The role of a liquidator is central to the orderly winding up of an insolvent company, both in the United Kingdom and in Cyprus. While each jurisdiction operates under its own legislative framework, Cyprus’s Companies Law, Cap. 113—originally modeled on the UK Companies Act 1948—shares many core principles with the UK’s Insolvency Act 1986 (IA 1986), particularly regarding the powers conferred on liquidators and the procedures governing creditors’ meetings.
Although the legal foundations are closely aligned, it is important to acknowledge key distinctions in the modern application of insolvency law between the two jurisdictions:
- The UK’s IA 1986 introduced a more comprehensive and modernised insolvency regime, including tools such as administration, company voluntary arrangements (CVAs), and pre-pack sales—mechanisms not yet fully replicated in Cyprus.
- Cyprus continues to operate under a more traditional legal structure, with fewer statutory restructuring tools, although recent reforms (including the introduction of examinership and the regulation of insolvency practitioners) have begun to bridge this gap.
- Notably, court supervision in Cyprus remains more prominent, especially in compulsory liquidations, whereas the UK has moved towards a more streamlined and administrative approach.
Core Powers of a Liquidator
Under the UK’s IA 1986 (sections 165, 167 and Schedule 4), a liquidator is entrusted with wide-ranging powers designed to maximise recoveries and ensure fair distribution. These include:
- Pay any class of creditors in full.
- Enter into compromises or arrangements with creditors.
- Compromise liabilities owed to or by the company and resolve matters affecting its assets or winding up.
- Initiate or defend legal proceedings.
- Continue or adopt prior legal proceedings.
- Operate the business if necessary for a beneficial winding up (e.g., to manage public risks).
- Sell company property publicly or privately, in whole or in part.
- Execute documents and use the company seal.
- Claim in the insolvency of contributories without set-off.
- Issue promissory notes or bills of exchange.
- Raise funds secured against company assets.
- Act in their official name to recover money from deceased contributories.
- Appoint agents for specific tasks, though not delegate their overall powers.
- Do all other acts necessary to complete the winding up and distribute assets.
Distribution and Order of Payments
Once assets are realised, distribution follows a strict statutory order:
- Fixed charge holders
- Official receiver’s fees and expenses
- Moratorium and priority pre-moratorium debts (if applicable)
- Expenses of winding up
- Preferential creditors
- Prescribed part
- Floating charges
- Unsecured creditors (pro rata)
- Shareholders (if surplus remains)
Dividends—whether interim or final—are paid to creditors who have submitted valid proofs of debt. It is rare in most liquidations for unsecured creditors to recover more than a small proportion of what they are owed.
While liquidators are granted broad powers to manage and wind up a company’s affairs, these powers must be exercised with transparency and in the best interests of creditors. Although formal approval is not always required—especially where actions are aimed at maximising asset recoveries—liquidators should maintain open communication with creditors, particularly where sensitive or disputed matters arise. Striking the right balance between efficiency and accountability is essential to a fair and effective liquidation process.
Provided that a confirmation by the Court is obtained, a company limited by shares or a company limited by guarantee which also has a share capital may, if so authorized by its articles of association, by special resolution notified to the Department of the Registrar of Companies and Intellectual Property (hereinafter referred to as the “Registrar”) and published pursuant to section 365A of the Companies Law (Cap 113) (hereinafter referred to as the “Law”), has the power to proceed with a reduction of its share capital in any way, and in particular, without prejudice to the generality of the foregoing power, may:
- eliminate or reduce the liability on any of its shares in connection with the non paid up share capital; or
- either with or without reducing or eliminating liability on any of its shares, cancel any paid-up share capital which is lost or not represented by the company’s available assets; or
- either with or without reducing or eliminating liability on any of its shares, return any paid up share capital which is in excess of the company’s needs;
- write off paid up share capital for the purpose of nullifying company’s losses;
- write off paid up share capital by the creation of a reserve account, to be named “the capital reduction reserve fund” that shall be subjected to the same treatment as the share premium account in accordance with section 55 of the Law, and may, if it is considered necessary, alter its memorandum by reducing the amount of its share capital and of its shares (section 64 of the Law).
It shall be noted that in cases of a public companies, the issued share capital cannot be reduced to an amount which is lower than the minimum share capital provided for in section 4A of the Law (namely the amount of €25.629), unless the decision regarding the reduction provides for an increase of the share capital to an amount at least equal to the aforesaid minimum share capital at the same time (section 64 of the Law).
A company passing a resolution regarding a share capital reduction, may apply to the Court requesting the issue of an order confirming the reduction (section 65 of the Law).
