This article forms part of a series exploring key procedures and rights under the Companies Act (Chapter 386 of the Laws of Malta) in the context of company liquidation. While not every step requires a direct court application, creditors and other stakeholders still play an active role in shaping the process.
When a company is being wound up by the court, a liquidation committee may be appointed to oversee and support the liquidator’s work. This committee is typically made up of creditors and is meant to safeguard the interests of those with a stake in the company’s remaining assets.
But what happens if creditors fail to appoint one?
Under Article 246(2) of the Companies Act, a contributory (i.e., a shareholder) may be empowered to act. If the meeting of creditors does not appoint a liquidation committee, the meeting of contributories may nominate one of their own to file a court application, requesting an order for the liquidator to summon another creditor’s meeting for the purpose of appointing such a committee.
This provides shareholders with a practical legal route to prompt creditor oversight, especially in cases where there may be concerns about how liquidation is being managed or where increased transparency is needed.
Where no liquidation committee is ultimately appointed, the Companies Act provides that the Official Receiver may assume its functions under Article 247, if so requested by the liquidator.
While the court’s role here is limited to directing the liquidator to act, it serves as an important safeguard in the winding-up process, giving minority stakeholders a voice when it matters the most.
More from this series:
This document does not purport to give legal, financial or tax advice. Should you require further information or legal assistance, please do not hesitate to contact Dr Jonathan Abela Fiorentino.