For various reasons such as retirement, new career challenges or illness, an entrepreneur may decide to wind up his or her business. Unless it involves a transfer of the business, winding up usually includes the following steps:
- Notifying the body that initially registered the business to cancel the business licence or employers' entry in the register;
- Complying with social security and tax obligations;
- Selling off plant, stock and office equipment;
- Paying off any outstanding business debts.
LEGAL OBLIGATIONS
Maltese law obliges any business owner to legally dissolve the business when closing down. There are 3 types of dissolution:
- Voluntary Liquidation
- Enforced Dissolution
- Bankruptcy
COMPANY DISSOLUTION
- The shareholders must take a resolution to dissolve and wind up the affairs of the company.
- This resolution must be taken by the shareholders during a general meeting.
- A notice of dissolution must then be sent to the Registrar of Companies and must be delivered to the Registrar within 14 days from the date of dissolution.
- The business must also appoint a liquidator, within a maximum of 30 days, from the date of dissolution. The liquidator is entrusted with winding up the affairs of the company and distributing the assets of the company.
SOCIAL SECURITY DEREGISTRATION
In order to deregister from the Social Security scheme, one has to visit the Department and fill in the applicable form.
TAX DEREGISTRATION
In order to de-register from VAT a registered person is required to call at the Customer Care Unit of the Department to fill in the appropriate form.
In order for the application for de-registration to be processed a registered person is required to settle all pending matters with the Department.
It is pertinent to point out that if the registered person is classified as a non-exempt person he shall be deemed to have, immediately before the cancellation of his registration, supplied to himself all the remaining business assets that belonged to his business. In this regard he must account for the VAT due thereon in his last VAT return.
LEGAL TEXTS
Companies Act 1995
Commercial Code 2008, Chapter 13, Act II
Consumer Affairs Act 1994
Malta Standards Authority Act 2000, Chapter 419
Business Promotion Act 2001, Chapter 325
Malta Enterprise Act 2003
Competition Act 1995, Chapter 379 (1995)