A company shall cease to exist upon the completion of procedures as noted in Maltese law. novolegal provides advice on the best way to have a company dissolved, wound up and finally struck off the Register of Companies.
The complete procedure for bringing about a lawful termination of a company is divided into two steps- ‘winding up’ and ‘dissolution’. Winding up is the first step in the process whereby assets are released, liabilities are paid off and the surplus, if any distributed among its members. Dissolution is the last stage whereby the company ceases to exist. It can hence be said that there are 3 main steps in the liquidation process:
There are 3 forms of dissolution: members voluntary winding up, creditors voluntary winding up and winding up by order of the court.
Members Voluntary Winding up: It is the members who by virtue of an extraordinary resolution, place the company into dissolution and consequential voluntary winding up. The Directors of the company are duty bound to look into the current state of affairs of the company and should the assets exceed liabilities within the upcoming 12 month then a declaration of solvency will be formulated and filed with the Registrar, together with a notice of dissolution and a statement of the company’s assets and liabilities and the liquidator then takes over the winding up process.
Creditors voluntary winding up: There may be a scenario where the liabilities exceed the assets and therefore different procedures, pertaining to creditors voluntary winding up, apply. The creditors voluntary winding up is also initiated by the members in those cases in which no declaration of solvency is filed by the directors.
Winding up by the Court: The shareholders may by extraordinary resolution decide that the company is wound up by the court. A company may be dissolved and wound up by the court:
On the other hand, the court has the power to order a dissolution in the following cases:
Although the law envisages slight differences in the process for the different forms of dissolution, the liquidation process namely involves the closing of the accounts due and submission of financial statements, any other forms due to be submitted to the competent authority, the liquidator is appointed and the company is eventually struck off.
novolegal has the expertise to provide clients with advice throughout the liquidation process and will inter alia: