The process of incorporating a Cyprus company is straight forward.
Frequently asked questions (FAQ) relating to company’s share capital
What is the liability of shareholders of a Cyprus limited company?
A company limited by shares has separate legal personality from that of its shareholders. The liability of a shareholder for the company's liabilities is commonly limited to the amount, if any, that remains unpaid on that shareholder's shares.
Frequently asked questions (FAQ) relating to company’s management
What are the responsibilities of Directors in a limited company?
The Board of Directors of the company is responsible for the day to day management of the company’s business.
Issue of Debentures/Bonds in a Cyprus private limited company
Company in financial difficulties- steps to take
The Cyprus Companies Law recognizes three formal procedures for companies in financial difficulties:
- A reorganization plan of the company and/or a settlement between the company and its creditors may be effected following the approval of the court;
Establishment of a Branch in Cyprus
In general, a floating charge is a type of a security which “floats” all over the assets of the borrower-company, until an event of default occurs or until the company goes into insolvent liquidation, at which time the floating charge crystallises and attaches to all the then existing assets. Until such an event takes place, the company may carry on its business in the ordinary course and subject to the terms of the debenture may sell, mortgage or otherwise deal with its assets and pay dividends out of profits as though the floating charge had not been created.
Differences between Public & Private Companies in Cyprus
The major differences between a public and a private company are provided in the Companies' Law.
Trade Mark: How to achieve its registration in Europe and Internationally
A trade mark is one of the most valuable assets of a business since it is the way that customers identify and distinguish a product/service and that is why it is important to register such trademarks. A trade mark may be registered nationally but also in Europe and/or internationally.
The shareholders of a company, prior to incorporation of the company, may enter into an agreement between themselves relating to the participation in the management of the business, sharing profits and the arrangements for buying each other out. Alternatively, the company may by contract confer rights on individual shareholders on matters such as the composition of the board, the payment of dividends etc.
Security by a way of a pledge over shares in a Company
Modern economic societies involve transactions and financing by corporations and consequently, securities are often required by the creditors for such transactions. One form of a security is a pledge over shares in a company, which by its nature is a possessory security interest and thus involves the delivery of possession, actual or constructive. In simple words, a pledge is a method of security in order to assure the repayment of a debt or the performance of an act under a contract.
Registration of a limited liability company by guarantee - Cyprus
A Company Limited by Guarantee is ‘a company having the liability of its members limited by the memorandum to such amount as the members agree may respectively thereby undertake to contribute to the assets of the company in the event of it being wound up.’ Therefore, the members of the company do not have to pay anything unless the company is wound up and the amount is limited to the amount agreed on the memorandum.
Conversion from an existing Public company to a Private company
A public company may be converted to a private company at any given time of its life time.
Duties & liabilities of Directors under Cyprus Law
Cyprus Companies Law provides that every private company must have at least one director and every public company must have at least two directors (s.170).
Amendments to the Companies Law in relation to the keeping of books of account
The Companies Law has been amended by Law 90(Ι)/2013 published in the Official Gazette on 26 July 2013. The amendment effected is the following: Keeping books of account
Licensing of a Bank in Cyprus
Under the Central Bank of Cyprus (CBC) Law, 2002 -2007, and the Banking Law, 1997- 2009, the Central Bank of Cyprus is the competent authority for the supervision and licensing of banks. In exercising its supervisory role, the CBC is guided by the recommendations of the Basel Committee on Banking Supervision, the guidelines issued by the European Banking Authority (EBA), and the rules of the EU. In this connection, various directives, circulars and guidelines regarding prudential supervision are issued by the CBC to all banks operating in Cyprus. The supervision of banks incorporated in Cyprus, including both their domestic and foreign subsidiaries and branches, is exercised by the CBC on a consolidated basis.
Flat Annual Fee paid to the Registrar for all Companies
The Cyprus government has introduced a levy of €350 payable by all Cyprus Companies. The levy is an annual fee payable as follows:
- A fixed annual levy of €350 is imposed to all companies that are registered in Cyprus.
- For Group of Companies the total amount cannot exceed the €20.000.
Registration of International Business Branches in Cyprus
Under Section 347 of the Companies Law (Cap 113), companies incorporated outside the jurisdiction of the Republic of Cyprus may register a branch in Cyprus. The registration procedure is to a large extent identical with the incorporation of a new company in Cyprus with the major difference being that the registration of a branch in Cyprus does not create a new legal entity in Cyprus. What this essentially means is that the legal entity, which is established under a different jurisdiction, has a branch in the Republic of Cyprus and it may operate through this branch for its international activities.
Classes of shares in a limited liability company in Cyprus
It is important to explain and differentiate between:
a) Authorised share capital
b) Issued or allotted share capital- the total nominal amount actually issued to shareholders at any time
c) Paid up share capital- the amount so far paid on shares which have been issued
d) Uncalled share capital- the amount which the company is entitled to call on shareholders to contribute
Procedure of re-domiciliation (transfer) of an overseas company to Cyprus
The procedure of re-domiciliation (transfer) of an overseas company to Cyprus is quite simple and straight-forward.