If the reduction of share capital involves decrease of liability in connection with any unpaid share capital or the return to any shareholder of any paid-up share capital, and in any other case if the Court so directs, the below provisions shall apply, subject to subsection 65(3) of the Law (subsection 65(2) of the Law):
- each company’s creditor who on the date determined by the Court is entitled to any debt or claim that would be admissible as proof against the company (if that date were the commencement of the company’s dissolution), and who can prove that there is a reasonable possibility that the reduction of the share capital will jeopardize the repayment of the debt or the settlement of the claim thereof, and that there are no adequate guarantees in place by the company, shall be entitled to object to the reduction;
- the Court shall arrange for the preparation of a list of creditors that are entitled to object, and to this end, shall determine/discover, as far as possible without requiring an application to be submitted by the creditors, the names of the said company’s creditors and the nature and amount of the debts or claims thereof, and may publish notices setting a day or days within which creditors the names of which are not included therein will be able to claim to be entered on the said list or are to be excluded from the right of objecting to the reduction;
- if a debt or claim of a creditor included in the list is not repaid or is not determined, and the said creditor does not consent to the reduction, the Court may, if it considers appropriate, not request the consent of the specific creditor upon the company securing of the payment of his debt or claim, and the Court may direct, the following amount:
- In case the company admits the full amount of debt or claim, or, even if the company does not admit the full amount of the debt or claim, is willing to pay for it, then the amount determined by the Court is full amount of the debt or claim;
- In case the company does not admit or is unwilling to pay and/or settle the full amount of the debt or claim, or if the amount is contingent or not determined, then an amount shall be fixed by the Court upon the conduct of an inquiry and adjudication as if the company was wound up by the Court.
If a reduction of share capital involves the limitation of liability in connection with any unpaid share capital or the repayment to any shareholder of any paid share capital, the Court may direct that subsection 65(2) of the Law shall not apply regarding any class or any classes of creditors (subsection 65(3) of the Law).
Provided that the Court is satisfied with regards to each company’s creditor entitled to object to the reduction that either his acquiescence to the reduction has been acquired or his debt or claim has been settled/repaid or determined, or has been secured, the Court may proceed with the issue of an order approving the reduction on such terms and conditions as it considers appropriate (subsection 66(1) of the Law).
Upon submission with the Registrar of a copy of the order issued by the Court, confirming the reduction of the company’s share capital, and the minutes approved by the Court indicating the share capital amount as modified by the order, the number of shares into which the share capital is to be divided, the value of each share and the amount, if any, deemed to be paid on each share, the competent officers of the Registrar shall proceed with the registration of the order and minute (subsection 67(1) of the Law).
Moreover, it is noted the order and minutes approving the reduction of the company’s share capital shall have effect upon submission and registration thereof with the Registrar (subsection 67(2) of the Law).
The Registrar shall certify the registration of the order and the minutes. The certificate issued by the Registrar shall constitute conclusive evidence that all the requirements of the Law relating to the reduction of the company’s share capital have been complied with (subsection 67(4) of the Law).
The minutes, upon submission and registration thereof with the Registrar are deemed to substitute the corresponding part of the company’s memorandum, and shall be valid and variable as if these had been originally contained therein (subsection 67(5) of the Law).
In an effort to combat abuse of the financial system for engaging in illegal activities including (inter alia) money laundering, financing terrorism, tax fraud and corruption, thus giving effect to the EU Anti-Money Laundering Directive(s) and the Cypriot Prevention and Suppression of Money Laundering and Terrorist Financing Law(s), (collectively referred to as the “Applicable Law”), the Department of Registrar of Companies and Intellectual Property of Cyprus, (the “Registrar”), has announced the establishment of the Register of Beneficial Owners of companies and other legal entities, (the “UBO Register”).
The commencement of the implementation process (14th of November 2023) marked the beginning of a new era in the business world. Without doubt, and as it goes with all changes, this also entails the element of “unknown” and the need to navigate a new “path”. The purpose of this article is, therefore, to provide a practical guiding tool in order for every company and legal entity to comply with the provisions of the Applicable Law.
- Holding or being exempted from the Responsibility of Submission of Beneficial Owners’ data
- Subject to the exemptions set out below, all companies incorporated or registered under the Companies Law Cap. 113, European public limited liability companies (SE) and partnerships, (collectively referred to as the “Companies” and individually as the “Company”), shall within the requisite timeframe submit to the UBO Register their Beneficial Owners’ data.
- Companies, which are currently in the process of strike-off, are not exempted from the obligation to submit their Beneficial Owners’ data if and when such process commenced on, or following, the 12th of March 2021 – taking into consideration the date of filing of the relevant application to the Registrar.
- Companies, which are currently in the process of liquidation, are not exempted from the obligation to submit their Beneficial Owners’ data if and when such process commenced on, or following, the 12th of March 2021 – taking into consideration the date of resolution approving the company’s liquidation (Voluntary Liquidation) or the date of the relevant application submitted to the court (Liquidation by Court).
- Overseas companies with an established place of business (branch) in Cyprus, companies that are listed on a regulated market subject to disclosure requirements under EU law or are subject to equivalent international standards ensuring adequate transparency of ownership information, do not fall within the scope of the foregoing legislative obligation.
- Definition of “Beneficial Owner”
According to the Applicable Law, the “Beneficial Owner” is any person who has the Company’s ultimate ownership or control through:
- The ownership of a sufficient percentage of shares:
- Direct Ownership: A shareholding of 25% plus one share in the issued capital of the Company held by that person; or
- Indirect Ownership: A shareholding of 25% plus one share in the issued capital of the Company held by that person through another company or legal entity; or
- Direct & Indirect Ownership: Both ownership regimes, as described above, are applicable.
OR
- Voting rights
OR
- Significant influence or control by other means
Provided that a beneficial owner cannot be determined on the foregoing grounds, then the details of one or more senior management officials shall be submitted to the UBO Register.
