court by any interested person within the said 3-month period, the court may make an order deferring the date at which the name of the company shall be struck off the Register for such time and subject to such conditions as the court may provide.

It is worthy to point out that throughout the liquidation process up to the moment of strike off, a company retains its juridical existence. In effect, it is at the point in time that the name of the company is struck off the Register that the company ceases to exist.


Without prejudice to the above, Maltese law provides that where a company has been struck off the Register, any interested person, may by application, request the court to order that the name of the company be restored to the Register and the winding up be reopened, and if the court is satisfied that the winding up and striking off of the company has been vitiated by fraud or material illegality (for example where a creditor’s claim was not taken into account), it may order that the name of the company be restored to the Register and the winding up be reopened for such purposes and such time as it shall specify, and it may give such directives and impose such conditions as it deems appropriate. Note however, that any such application must be brought within 5 years from the striking off of the company’s name from the Register, and the court will only accede to such request if there is no other remedy available.

Therefore, it is only in very exceptional circumstances, and for a defined and limited period and purpose, that a company may be revived once it has been struck off the Register. In effect, once the process of liquidation has been initiated, it cannot be stopped nor reversed.

Sarah Grima is an Associate at Fenech & Fenech Advocates, Malta: