Simplified Liquidation Procedure: A Faster Way to Close Inactive Companies in Malta

On 16 December 2025, significant amendments to the Companies Act came into force, introducing a Simplified Liquidation Procedure for eligible Maltese companies. This new framework provides a streamlined and cost-effective alternative to traditional voluntary winding-up procedures, addressing long-standing concerns around the time, complexity, and expense involved in closing down inactive or dormant companies.

Historically, companies wishing to cease operations were required to undergo either a Members’ Voluntary Winding Up or a Creditors’ Voluntary Winding Up. Both procedures involve the appointment of a liquidator and can take a considerable amount of time to conclude, even where the company has minimal assets, no employees, and no ongoing activity. For many small or dormant companies, this process was often disproportionate to their size and circumstances.

The newly introduced Simplified Liquidation Procedure, implemented through Article 214A of the Companies Act, aims to resolve this issue by allowing qualifying companies to be dissolved without undergoing a full liquidation process. The procedure is designed specifically for companies with limited activity and low risk to creditors, enabling them to be struck off the register in a more efficient manner.

Eligibility Criteria

Only certain companies may benefit from this simplified route. To qualify, a company must be a private company and must have been incorporated for at least six months. It must not have carried out any trading or business activity in the six months preceding the application, nor changed its name during that period. Additionally, the company must not have employed anyone other than its directors or officers, must have no pledged shares, and must be fully compliant with all statutory filing requirements. Any outstanding penalties due to the Malta Business Registry must also be settled prior to applying.

These eligibility conditions ensure that the procedure is restricted to companies that pose minimal risk to creditors and other stakeholders.

How the Process Works

The simplified liquidation process is initiated through a resolution of the company’s directors, confirming that all eligibility criteria are satisfied. The necessary documentation is submitted electronically through the Malta Business Registry’s online system.

Once the application is accepted, a notice is published indicating the company’s intention to be struck off the register. This is followed by a three-month notice period, during which any interested parties or creditors may raise objections. If no objections are received within this timeframe, the Registrar proceeds to strike the company off the Register of Companies, at which point the company is formally dissolved.

A key feature of this process is that no liquidator is appointed, significantly reducing both professional fees and administrative requirements.

Key Benefits and Considerations

The Simplified Liquidation Procedure offers several advantages, including reduced costs, faster completion, and less administrative burden. It provides directors and shareholders with a practical solution to close companies that are no longer required, while also contributing to a cleaner and more accurate company register in Malta.

That said, directors remain responsible for ensuring that all legal and compliance obligations are fully met before initiating the process. Any inaccuracies or outstanding issues may result in delays or rejection of the application.

Overall, this new procedure represents a welcome development in Malta’s corporate law framework, offering a modern and efficient solution for winding down inactive companies.

Get in Touch:

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Matthew Aquilina

maquilina@quazar.mt / +356 2388 4600