- Data for Disclosure
The required data which shall be submitted for each and all Beneficial Owners of a Company includes:
- Personal information – the name, date of birth, nationality, residential address and details of Identity Card (only for Cypriots) or Passport; and
- The nature and extent of the beneficial ownership or interest held, directly or indirectly; and
- The date on which such person became or ceased to be a beneficial owner, or on which the previously submitted information has changed.
- Applicable Timeframe(s) & Deadlines
- A newly registered or incorporated Company: The Beneficial Owners’ data shall be submitted to the UBO Register within ninety (90) days from the date of their incorporation or registration.
- Change in the Company’s ownership structure and/or in the data previously submitted for Beneficial Owner(s): The UBO Register shall be updated accordingly within forty-five (45) days from the date on which the said change become known to the Company.
- Annual Confirmation: Between 1st of October and 31st of December of each calendar year, all Companies shall re-confirm the data previously submitted for their Beneficial Owners. In this respect, the Amended Law (as defined below) has granted an extension until 31st of March 2025 for the re-confirmation of such data.
- Consequences of failure of compliance
On 6th of December 2024, the Prevention and Combating of Money Laundering (Amendment) (No.2) Law of 2024 (number L.141(I)/2024), (the “Amended Law”), was published; therefore, introducing (inter alia) amendments in the penalties for cases of non-compliance.
- In case of failing to submit, update and/or re-submit the Beneficial Owners’ data, notwithstanding the criminal liability or prosecution of any person, the consequences fall on the Company itself. However, the Company’s director or other managing director, who refuses or omits or neglects to take the required action, is jointly and/or severally liable with the Company for the payment of any penalty. Provided that the Company’s director or managing director will not be held liable if they have exercised Due Diligence and non-compliance with the Applicable Law has not been the result of any act or omission or negligence on their behalf.
- The administrative penalties have been revised by the Amended Law and are now as follows:
- One Hundred Euro (€100) on the first day of non-compliance; and
- A further penalty of Fifty Euro (€50) per day of continuation of the default – up to a maximum amount of Five Thousand Euro (€5.000).
A company may, for different business or other reasons, decide to transfer its seat to a country and/or jurisdiction other than the country and/or jurisdiction in which such company has been incorporated and/or currently exists. However, according to the relevant applicable legislation, the main legislative instrument of which is the Companies Law, Cap. 113 (the “Law” or “Cap. 113”), the procedure to be followed for the transfer of the registered seat of a company mainly depends on the country / jurisdiction the company would like to transfer its seat in the event of transferring the registered seat of a company outside the Republic of Cyprus or the country / jurisdiction where the company does currently has its seat in the event of transferring the registered seat of a company incorporate abroad to the Republic of Cyprus, as the case may be.
The procedure for transferring the registered seat of a company from a European member state to the Republic of Cyprus or vice versa is referred to as, and governed by the rules for, ‘cross-border conversion’ (“Cross-border Conversion”), defined as the “an operation whereby a company, without being dissolved or wound up or going into liquidation, converts the legal form under which it is registered in a [European] Member State into a legal form of the destination [European] Member State […] and transfers at least its registered office to the destination [European] Member State, while retaining its legal personality”. In this respect, it is worth to stress that the Cross-border Conversion was only introduced in Cap. 113 by virtue of the Amending Law No. 3 of 2024 to the Cap. 113 (Law 26(I)/2024) incorporating the Directive (EU) 2019/2121 of the European Parliament and of the Council of 27 November 2019 amending Directive (EU) 2017/1132 as regards cross-border conversions, mergers and divisions (the “EU Directive 2017/1132”).
In the course of the completion of a Cross-border Conversion involving the Republic of Cyprus, the procedure is further differentiated depending on whether the Republic of Cyprus will be the departure member state or the destination member state:
- In the event a Cyprus company is going to transfer its seat to another European country, in which case Cyprus is to be considered as the departure European member state, the whole procedure must commence at the Republic of Cyprus. To be more precise, upon preparation -by the Board of Directors of the company- of the Draft Terms of the Cross-border Conversion, a solvency declaration as well as the Reports for the members and employees of the company, as the case may be, and subject to the examination of such Reports by an expert, if necessary, the company must take all appropriate steps for the publication -within the timeframe prescribed in the Law- of its intention to proceed with a Cross-border Conversion, either by filing all relevant documents with the Department of Registrar of Companies and Intellectual Property or by making the said documents available on its website free of charge to the public. Then, a General Meeting will be convened which is to decide by means of a special resolution (subject to the provisions of the existing Articles of Association of the company), on the approval of the Cross-border Conversion as well as the adaption of the Constitutional Document (M&AA) of the company. Upon approval by the General Meeting, an Application is filed with the Court requesting the issuance of the “Pre-Conversion Certificate”, upon issuance of which the latter is transmitted to the destination European member state through the system of interconnection of registers. Given the fact that the company shall be converted to a company under the laws of another European member state, the procedure for the completion of the conversion shall continue in the destination European member state, the competent authority of which shall be called upon to confirm / approve the Cross-border Conversion. The Department of Registrar of Companies and Intellectual Property proceeds with the deletion of the company from the national Companies’ Register only upon confirmation / approval of the Cross-border Conversion by the destination European member state, shared through the system of interconnection of registers.
