Company Liquidation and Dissolution in Malta: A 2026 Guide

By the EGM Assurance Editorial Team . Last reviewed April 2026 . 13 min read

Closing a Maltese company is a structured legal process governed by the Companies Act (Cap. 386). There are three principal routes: members' voluntary winding up (where the company is solvent), creditors' voluntary winding up (where it is insolvent), and court-ordered winding up (compulsory, typically on creditor petition). A fourth route - the simplified dissolution procedure under Article 214A - was introduced into the Companies Act on 16 December 2025 by Legal Notice 286 of 2025, and is available to dormant private limited companies meeting specific conditions.

The process is sequential: it begins with a shareholders' resolution (or director application under Article 214A), moves through an orderly winding-down under a licensed liquidator (or through the simplified procedure without one), and ends with the company being struck off the MBR register. This guide reflects the position at April 2026.

1. Overview of the four routes

Related guides: Share Transfers in Malta: A Complete Director's Guide

2. Members' voluntary winding up (MVW)

Step 1: Declaration of solvency (Form B(2))

Before commencing an MVW, a majority of the directors must make a statutory declaration of solvency - Form B(2) - confirming they have made a full inquiry into the company's affairs and that, in their opinion, the company will be able to pay its debts in full within a period not exceeding 12 months from the commencement of the winding up. The declaration must include a statement of assets and liabilities. Making a false declaration of solvency is a criminal offence and exposes the declarant directors to personal liability for the company's debts.

If, after the winding up commences, the liquidator concludes that the company will not in fact be able to pay its debts within 12 months, the winding up automatically converts to a creditors' voluntary winding up.

Step 2: Extraordinary resolution

Shareholders pass an extraordinary resolution - requiring a 75% majority - resolving that the company be dissolved and put into liquidation. The resolution specifies the date of dissolution and appoints the liquidator. It must be filed with the MBR within 14 days of being passed.

Step 3: Appointment of liquidator

On dissolution, the powers of the directors cease entirely. The liquidator takes over the management and representation of the company for the purposes of the winding up. The liquidator files Form L1 (acceptance of appointment) with the MBR, and the company is marked "in dissolution" on the register from that point.

Who can act as liquidator

Under Article 305 of the Companies Act, a liquidator must be a Maltese advocate (lawyer), a certified public accountant and auditor, or a person registered as fit and proper with the MBR for this purpose. A person who has held the office of director, company secretary, or any other appointment in connection with the company at any time during the four years prior to the date of dissolution is disqualified from acting as liquidator of that company. This disqualification rule is frequently overlooked: the company's own accountant or auditor, if they have previously held a formal appointment with the company, cannot serve as liquidator.

Step 4: Winding-up activities

The liquidator's mandate is to realise the company's assets, settle its liabilities and distribute the net proceeds to shareholders. Key activities include:

• Identifying and collecting all assets.

• Notifying creditors and inviting claims.

• Settling debts in priority order: liquidation expenses first, then secured creditors, then preferential creditors (employees' wages and holiday pay up to statutory limits, and certain MTCA arrears), then unsecured creditors pari passu, then any surplus to shareholders.

• Preparing final accounts showing how the winding up was conducted and how assets were disposed of.

• Deregistering the company from the MTCA (income tax), VAT and FSS.

Where the winding up continues for more than 12 months, the liquidator must call a general meeting of the company at the end of each 12-month period and present a progress report. Shareholders holding not less than one-tenth of the paid-up share capital may also request such a meeting at any time.

Step 5: Final accounts, audit and final meeting

When the winding up is complete, the liquidator prepares final accounts covering the conduct of the winding up and the disposal of assets. These accounts must be audited by an independent auditor. The liquidator then convenes a final general meeting of shareholders to lay the accounts before them. The audited accounts and auditor's report are presented at this meeting.

Step 6: Filing and striking off

Following the final meeting, the liquidator submits the accounts and notice of the meeting to the MBR Registrar. The Registrar publishes a notice in the Government Gazette. Any interested party may file a court objection within three months of publication. In the absence of any objection, the company is struck off the register on the expiry of that three-month period and is dissolved.

