Malta · Dissolution, winding up and company recovery

Dissolve the company and run a members' or creditors' voluntary winding up

the Companies Act, Chapter 386 · articles 214, 214A, 265, 267 and 268, articles 270 to 274, articles 278, 279 and 281 to 284, articles 288 to 290 and 300, 305 and 306, and articles 317, 319, 320, 322, 324, 407 and 420

The declaration of solvency decides which of the two voluntary procedures you are in, and it has no effect unless it is made in the way and within the time article 268(2) requires. A declaration made late or without reasonable grounds turns a members' voluntary winding up into a creditors' one, with a different set of duties from that point.

The second trap is the closing sequence. The liquidator has fourteen days from appointment to notify the Registrar and seven days after the final meeting to send the account, the scheme of distribution and the return. A liquidator who does not qualify under article 305 is not validly acting at all.

Where a company has passed a resolution in accordance with article 214(1), article 214(6) applies. An application under article 214A is made by the prescribed form under article 214A(3), the directors confirming the matters in article 214A(4) in their personal capacity, and the directors and secretary retaining their powers under article 214A(5). When a company has passed a resolution for dissolution and consequential voluntary winding up, article 265(1) applies. In a voluntary winding up the company is subject to article 267(1) from the date of dissolution. A declaration made under article 268(1) has no effect unless the conditions in article 268(2) are met.

The company must by extraordinary resolution appoint a liquidator under article 270(1), with article 270(2) applying except where a liquidator was appointed at the meeting named there, and article 270(3) applying if no liquidator is appointed by the general meeting. A vacancy by death, resignation or removal is filled under article 271(1), the general meeting being convened as article 271(2) requires and held as article 271(3) provides. If the liquidator forms the view described in article 272(1), that provision applies. In the event of the winding up continuing, article 273(1) applies subject to article 276. As soon as the affairs of the company are fully wound up, the liquidator acts under article 274(1), and within seven days after the meeting sends to the Registrar the account, the scheme of distribution and the return required by article 274(2); failure to call the meeting is dealt with under article 274(3).

In a creditors' voluntary winding up the directors must cause a meeting of the creditors to be held under article 278(1), do the things required by article 278(2), and the director appointed to preside has the duty in article 278(3); notice of the meeting is given as article 278(5) requires. Where no person is nominated to act as liquidator, article 279(2) applies. The liquidation committee or the creditors act under article 281, a vacancy is filled under article 282, and where the winding up continues for more than twelve months article 283(1) applies. As soon as the affairs of the company are fully wound up the liquidator acts under article 284(1) and within seven days after the meetings sends the account, the scheme of distribution and the return under article 284(2).

The liquidator must pay the debts of the company and adjust the rights of the contributories as article 288(2) requires. A person who applied to the Court under article 289(2) is subject to article 289(3). The liquidator must, within fourteen days after his appointment, deliver to the Registrar a notice of his appointment stating his name and residence (article 290(1)). On resignation the liquidator delivers what article 300(1) requires, and removal by extraordinary resolution or by resolution of the creditors is dealt with under article 300(3) and (4). A person is not qualified to act as liquidator unless article 305(1) is satisfied, subject to article 305(2), and a liquidator is prohibited from transferring or disposing of property as article 306(1) provides.

Except with leave of the court, article 317(2) applies. If it appears to the liquidator in the course of a voluntary winding up that the circumstances in article 319 exist, that provision applies. A disqualification order has the meaning in article 320(4), and where the conduct described in article 322(1) is found, that provision applies. The liquidator must keep the accounts, accounting records and documents as article 324(2) requires. Where inspectors are appointed, the duties in article 407(1) and (2) apply, and no information or document may be disclosed except as article 420(1) permits.

Files 51, 56, 57, 58 and 59 of the MT-COMPANY pack run the voluntary route. File 51 asks for the date of the resolution, whether a declaration of solvency was made and on what date, and applies article 268(2) to decide whether you are in a members' or a creditors' winding up. Files 56 and 57 then follow the branch you are actually in, each asking for the date of the final meeting and the date the account and the return reached the Registrar so that the seven days in article 274(2) or article 284(2) can be measured. File 58 checks the liquidator's qualification under article 305, the fourteen-day notice of appointment under article 290(1) and any resignation or removal. File 59 covers cooperation during an investigation, disqualification and the retention of records.

This situation is covered by these files from the pack MT-COMPANY

• File 51 · Dissolution and consequential voluntary winding up: resolution, notice and the declaration of solvency
• File 56 · Members' voluntary winding up: the liquidator, vacancies, meetings and the final account
• File 57 · Creditors' voluntary winding up: the creditors' meeting, the liquidator and the final account
• File 58 · Every voluntary winding up: qualification, vacancy, resignation and removal of a liquidator, and prohibited transfers
• File 59 · Conduct during an investigation or a winding up: cooperation, confidentiality, disqualification and retention of records

ComplianceSME tracks the Companies Act and issues update files through the membership, so that you are never working from a superseded version. Membership

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