A company which is owed money from a company which has been struck off the Companies Register may ask the Court to revive the company in order to proceed against it.
This was held in a judgement delivered before the Civil Court (Commercial Section) in GBCom Limited vs Companies Registrar on 1 March 2024. Mr Justice Ian Spiteri Bailey presided over the Court.
The Company asked the court in its application for Afegra Finance Limited to be reinstated in the register of companies in terms of Article 325(4) of the Companies Act after it was struck off the register. Afegra is a defendant in a court action that GBCom instituted. GBCom is asking the court to order Afegra and other companies to pay it USD500,000. In June 2021, Afegra was removed from the register of companies since it was considered as defunct. GBCom has an interest to revive the company, since it owes a larger sum than mentioned above.
The Registrar of Companies filed a statement of defence and explained that Afegra was registered in March 2010. Furthermore, the company failed to file the annual returns as per the Companies Act. The last annual return was filed in 2015 with regard to the annual return of 2011. The financial statements were of 2018. The company was informed of its failings and that the company was to be struck off. No reply was received and therefore the Registrar had no option but to proceed with the striking off. The Registrar explained further to the Court that it has no control over how companies act and that how they comply with the regulations. It emphasised that the company, once back on the Registry, should comply with filing all the missing documents and therefore did not object to the company being revived.
The Court agreed with the Registrar with the fact that the request to revive the company should have been in terms of Regulation 9 (4) of the Register of Beneficial Owners Regulation (Subsidiary Legislation 386.19) and not under Article 325(4) of the Companies Act. Irrespective of this, the effect was still to revive the company and therefore the action was still valid. The Court held that it would not make sense to reject the action only to have it filed again under the correct article of law.
The Court then quoted Article 9(4) of the Companies Act (Register of Beneficial Owners) Regulations:
“If any member or creditor of the company, or any other person who appears to the Court to have an interest feels aggrieved by the fact that the name of the company has been struck off the register by virtue of the provisions of this regulation, the Court on an application made by the member or creditor or such other person before the expiration of five years from the publication of the notice of the striking off provided for in sub-regulations (2) and (3) may, if satisfied that it is proper that the name of the company be restored to the register, order that such name be restored to the register, and up on an official copy of the order being delivered by the Registrar of the Courts to the Registrar for registration, the company shall be deemed to have continued in existence as if its name had not been struck off; and the Court may by its order give such directions and make such provisions as seem fit for placing the company and all other persons in the same position as nearly as may be as if the name of the company had not been struck off. The Registrar shall forthwith proceed to publish a notice in the Gazette or on a website maintained by the Registrar and in a daily newspaper circulating wholly or mainly in Malta that the name of the company has been restored to the register.”
The Court pointed out the application was filed within five years and that the applicant company proved that it has a claim against Afegra. The Court agreed with the Registrar that it took the correct steps to strike off the company, however upheld the request to revive Afegra on condition that the applicant company should update the Registrar of the progress of the claim it has.
The Court then moved to uphold the request and ordered that the company be revived within fifteen days.
Av. Malcolm Mifsud
Partner
Mifsud & Mifsud Advocates
This article may also be accessed on Malta Today.
For more information you can contact one of our Team Members at Mifsud & Mifsud Advocates.
