What If The Liquidator Isn’t Doing Their Job? Your Right To Complain In Court

This article is part of a series exploring court actions available under the Companies Act (Chapter 386 of the Laws of Malta). Each article gives a practical overview of a specific legal remedy or procedure involving court supervision, outlining when it applies, the steps required, and the purpose behind it. It is intended as a useful reference point rather than an in-depth academic analysis.

Once a liquidator is appointed to wind up a company, creditors and contributories often assume that the process will proceed smoothly. But what happens when it does not?

Under Article 243(1) of the Companies Act, any creditor or contributory may file an application before the court complaining about the conduct of a liquidator. The court will then inquire into the matter and may take any action it deems appropriate, depending on the circumstances.

This provision ensures that stakeholders are not left powerless where, for example, the liquidator fails to act impartially or transparently, delays the winding-up without reason, mismanages company assets or communications, or otherwise raises concerns about competence or integrity.

In parallel, the Registrar of Companies is also empowered under Article 243(2) and (3) to oversee liquidators in court-supervised winding-up. The Registrar may question the liquidator on any aspect of the process, apply to the court to examine the liquidator or other persons under oath, and direct a formal investigation into the liquidator’s accounts and records, where appropriate.

If you’re concerned about the way a liquidation is being handled, you have a legal right under Article 243 to bring those concerns before the court. These safeguards ensure that the liquidation process remains accountable and that liquidators do not operate without oversight, whether from creditors, contributories, the court, or the Registrar.