3. Creditors' voluntary winding up (CVW)

A CVW is triggered when the directors cannot make a declaration of solvency - the company is insolvent and cannot pay its debts within 12 months. The general framework mirrors the MVW, with additional creditor-protective steps:

• Shareholders pass an extraordinary resolution to wind up the company.

• A creditors' meeting must be convened within 14 days of the shareholders' resolution. Creditors are notified in writing and by public notice. A detailed statement of affairs and a list of creditors must be laid before the meeting.

• Creditors may nominate a liquidator at their meeting. If creditors nominate a different person than the shareholders nominated, the creditors' nominee takes precedence.

• The liquidator must investigate the company's affairs and report to creditors on the causes of insolvency.

• Progress reports and accounts are presented at a meeting of creditors at the end of each 12-month period.

• The order of priority for payment is: liquidation expenses first, then secured creditors, then preferential creditors (employees' wages and holiday pay up to prescribed limits, certain MTCA arrears), then unsecured creditors, then any residual to shareholders.

4. Court winding up (compulsory)

A court winding up is initiated by petition to the Civil Court (Commercial Section). Any of the following may petition: the company itself, a creditor, a contributory (shareholder), or the MTCA. The principal grounds are:

• Inability to pay debts - a company is presumed unable to pay if a judgment creditor has not been satisfied, or if the company fails to pay a debt within 21 days of a statutory demand for payment.

• Just and equitable - covering shareholder deadlock, oppression of minority shareholders, fraud, or fundamental failure of the company's commercial substratum.

Once a winding-up order is made, all proceedings against the company are stayed. The court-appointed liquidator takes over completely. Actions taken by the company after the presentation of the petition are generally void without court consent. Court liquidations are slower and more expensive than voluntary routes, requiring court hearings at each significant stage.

5. Article 214A simplified dissolution

Article 214A was introduced into the Companies Act by Legal Notice 286 of 2025, which came into force on 16 December 2025. It provides a fast-track dissolution route for dormant private limited liability companies, without the need to appoint a liquidator. The statutory forms required for an Article 214A application were also published on 16 December 2025.

Eligibility conditions

A company may apply for simplified dissolution under Article 214A provided it satisfies all of the following:

• The company has been validly registered with the MBR for at least six months.

• The company is not a public limited company (plc) and is not regulated by any specific Maltese law (so MFSA-licensed entities are excluded).

• In the six months immediately preceding the application, the company has not: carried on trading or any other business activity; changed its shareholders or directors; entered into any deeds or contracts (other than with company service providers); had any of its shares pledged.

• All liabilities to creditors have been fully discharged, or written off by the relevant creditors - except fees due to company officers or CSPs, and loans payable to shareholders.

• There are no pending court or judicial proceedings involving the company, whether in Malta or overseas.

• The company holds assets not exceeding EUR 5,000 in value at the date of application.

• No sums are due to any governmental authority or body.

• The company is in compliance with all MBR filing obligations and has no outstanding penalties.

The process

Directors file an application using the prescribed statutory forms, accompanied by a directors' declaration confirming all eligibility conditions are met. A false or misleading declaration exposes the directors to criminal liability. The Registrar reviews the application and, if satisfied, publishes a notice in the Government Gazette and a daily newspaper. The company's name will be struck off after a three-month notice period, during which any creditor or interested person may object. If no objection is raised, the company is dissolved and struck off on expiry of the three months.

6. Pre-liquidation checklist

Before commencing any winding-up route, directors should confirm the following. Gaps at this stage cause delays and add cost during the process:

• All annual financial statements and tax returns are filed and up to date with both the MBR and the MTCA.

• All VAT, FSS and SSC obligations are fully settled or formally agreed with the relevant authorities.

• All assets have been identified and documented: bank balances, receivables, fixed assets, intellectual property, security deposits.

• All contractual obligations have been reviewed to identify any that survive dissolution: property leases, software licences, supplier agreements, personal guarantees given by the company.

• Employees have been formally notified and their entitlements calculated: notice periods, outstanding salary, accrued holiday pay, any redundancy obligations.