- In the event a company is going to transfer its seat from a European country to the Republic of Cyprus, the Cyprus Courts are competent to review the legality of the Cross-border Conversion upon provision of the “Pre-Conversion Certificate” issued by the competent Court of the departure European member state. Subject to the successful review of the proposed Cross-border Conversion, the Court accepts and approves the Cross-border Conversion while the Court Order approving the Cross-border Conversion is filed with the Department of Registrar of Companies and Intellectual Property, which is responsible to update the national Register of Companies as well as to notify the departing European member state, shared through the system of interconnection of registers.
On the other side, the procedure for transferring the registered seat of a company from a third country to the Republic of Cyprus or vice versa is referred to as, and thus governed by the rules for, ‘re-domiciliation’ (“Re-domiciliation”), introduced in Cap. 113 by virtue of the Amending Law No. 2 of 2006 to the Cap. 113 (Law 26(I)/2024).
The procedure relating to Re-domiciliation is differentiated depending on whether the Republic of Cyprus will be the departure jurisdiction or the destination jurisdiction:
- In the event a Cyprus company is going to transfer its seat to a foreign jurisdiction, the procedure must commence at the Republic of Cyprus by passing a resolution to this end by the General Meeting of the Company as well as filing an application, accompanied by all supporting information / documentation, with the Department of Registrar of Companies and Intellectual Property requiring the latter to provide his consent for its re-domiciliation from the Republic of Cyprus to a foreign authorised country or jurisdiction; simultaneously, the company’s intention to be re-domiciled abroad must be published in accordance with the provisions of the Law. The Department of Registrar of Companies and Intellectual Property does not grant any consent for re-domiciliation, unless a period of 3 months from the publication date is lapsed. During the said 3-month period, any creditors of the company are given the right to object the re-domiciliation of the company by applying to the Court to this end. In that regard, the Court may approve, approve provided sufficient guarantees are given or reject the re-domiciliation of the company. Following the lapse of the said 3-month period, in the absence of any objections or in the existence of a Court order approving (unconditionally or given the guarantees) the re-domiciliation of the company, the latter is granted the Registrar’s consent to be re-domiciled. Then, the procedure is continued in the destination foreign jurisdiction for the purpose of obtaining the “Certificate of Continuance”. Upon obtaining of the “Certificate of Continuance”, it is submitted to the Department of Registrar of Companies and Intellectual Property, and the latter proceeds with the de-registration of the company from the Companies Registry of the Republic of Cyprus and the issuance of the “De-registration Certificate”.
- In the event a company is going to transfer its seat from a foreign jurisdiction to the Republic of Cyprus, the foreign company must, following any steps necessary to be brought in the foreign jurisdiction, file an application for its continuance in the Republic of Cyprus to the Department of Registrar of Companies and Intellectual Property of the Republic of Cyprus, accompanied by all supporting information / documentation. Upon receipt of such an application, the Department of Registrar of Companies proceeds with the provisional registration of the company and issues the “Temporary Certificate of Continuation” to this end, indicating that the company continues to exist under the laws of the Republic of Cyprus as of the date of such registration. Then, within a period of 6 months (or further 3 months, if deemed appropriate) the company must provide the Department of Registrar of Companies and Intellectual Property with supplementary documents, issued by the competent authority of the foreign jurisdiction, evidencing that its existence in the foreign jurisdiction has ceased. Upon the provision of the required documents to the Department of Registrar of Companies and Intellectual Property, the latter issues the “Certificate of Continuation” of the company. Otherwise, the Department of Registrar of Companies and Intellectual Property is duly entitled to strike off the name of the Company from its archives.
In light of the above, it is worth to stress that the opportunity of a company to transfer its seat must be contained in the Constitutional Document of the Company.
Το Δίκαιο του Ανταγωνισμού της Ευρωπαϊκής Ένωσης (ΕΕ) αναπτύχθηκε με στόχο να εξασφαλίζει τις καλύτερες συνθήκες ανταγωνισμού στην Ευρωπαϊκή αγορά, προς όφελος τόσο των επιχειρήσεων όσο και των καταναλωτών. Στα πλαίσια αυτών των διατάξεων υπάρχει και η πρόβλεψη του άρθρου 102 της Συνθήκης Λειτουργίας της Ευρωπαϊκής Ένωσης (στο εξής «ΣΛΕΕ») για την κατάχρηση της δεσπόζουσας θέσης μιας επιχείρησης. Μέρος των αντιμονοπωλιακών κανόνων, λοιπόν, αποτελούν και οι κανόνες αυτοί, που απαγορεύουν σε μια επιχείρηση η οποία βρίσκεται σε θέση ισχύος να εκμεταλλεύεται αυτό της το προνόμιο για να εξαλείψει τον ανταγωνισμό. Σχετικά με το άρθρο 102, τυγχάνει άμεσης εφαρμογής σε όλα τα Κράτη Μέλη της ΕΕ και αποκλειστική χρήση του έχει η Ευρωπαϊκή Επιτροπή (στο εξής «Επιτροπή»).
Έννοια της Κατάχρησης Δεσπόζουσας Θέσης:
- Έννοια:
Η αντικειμενική έννοια της κατάχρησης βγαίνει μέσα από τη νομολογία του ΔΕΕ και συνιστά κάθε πράξη μεταβολής των κανόνων της αγοράς, κάθε πράξη νόθευσης του ανταγωνισμού. Συνεπώς καταχρηστική είναι η εκμετάλλευση της δεσπόζουσας θέσης μιας επιχείρησης όταν με τη δραστηριότητα της θίγεται ο θεσμός του ελεύθερου ανταγωνισμού.
