Introduction of the Simplified Dissolution Regime

This legislative development was specifically intended to provide an efficient and cost-effective mechanism for the voluntary closure of dormant private limited liability companies, eliminating the requirement for the appointment of a liquidator and the conduct of a formal winding-up process.

Scope and Applicability

Article 214A permits a company that has been duly registered for a minimum period of six months to apply to the Registrar of Companies for dissolution and striking off from the register. The availability of this procedure is, however, expressly restricted to private limited liability companies. Public companies and entities subject to regulatory supervision are excluded from its scope and remain governed by the more stringent dissolution regimes applicable to such entities.

An important feature of Article 214A is the removal of the requirement to appoint a liquidator. Instead, the directors and company secretary remain vested with their statutory powers and obligations until such time as the company is formally struck off the register. Responsibility for compliance with all statutory prerequisites therefore rests with the directors.

Upon being satisfied that the statutory conditions have been met, the Registrar is required to publish a notice in the Government Gazette or on the website maintained by the Registrar and in a daily newspaper indicating that the company’s name shall be struck off the register following the lapse of a three-month period from publication. This notice period mirrors the creditor protection timeframe applicable under Article 214 of the Companies Act and ensures that any creditor with an existing claim may lodge an objection within the prescribed period.

The framework also allows for the restoration of the company to the register at the request of any interested party, thereby safeguarding creditors and affected stakeholders. Crucially, the striking off of the company does not extinguish the liabilities of its directors, officers or members, and any false declaration made in connection with the procedure constitutes a criminal offence punishable by imprisonment or a monetary fine.

Eligibility

Article 214A(2) establishes a number of disqualifying circumstances. In particular, the procedure is unavailable where, during the six months immediately preceding the application, the company has:

• effected a change to its registered name;
• engaged in trading or otherwise carried on business activities;
• employed any persons other than its officers;
• outstanding documents or penalties with the Registrar which remain outstanding as at the date of the application; or
• had any of its shares encumbered by pledge or security.

In addition, eligibility for the simplified dissolution procedure is contingent upon the directors formally confirming, by means of the prescribed form, that the company satisfies all of the following criteria:

• it is not a regulated entity;
• it has fully discharged all liabilities towards its creditors, except for remuneration due to its existing officers or corporate service providers, and any shareholder loans;
• it is not a party to any pending judicial proceedings, whether in Malta or outside of Malta;
• it does not hold assets exceeding a total value of €5,000;
• it has not entered into deeds or contractual arrangements within the preceding six months, other than those related to corporate or professional services;
• it has no outstanding obligations towards any governmental authority or public body;
• its shareholders have approved, by resolution, the adoption of the simplified voluntary dissolution procedure;
• all bank accounts, if any, have been closed;
• where applicable, it has been deregistered for value-added tax purposes in Malta; and
• it does not employ any individuals other than its officers.

Furthermore, the directors, acting in their personal capacity as the last appointed officers of the company, must confirm to the Registrar that arrangements have been made for the lawful retention of beneficial ownership information and accounting records, or alternatively identify the person designated to retain such records in accordance with applicable law. From a tax compliance perspective, final tax returns are also required in order to obtain tax clearance and formally close the company’s tax number.

Concluding Remarks

The introduction of Article 214A marks a welcome and practical evolution in Maltese company law, providing a streamlined mechanism for the voluntary dissolution of dormant private companies. By removing the need for a liquidator, the procedure significantly reduces time, cost and administrative burden, while remaining firmly anchored in creditor protection and director accountability.

Through strict eligibility requirements, a mandatory notice period and the continued enforceability of directors’ and members’ liabilities, the legislator has achieved a measured balance between efficiency and legal safeguards. Article 214A is therefore poised to become a key instrument for the orderly and compliant closure of inactive corporate entities within the Maltese legal framework.