Struck Off as Defunct

Companies in Malta may be struck off the register as defunct when they cease operations or stop conducting business. The principal reasons for a company’s inactivity may vary, but it is most commonly linked to the resignation of directors without replacement, failure to file the Annual Returns and the audited financial statements, or the complete cessation of operations.

The Malta Business Registry (MBR) oversees company compliance and has authority to investigate and remove defunct entities. When the MBR identifies an inactive company, it formally notifies the entity of its intention to strike it off. If the company fails to respond or comply within the stipulated timeframe, it will be officially removed from the public register.

A critical distinction: Striking off removes a company’s registration status but does not formally liquidate it. Outstanding liabilities, unresolved debts, and assets continue to exist and must still be addressed.

Once struck off, a company loses legal capacity to operate. It cannot enter contracts, conduct financial transactions, or engage in legal matters. Directors face potential personal liability if the company is struck off while carrying unresolved debts.

Allowing a company to become defunct can trigger far-reaching consequences, possibly negatively impacting former business partners, creditors, shareholders, and the broader business community.

Companies struck off can be revived through court application, typically within five years of the striking-off notice. If the Court determines valid grounds exist, it may issue an order to restore the company to the register, potentially with conditions.

Rather than abandoning a company, owners should either restore it to active status and proceed with formal liquidation, or maintain ongoing good standing to prevent being struck off. Abandonment is never the answer—it creates legal limbo where liabilities persist but the company cannot operate or defend itself, leaving directors personally exposed.