Το ΔΕΕ μέσα από την απόφαση Hoffmann-La Roche έδωσε ένα ορισμό που αποτελεί την βάση της δικαιοδοσίας από τότε. Δέχεται ότι κατάχρηση υπάρχει όταν η επιχείρηση προσπαθεί να διατηρήσει ή να ισχυροποιήσει τη θέση της με μέσα, τα οποία υπό κανονικές συνθήκες ανταγωνισμού, δεν θα χρησιμοποιούσε.
«Η έννοια της καταχρηστικής εκμεταλλεύσεως είναι αντικειμενική έννοια, η οποία αφορά τη συμπεριφορά επιχειρήσεως που κατέχει δεσπόζουσα θέση, η οποία είναι ικανή να επηρεάσει τη δομή μιας αγοράς όπου, λόγω ακριβώς της υπάρξεως της εν λόγω επιχειρήσεως, ο ανταγωνισμός είναι ήδη εξασθενημένος και η οποία εμποδίζει τη διατήρηση του ανταγωνισμού που υπάρχει ακόμη στην αγορά ή την ανάπτυξη του ανταγωνισμού αυτού, με τη βοήθεια μέσων που είναι διαφορετικά από αυτά που διέπουν ένα φυσιολογικό ανταγωνισμό των προϊόντων ή υπηρεσιών βάσει των παροχών των επιχειρηματιών.»
Επίσης, παρόμοιος ορισμός δόθηκε και στην απόφαση NV Nederlandsche Banden Industrie Michelin κατά Επιτροπή:
«…απαγορεύοντας την καταχρηστική εκμετάλλευση δεσπόζουσας θέσης στην αγορά, κατά το μέτρο που μπορεί να επηρεάσει το εμπόριο μεταξύ κρατών μελών, το άρθρο 86 αναφέρεται σε κάθε συμπεριφορά που μπορεί να επηρεάσει τη δομή μιας αγοράς, όπου, ακριβώς λόγω της παρουσίας της εν λόγω επιχειρήσεως, ο ανταγωνισμός είναι ήδη εξασθενημένος και που έχει ως αποτέλεσμα την παρεμβολή εμποδίων, με τη χρησιμοποίηση διαφορετικών μέσων από εκείνα που διέπουν τον κανονικό ανταγωνισμό των προϊόντων και των υπηρεσιών βάσει των παροχών των επιχειρηματιών, στη διατήρηση του υφισταμένου ακόμη στην αγορά ανταγωνισμού ή στην ανάπτυξη του ανταγωνισμού αυτού.»
- Τα δύο είδη κατάχρησης:
Κάτι βασικό που πρέπει να αναφερθεί είναι ότι η κατάχρηση χωρίζεται σε δύο κατηγορίες. Η μια κατηγορία είναι εκμεταλλευτική κατάχρηση και η άλλη η παρεμποδιστική κατάχρηση. Μια εκμεταλλευτική κατάχρηση είναι η συμπεριφορά κατά την οποία η δεσπόζουσα επιχείρηση εκμεταλλεύεται την ισχύ της αγοράς της για εκμετάλλευση των πελατών της. Η παρεμποδιστική κατάχρηση είναι συμπεριφορά που εμποδίζει τον αποτελεσματικό ανταγωνισμό αποκλείοντας τους ανταγωνιστές. Φυσικά η χρήση αποκλειστικών καταχρήσεων μπορεί να οδηγήσει και σε εκμεταλλευτικές καταχρήσεις ή και τα δύο είδη μπορούν να χρησιμοποιηθούν συνδυαστικά. Το άρθρο 102 ασχολήθηκε κυρίως με τις παρεμποδιστικές καταχρήσεις. Παρόλα αυτά, η Επιτροπή θεωρεί ότι το άρθρο μπορεί να εφαρμοστεί και για να απαγορεύσει συμπεριφορές που επηρεάζουν την δομή της αγοράς. Κάτι που επιβεβαιώθηκε και από το ΔΕΕ στην απόφαση Europemballage Corp και Continental Can Co Inc κατά Επιτροπής.
- Επηρεασμός εμπορίου μεταξύ κρατών μελών:
Όπως αναφέρθηκε και πιο πάνω, προϋποθέσεις εφαρμογής του άρθρου 102 της ΣΛΕΕ είναι η κατάχρηση της δεσπόζουσας θέσης, που θα έχει ως αποτέλεσμα τον επηρεασμό του εμπορίου μεταξύ των Κρατών Μελών. Για να παραβιαστεί το άρθρο 102 αρκεί να αποδειχθεί καταχρηστική συμπεριφορά που είναι ικανή ή τείνει, δύναται δηλαδή να περιορίσει τον ανταγωνισμό και το εμπόριο μεταξύ Κρατών Μελών. Σύμφωνα με την απόφαση BPB Industries plc κατά Επιτροπής, αυτή η συμπεριφορά που θα διαπιστωθεί δεν χρειάζεται να είναι ενεστώσα και πραγματική όσο αφορά τις επιπτώσεις της στο διασυνοριακό εμπόριο. Δεν είναι απαραίτητο να επέλθει ζημιά στον καταναλωτή, αρκεί το περιοριστικό αποτέλεσμα επί του ανταγωνισμού. Βέβαια, μεταξύ της ζημίας ή του περιοριστικού αποτελέσματος που συντελούν στην κατάχρηση απαιτείται κατά κανόνα συνάφεια με την δεσπόζουσα θέση της επιχείρησης. Επιπρόσθετα, όπως επισημαίνεται και στην απόφαση Bayer AG κατά Επιτροπής, μια επιχείρηση που έχει δεσπόζουσα θέση, όμως συμμορφώνεται με το άρθρο 102 της ΣΛΕΕ, δεν είναι παράνομη.
