Supporting company directors fulfil their compliance obligations

Obligations stemming from the Companies Act are imposed on directors to ensure that proper books and records are kept. Our dedicated team provides advice and support to companies on the requirements laid out in the Act relating to the maintenance of proper books of accounts, guiding businesses on what books need to be kept, where such books are prepared and retained, as well as frequency of updating.

Our team assist our clients with deadline management for filing of financial statements with the Registry of companies, guiding business through the different rules that apply for private and public companies and varying deadlines in the case of first year companies. The Registrar of Companies has a remit to enforce statutory obligations pertaining to financial statement filing for Maltese entities and presently applies a strict stance towards non-compliance. A range of sanctions are used to achieve this objective. These may include the imposition of late filing penalties, the prosecution of companies and/or its officers, court orders and involuntary strike off. Involuntary strike off results in the loss of control over assets and may result in the directors of a company being held to be personally liable for the debts of the company.

The Companies Act (1995) places many onerous responsibilities and demands on companies and their directors. In the current corporate environment, there is now more than ever before a focus on the importance of governance and compliance. Our knowledgeable and dedicated team assist companies and directors with their on-going annual company law obligations relating to proper bookkeeping, financial statement filing, and the rules governing dividend distributability.

Eric Padovani

Director, Corporate Accounting Advisory Services

KPMG in Malta

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Statutory accounting advice

The Corporate Accounting Advisory department provides guidance and advice related to the consolidation requirements as laid out in the Act, and assists group entities with assessment of the applicability of exemptions from consolidation as provided under the Act. Entities can avail themselves of exemption based on size, with the company having to meet established size thresholds, or exemption through submission of consolidated financial statements prepared by a parent entity. Where such consolidated financial statements are prepared by a foreign parent under foreign GAAP, exemption is not automatic as acceptance of consolidated financial statements is subject to the meeting of several conditions laid out in the Companies Act and MBR approval. We have supported numerous multinational businesses in coordinating this process, including management of communication with the MBR, and has the experience to provide you with optimal support.

Should a parent company have an obligation to prepare consolidated financial statements, we have a specialised team focused on the preparation of consolidated financial statements.

Distribution of profits

We also provide support to entities looking to carry out a distribution of dividends. Dividend distributions are proposed by the company’s directors who are accountable to ensure that the company has sufficient distributable reserves to cover the proposed dividend. Should the amount proposed exceed available distributable reserves, the distribution may be deemed unlawful, carrying consequences for the shareholders as well as implications from a financial reporting perspective. Our team assists companies compute the total amount of profits that are available for distribution, following the criteria set out in the Companies Act, including the classification of revenue streams and segregation of profits and retained earnings into the respective realized and unrealized portions. We help facilitate the distribution process by collating all financial information required to be on hand for the purpose of ensuring that the dividend distribution passes through. The team also provide advice on procedures to be applied in instances where an over-distribution has taken place.

Company liquidations

In corporate restructuring processes, or instances where entities are winding down their operations, we provide guidance on the procedures that are applicable when placing a company into voluntary liquidation, and guide companies through the specific processes that need to be carried out during the course of the liquidation. Our team supports clients with the administrative process in closing down operations, including advice on the tax and vat implications on the transactions to be undertaken as part of the winding up exercise. We also support liquidators in the preparation of accounts up to date of dissolution, compilation of winding up accounts and scheme of distribution. Furthermore, we assist with the drafting of the required documentation and the relative notification filings with the respective authorities in Malta.

Other services

Our payroll outsourcing services in Malta cover computation, salary payment, payslip preparation, submission of statutory forms and leave management.

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Provide holistic support ranging from VAT coding support to return preparation and submission, as well as review of VAT processes within your business.

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