A number of amendments to the Maltese Companies Act were enacted by means of Act XVIII of 2025 on 11 July, 2025. This article analyses some amendments which have significant practical significance for the business community as well as for corporate law practitioners and service providers.
Simplified liquidation procedure
One of the main changes to the Companies Act is the introduction of a simplified liquidation procedure which can be used by companies in lieu of a voluntary members winding up. The rationale behind the new procedure is to enable a number of companies which have ceased to trade or never traded to have a fast track method of being struck off the Registry of Companies.
Unfortunately, many liquidations in Malta take too long to be concluded, and it is quite common for a voluntary members winding up to take years to complete, if ever. The new Simplified Liquidation Procedure should dramatically reduce the timeframe within which a good number of companies are struck off the register when there is no need for them to continue to exist.
These procedures are similar to the Voluntary Strike Off procedures which have been in place in Ireland for a number of years, and which one also finds in other jurisdictions as an alternative to a fully fledged winding up process. Statistics in Ireland reveal that the larger part of companies being struck off the Register go through a voluntary strike off process.
Which companies qualify?
In order to be able to make use of this fast track procedure, a Maltese company must have been incorporated for at least 6 months. The procedure cannot be availed of by public companies or by regulated entities.
During the 6 months prior to filing an application for the simplified liquidation process, the company must ensure that it :
- did not trade
- did not change its name
- had no employees (other than directors or other officers)
- filed all required documents at, and paid all penalties which were due to, the Malta Business Registry
- none of its shares are pledged.
Application process
In order to set in motion the simplified liquidation procedure, the following documents are to be filed at the Malta Business Registry :
- the statutory Form B1 which is to be adapted to cater for such simplified process;
- a new Statutory Form through which the company's
directors will confirm that the company:
- is not a regulated entity;
- has no creditors other than its shareholders or its current officers or service providers;
- has no pending litigation;
- does not have any assets in excess of Euro 5,000;
- did not enter into any deeds or contracts in the previous six months (other than with its service providers);
- has no outstanding amounts due to any government entity (including the Maltese tax authorities); and
- had no employees (other than its officers);
- confirmation by any of the company's directors that :
- the simplified dissolution has been approved by a properly adopted shareholders' resolution;
- the company has closed all bank accounts (if any); and
- if applicable, an application has been filed online for the company's de-registration for Maltese VAT purposes;
- confirmation by all the directors that they will retain the details of the beneficial owners and financial records as mandated by law. Alternatively, they must inform the Registrar as to who is the designated person to retain such information.
Effects of application
Upon receipt of an application for a simplified liquidation of a company, the Malta Business Registry will publish a Notice to that effect in a daily newspaper and on the Registry's web portal. The company will then be struck off after 3 months from publication of the Notice unless any creditor would have sought and obtained an order by the Maltese courts to stop the liquidation from being completed on the lapse of the said 3 month period.
The new procedure provides further protection to any aggrieved creditors of the company since creditors can also request the Maltese courts to order the restoration of the company even after the company has been struck off.
What happens in the interim period?
Until such time as the company is struck off, the directors and secretary of the company retain all their powers and duties. This is different to the situation of a voluntary members winding up where their powers cease and are taken on by the liquidator upon his appointment.
Abandonment of registered office
Article 425 of the Companies Act has been amended so as to extend the Minister's powers to issue regulations. Such regulations may now be issued for the better carrying out of any of the provisions relating to the registered office of a company.
This important amendment paves the way to address a long standing problem faced by corporate service providers who no longer wish to provide registered office services to a particular company. There may be a number of valid reasons as to why a service provider would want to cease to provide a registered office service..
A Legal Notice may now be issued in order to enable corporate service providers to file a statutory form notifying that they no longer provide registered office facilities to a company.
Issue of shares for a non cash consideration
In terms of article 73 of the Companies Act, any company issuing shares for a non cash consideration can only do so if an Experts Report is first filed at the Malta Business Registry by a Maltese auditor. The recent amendments reduce burdens and costs for smaller companies by removing the need of such valuation and auditor's report where the monetary value of the non-cash consideration does not exceed €50,000. A director declaration to the same effect will suffice in lieu of such a report in such instances.
Partnerships
Partnerships are funded by contributions of the partners (as distinct from the issuance of shares by a company). A change in contributions would normally necessitate a change to the partnership deed and filing thereof at the Registry. As it is likely that partnerships are regularly funded throughout the year by multiple contributions (rather than debt) by the limited partners, it would be impractical for the partnership deed to be amended and re-filed every time the contributions are increased. The amendments provide that every increase in contributions will become immediately effective without the need of changing the partnership deed. However, and again in order to have certainty and transparency, the general partner must by no later than 31 March after the year in which the contributions are effected, file a Resolution of the partners where they confirm the aggregate of the contributed amounts which were received as such by the partnership.
Further evolution
The above amendments introduced by Act XVIII of 2025 are positive developments as a result of constructive collaboration between all relevant stakeholders, including the Malta Business Registry and representatives of practitioners. This public-private collaboration is instrumental for the continued updating of the Companies Act as commercial realities evolve quickly over time.
This article was first published on the Sunday Times on 03/08/2025.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