Το άρθρο 102 διαχωρίζει την εφαρμογή του Ευρωπαϊκού Δικαίου του Ανταγωνισμού με την εφαρμογή του εθνικού δικαίου, εφόσον τονίζει ότι θα εφαρμόζεται μόνο εκεί που το εμπόριο επηρεάζεται διακρατικά. Σχετική είναι η απόφαση Hugin κατά Επιτροπής, όπου τονίσθηκε πότε μια υπόθεση εμπίπτει στο κοινοτικό δίκαιο και πότε μια συμπεριφορά εμπίπτει στον τομέα της εθνικής έννομης τάξης.
Εν κατακλείδι, όπως διαφαίνεται μέσα από την νομολογία του ΔΕΕ, το Δίκαιο του Ανταγωνισμού της Ευρωπαϊκής Ένωσης δεν έχει τιμωρητική διάθεση εναντίον των επιχειρήσεων που έχουν αποκτήσει δεσπόζουσα θέση βάσει των δικών τους προσόντων και προσπαθειών με θεμιτά μέσα. Αντιθέτως, τόσο η Συνθήκη όσο και η νομολογία του Δικαστηρίου έχουν ως στόχο να θέσουν όρια μέσα στα οποία οι επιχειρήσεις αυτές μπορούν να απολαμβάνουν τη δεσπόζουσα θέση τους αλλά και να απέχουν από τις καταχρηστικές πρακτικές, προστατεύοντας με αυτό τον τρόπο και τις άλλες επιχειρήσεις αλλά και τους καταναλωτές.
I. Εισαγωγή:
Η ελευθερία κυκλοφορίας των αγαθών είναι η ίσως η σημαντικότερη από τις τέσσερις βασικότερες ελευθερίες που διασυνδέονται και συσχετίζονται με τον κεντρικό σκοπό της Ευρωπαϊκής Ένωσης. Ειδικότερα η ελεύθερη κυκλοφορία των εμπορευμάτων είναι η βάση της εσωτερικής αγοράς που αποτελεί τον κύριο μοχλό της ευρωπαϊκής οικονομίας και περιέχει, την τελωνειακή ένωση και απαγόρευση των τελωνειακών δασμών και όλων των επιβαρύνσεων ισοδύναμου αποτελέσματος προς τελωνειακούς δασμούς, την εσωτερική φορολογία και τους ποσοτικούς περιορισμούς επί των εισαγωγών, καθώς και όλα τα μέτρα ισοδύναμου αποτελέσματος. Ακόμη, περιλαμβάνει την απαγόρευση των κρατικών ενισχύσεων και των επιδοτήσεων, εκτός εάν αυτές εγκριθούν από την Επιτροπή. Ωστόσο, υπάρχουν και οι προϋποθέσεις με τις οποίες ένα κράτος μέλος μπορεί νόμιμα να απαγορεύσει την ελεύθερη κυκλοφορία των εμπορευμάτων. Είναι ξεκάθαρο ότι δεν υπάρχει απόλυτη ελευθερία εισαγωγής και εξαγωγής αγαθών από ένα κράτος μέλος σε ένα άλλο κράτος μέλος για αυτό άλλωστε και η ελευθερία αυτή, δημιούργησε ένα συνονθύλευμα νομοθεσίας και νομολογίας.
II. Η Εσωτερική Αγορά:
Ένας από τους στόχους της ευρωπαϊκής ένωσης από την αρχή της δημιουργίας της ήταν η εγκαθίδρυση εσωτερικής αγοράς. Εσωτερική αγορά, θεωρείται ο χώρος χωρίς εσωτερικά σύνορα μέσα στον οποίο εξασφαλίζεται και η ελεύθερη διακίνηση των εμπορευμάτων. Σύμφωνα με τη Συνθήκη για τη Ευρωπαϊκή Ένωση, η εσωτερική αγορά εργάζεται για τη αειφόρο ανάπτυξη της Ευρώπης με γνώμονα την ισόρροπη οικονομική ανάπτυξη και τη σταθερότητα των τιμών. Προάγοντας την επιστημονική και τεχνολογική πρόοδο η εσωτερική αγορά δεν ήταν αυτοσκοπός αλλά μέσο για την επίτευξη οικονομικών και πολιτικών στόχων. Η επίτευξη της ελευθερίας διακίνησης και μεγιστοποίησης ωφελιμότητας ήταν το κύριο ζητούμενο. Αυτό θα επιτυγχανόταν με την εξάλειψη των τελωνειακών δασμών, τη δημιουργία τομέα ελεύθερου εμπορίου και την υιοθέτηση κοινού δασμολογίου για τα προϊόντα που εισέρχονται από τρίτες χώρες. Αυτό συνεπάγεται σε δημιουργία τελωνιακής ένωσης.