• The company's MBR record is fully current: annual return and financial statements filed, BO register accurate and up to date.

• Any shares pledged as security have been identified - pledged shares may complicate dissolution and specifically block Article 214A eligibility.

• The intended liquidator has been confirmed to be legally eligible - in particular, that they have not held any formal appointment with the company in the four years prior to dissolution.

7. Frequently asked questions

How long does a members' voluntary winding up take?

For a straightforward company with limited assets, a settled creditor position and clean records, an MVW typically takes between 12 and 18 months from the shareholders' resolution to striking off. The main time drivers are: the time needed to realise assets and settle creditors, the audit of the final accounts, and the three-month Government Gazette notice period before striking off. Companies with property, litigation, complex creditor positions or outstanding tax disputes will take longer.

Can a director act as the liquidator of their own company?

No. Article 305 of the Companies Act disqualifies any person who has held office as director, company secretary or in any other formal capacity in connection with the company during the four years prior to dissolution from acting as its liquidator. The liquidator must be an independent advocate, certified public accountant and auditor, or other MBR-registered fit and proper person. Appointing a disqualified person as liquidator is a Companies Act breach.

Can the company continue trading during the winding-up period?

Once the winding-up resolution is passed, the company should cease trading - the liquidator's mandate is to wind down, not to develop new business. The liquidator may continue business operations briefly where necessary to achieve a better realisation of assets - for example, to complete an existing contract or maintain business value pending a sale. Any such continuation must be in the interests of the creditors and shareholders, and the liquidator carries personal responsibility for decisions taken during this period.

What happens to employees when a company is wound up?

Employees' contracts are terminated on commencement of the winding up or when the liquidator gives notice. Employees are preferential creditors for wages and holiday pay up to the prescribed statutory limits; amounts above those limits rank as unsecured claims. The liquidator must file FSS deregistration with the MTCA and Jobsplus termination forms for each employee. All payroll obligations (salary, SSC, holiday pay) should be settled or clearly quantified before the winding up begins.

Can a winding up be reversed once started?

An MVW can convert to a CVW if the liquidator determines the company is insolvent. A CVW can theoretically be discontinued if all creditors are paid in full and solvency is restored - in practice this is very rare. A court winding up can only be stayed by a court order. Any reversal of a winding up in progress is procedurally complex and expensive, and in the CVW and court contexts requires creditor consent and court approval.

Who bears the cost of the liquidation?

Liquidation expenses - the liquidator's fees, the auditor's fee for the final accounts, legal costs, MBR fees and publication costs - are paid from the company's assets as the first priority, before any creditors or shareholders receive anything. Where assets are insufficient to cover even the liquidation expenses, the shortfall may need to be funded by shareholders (in an MVW) or may result in the liquidator seeking a court order. This is a practical reason why the pre-liquidation checklist matters: confirming there are sufficient assets to fund the process before commencing it.

Can Article 214A be used if the company has a bank account with a small balance?

Potentially yes, if the total value of all assets (including the bank balance) does not exceed EUR 5,000 at the date of application. The EUR 5,000 cap applies to the aggregate value of all assets, not to any single asset. If the bank balance alone exceeds EUR 5,000, the company does not qualify for Article 214A and must use the standard MVW route instead. Any remaining assets at the point of dissolution under Article 214A vest in the Government of Malta, so directors should ensure assets are properly distributed before applying.

Related guides from EGM Assurance

• Simplified Liquidation in Malta: Article 214A Guide

• Corporate Filings and Beneficial Ownership: Directors' Guide

• Statutory Audit in Malta: 2026 Guide for SMEs

• Payroll and FSS Obligations for Maltese Employers

Authoritative references

• Companies Act (Cap. 386), Articles 214, 214A, 270, 305

• Legal Notice 286 of 2025 (Article 214A in force from 16 December 2025)

• Malta Business Registry - winding-up forms and guidance

• Civil Court (Commercial Section) - court winding-up petitions

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This article is prepared by EGM Assurance for general informational purposes and reflects the legal and regulatory position in Malta as at April 2026. It does not constitute legal, tax or professional advice. Always confirm current obligations with a qualified professional before acting.