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A limited liability company incorporated under the laws of Cyprus could either be limited by shares or by guarantee.
Common practice indicates that most companies to be registered with the Registrar of Companies are private companies limited by shares. In a private company limited by shares, the liability of each member is limited to the nominal value of the shares that he has agreed to take or any such shares at a premium. Once the member (shareholder) has paid for his shares, his liability towards the debts or liabilities of the company is fully discharged, and only in very limited circumstance will member be liable for more than the contribution of shares of the company. Such instances might include an intention to defraud creditors, defraud the public authority by deliberately evading tax.
A public company limited by shares is, put simply, not a private company!
Approval of the name of the company by the Registrar of Companies
An application requesting the approval of the name of the company is submitted to the Registrar of Companies. It is advisable that at least three options are given to the Registrar of Companies to prevent rejection by the Registrar, in the event that the name requested has already been approved/registered previously, by the Registrar of Companies. This procedure usually takes between three to five working days. It is advisable that the client avoids the use of descriptive names or names that are misleading and inappropriate.
Memorandum and Articles of Association
Every company must have a Memorandum of Association and Articles of Association. The nature of the activities of the company is stated in the Memorandum of Association, and the Articles of Association contain the rules governing the internal management of the company. It is crucial for the smooth running of the business to adopt a set of Articles which reflect the exact agreement of the shareholders.
Capital Structure of the Company
There is no legal restriction as to the amount of the share capital of a company.
Shareholders of The Company
A Private company incorporated under the laws of Cyprus should have at least, one shareholder and a maximum of fifty shareholders.
A company may be registered by a non-resident person, by appointing a nominee to hold their shares on trust. Our firm can offer the above mentioned trustee services, in order to secure the anonymity and for beneficial tax treatment purposes of the beneficial shareholder, whose identity is disclosed only to us.
However, following the latest developments in the Cyprus, if a company wants to open a bank account, the Ultimate Beneficial Owner (UBO) is obliged to disclose his/her identity to the banking institution and we, as lawyers, will have to disclose all the Know-Your-Client (KYC) forms to the bank accompanied by a detailed analysis of the corporate structure of the company/ies and any trust in place.
Each beneficial shareholder must provide a bank reference from their bankers abroad as well as copy of the data pages of their passport, contact details which will be disclosed with utmost confidentiality to the competent authority of Cyprus.
There is no legal restriction as to the number of Directors a company may have, but private limited company by shares must have at least one. A public limited company by shares at least two. The Director may be local or foreign, a nominee director might also be appointed. Appointing nominee directors is advantageous in the case of foreign companies since companies whose directors are Cypriots enjoy the benefits of Cypriot taxation laws. A director may be removed by the shareholders pursuant to an ordinary resolution of the shareholders.
The information required for each director is the following:-
Every company must have a secretary, which can be an employee of our firm, if that is requested.
Every company must have a registered office in Cyprus, which can be the address of our firm.
(Following the new anti-money laundering and terrorist financing regulations, more information will be required, for instance a copy of the utility bill of each person or entity)
Incorporation of a Cypriot Company
Once the above procedures have been completed, it usually takes about three weeks for the registration of the company, depending always on the workload of the Registrar of Companies.
The new online system:
Following the new updated system of the registrar of companies, registration of private limited companies by shares will be registered online. Our firm is duly trained to provide all online services.