Η Συνθήκη για τη Λειτουργία της Ευρωπαϊκής Ένωσης (ΣΛΕΕ) δίνει σαφή καθοδήγηση σχετικά με τον τρόπο λειτουργίας της ενιαίας αγοράς και ειδικότερα τον τρόπο με τον οποίο πρέπει να εξασφαλιστεί η ελεύθερη κυκλοφορία των εμπορευμάτων. Το σημαντικότερο άρθρο το οποίο προνοεί την εσωτερική αγορά είναι το άρθρο 26 της Συνθήκης Λειτουργίας της Ευρωπαϊκής Ένωσης. Παράλληλα, η καινούργια τεχνική για την επίτευξη της εσωτερικής αγοράς συγκεντρώνεται σε δύο ζητήματα, την απαγόρευση των εμποδίων στο εμπόριο ανάμεσα στα κράτη μέλη και την εναρμόνιση των ευρωπαϊκών προτύπων από τους Ευρωπαϊκούς Οργανισμούς Τυποποίησης.
III. Δασμοί και Φορολογικές Επιβαρύνσεις Ισοδύναμου Αποτελέσματος (ΦΕΙΑ):
Α) Δασμοί
Οι φορολογικοί φραγμοί χρησιμοποιούνται για να προστατεύσουν τα εσωτερικά αγαθά. Χωρίς να υπάρχει κάποια ερμηνεία στις συνθήκες, ο δασμός ερμηνεύτηκε από το Δικαστήριο της Ευρωπαϊκής Ένωσης ότι είναι μια χρηματική επιβάρυνση που επιβάλλεται στο προϊόν για τον μοναδικό λόγο ότι περνά σύνορα . Η εσωτερική πτυχή, των θεμάτων δασμολόγησης ρυθμίζεται από τα άρθρα 28-30 της Συνθήκης Λειτουργίας της Ευρωπαϊκής Ένωσης. Η εσωτερική πτυχή προνοεί την δημιουργία μιας ενιαίας τελωνειακής επικράτειας μεταξύ των συμμετεχόντων κρατών στα οποία δεν υπάρχουν τελωνειακοί δασμοί ή άλλοι περιορισμοί στο εμπόριο. Η εξωτερική διάσταση από την άλλη, βασίζεται στο κοινό δασμολόγιο και στην κοινή εμπορική πολιτική.
Το άρθρο 28 περιλαμβάνει την απαγόρευση των εισαγωγικών και εξαγωγικών δασμών και όλων των φορολογικών επιβαρύνσεων ισοδύναμου μεταξύ των κρατών μελών, καθώς και την υιοθέτηση κοινού δασμολογίου στις σχέσεις τους με τις τρίτες χώρες. Προβλέπει τη δημιουργία τελωνειακής ένωσης μεταξύ των κρατών μελών, η οποία θα καλύπτει όλο το εμπόριο αγαθών. Αγαθά σύμφωνα με το ΔΕΕ θεωρούνται όλα τα αγαθά που έχουν νομισματική αξία και τα οποία μπορούν να αποτελέσουν αντικείμενο εμπορικών συναλλαγών. Τα άρθρα αυτά της Συνθήκης ήταν προϋπόθεση και μέσο για την δημιουργία της εσωτερικής αγοράς, εφόσον δημιουργήθηκαν για να προστατεύουν τα εσωτερικά αγαθά έναντι των φθηνότερων εισαγμένων προϊόντων. Επίσης, το άρθρο 30 της Συνθήκης απαγορεύει με απόλυτο τρόπο σε ένα κράτος μέλος να διατηρεί δασμούς επί εμπορευμάτων που εισάγονται από άλλα κράτη μέλη.
Β) Φορολογικές Επιβαρύνσεις Ισοδύναμου Αποτελέσματος (ΦΕΙΑ)
Το άρθρο 30 της ΣΛΕΕ εκτός από του δασμούς ρυθμίζει και τα ζητήματα των φορολογικών επιβαρύνσεων ισοδύναμου αποτελέσματος. Παρά την ομοιότητα της με τους δασμούς θεωρείται μια αυτόνομη νομική έννοια της Ευρωπαϊκής Ένωσης. Έχει επίσης οριστεί από το Δικαστήριο και συγκεκριμένα στη υπόθεση Commission v. Italy ότι αποτελεί «οποιαδήποτε χρηματική επιβάρυνση, όσο μικρή και ανεξάρτητα από τον ορισμό και τον τρόπο εφαρμογής της η οποία επιβάλλεται μονομερώς στα αγαθά λόγω του ότι διασχίζουν τα σύνορα». Στην ουσία είναι δασμοί όμως δεν φαίνονται ξεκάθαρα, για αυτό και συχνά χαρακτηρίζονται ως «μεταμφιεσμένοι δασμοί». Η φορολογική επιβάρυνση ισοδύναμου αποτελέσματος μπορεί να περιλαμβάνει και άλλου είδους επιβαρύνσεις εκτός από χρηματικές, οι οποίες να στηρίζονται σε κάποια άλλη βάση, είναι ένας πιο έμμεσος τρόπος να επιβαρυνθεί ένα προϊόν. Μπορεί ακόμη, να προκύψει όχι μόνο από ένα μέτρο που επιβάλλεται από ένα κράτος μέλος ή από άλλες δημόσιες αρχές, αλλά και από μια συμφωνία που συνάπτεται μεταξύ ιδιωτών. Το Δικαστήριο στην προαναφερθείσα υπόθεση τονίζει ότι δίνεται έμφαση στο αποτέλεσμα και όχι στον σκοπό του δασμού, αλλά ούτε και στο ποσό, το άρθρο 30 δεν κάνει καμία διαφοροποίηση. Συνήθως φορολογικές επιβαρύνσεις ισοδύναμου αποτελέσματος περιλαμβάνουν επιβαρύνσεις που συνδέονται με διοικητικές διατυπώσεις, όπως για παράδειγμα την διενέργεια ελέγχων ή το κόστος έκδοσης μιας άδειας που αφορούσε μόνο εισαγόμενα προϊόντα. Η απαγόρευση είναι απόλυτη και ανεξάρτητη από κάθε περιοριστικό αποτέλεσμα στο εμπόριο.
