Over a quarter of companies registered in Malta are in breach of the Companies Act, having failed to submit their annual accounts to the financial services watchdog for at least the past two years.

Prime Minister Joseph Muscat confirmed the figure earlier this week in reply to a parliamentary question from Opposition MP Edwin Vassallo.

Asked about the number of companies that had not submitted their accounts for 2016 and 2017, Dr Muscat said that according to information supplied to him by the Registry of Companies, it was “difficult” to obtain exact figures because of varying year-ends, as well as the fact that some companies were not in operation any more.

An investigation of records, however, showed that in the past two years, 30 per cent of companies had not yet submitted their annual accounts or were still in the process of doing so.

Article 183 of the Companies Act lays down the obligation of directors to file audited annual accounts to the company registrar, with the law also stating that company officers that do not comply with this provision are liable to a daily fine of €46.59, up to a maximum of €2,329.37.

Dr Muscat added that the watchdog would continue to make an effort to ensure the accounts were submitted but did not go into what these efforts would be. He also did not say how many fines had been issued in the past two years.

A spokesman for the MFSA, which until earlier this year, when it became an independent government agency, was tasked with running the Registry of Companies, said there were a number of factors that contributed to the non-filing of company accounts, such as the fact that new companies - more than 5,000 each year in recent years - legally had a time period of nearly two years from registration to file their accounts.

The spokesman added that there was always a number of companies whose shareholders had lost interest and were “de facto non-operative”.

Read: Ensuring businesses have the truth, the whole truth and nothing but

“With regards to non-filing, the Companies Act provides for appropriate penalties for late filing of documents, including accounts, which the ROC applies, issues and follows up by regular reminders and eventually through the issue of judicial letters. 

“The Registry of Companies also takes other measures, such as refusing to issue good-standing certificates in respect of companies which are non-compliant, as well as withholding the registration of a new company the proposed directors/shareholders of which are involved in other companies which failed to comply with their legal obligations,” the spokesman said.

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