IV. Εσωτερική Φορολογία:
Η εσωτερική φορολογία αφορά την απαγόρευση προστατευτισμού με τη μορφή επιβολής διαφορετικής εσωτερικής φορολογίας για προϊόντα προερχόμενα από άλλα κράτη μέλη. Η εσωτερική φορολογία προνοείται από το άρθρο 110 της ΣΛΕΕ το οποίο προβλέπει ότι κανένα κράτος μέλος δεν επιβάλλει άμεσα ή έμμεσα στα προϊόντα άλλων κρατών μελών εσωτερικούς φόρους οποιασδήποτε φύσεως, ανωτέρους από εκείνους που επιβαρύνουν άμεσα ή έμμεσα τα ομοειδή εθνικά προϊόντα. Ακόμη, κανένα κράτος μέλος δεν επιβάλλει στα προϊόντα των άλλων κρατών μελών εσωτερικούς φόρους η φύση των οποίων οδηγεί έμμεσα στην προστασία άλλων προϊόντων. Η πρώτη παράγραφος του άρθρου 110 αναφέρεται σε ομοειδή προϊόντα ενώ η δεύτερη σε προϊόντα σε ανταγωνισμό. Κύριος στόχος του άρθρου αυτού είναι να διασφαλίσει ότι το εσωτερικό σύστημα φορολογίας ενός κράτος μέλους δεν κάνει διάκριση μεταξύ εγχώριων και εισαγόμενων προϊόντων και όχι να απαγορεύσει την εσωτερική φορολογία, ο κανόνας που θέτει είναι η φορολογική ουδετερότητα. Το άρθρο 110 λειτουργεί ως νόμιμος περιορισμός της ελεύθερης διακίνησης αγαθών εφόσον θέτει κάποιες προϋποθέσεις για την εσωτερική φορολογία. Το άρθρο 110 απαγορεύει τρία είδη φορολογικών διακρίσεων, την άμεση διάκριση, την έμμεση διάκριση και την αντιστροφή των διακρίσεων.
Η έμμεση διάκριση είναι όταν ο εθνικός φόρος εφαρμόζεται επίσημα τόσο στα ξένα όσο και στα εγχώρια προϊόντα, αλλά επιβάλλει ουσιαστικά βαρύτερη φορολογική επιβάρυνση για τα πρώτα . Η έμμεση διάκριση, όταν η διαφοροποιημένη φορολογική μεταχείριση των εισαγόμενων προϊόντων βασίζεται σε κριτήρια διαφορετικά από την προέλευση του προϊόντος, μπορεί να δικαιολογηθεί βάση αντικειμενικών κριτηρίων προκειμένου να επιτευχθούν αποδεκτοί κοινωνικοί, περιβαλλοντικοί ή οικονομικοί στόχοι. Άρα, παρά το γεγονός ότι ένα εθνικό φορολογικό σύστημα πρέπει να είναι ουδέτερο έναντι των ξένων αγαθών, μπορεί να κάνει διακρίσεις μεταξύ αγαθών. Αυτά τα κριτήρια είναι αόριστα και ασαφή. Μπορούν να βασίζονται στη φύση της χρήσης των πρώτων υλών, στις διαδικασίες που χρησιμοποιούνται για την παραγωγή ή την κατασκευή αγαθών ή μπορούν να αναφέρονται σε γενικούς στόχους της οικονομικής και κοινωνικής πολιτικής ενός κράτους μέλους, όπως η προστασία του περιβάλλοντος ή η ανάπτυξη της περιφερειακής πολιτικής. Καταληκτικά, σε ειδικές περιστάσεις κάποιοι επιτακτικοί λόγοι μπορεί να καθιστούν απαραίτητη την επιβολή περιορισμών ή ακόμη και απαγορεύσεων που, αν και εμποδίζουν το ελεύθερο εμπόριο, εξυπηρετούν σημαντικούς στόχους. Σε συνθήκες σημαντικών εξελίξεων, όπως σήμερα πολύ λογικό είναι ότι με την πάροδο του χρόνου, μπορεί να αλλάζει ο τρόπος θεώρησης ορισμένων αιτιολογήσεων. Είναι, συνεπώς, πάγιο καθήκον, κατά την εφαρμογή της νομοθεσίας της Ευρωπαϊκής Ένωσης, να υπάρχει το κατάλληλο νομολογιακό πλαίσιο που θα ανανεώνεται συνεχώς και θα παρέχει τις κατάλληλες διευκρινίσεις στα άρθρα της Συνθήκης για να προστατεύει τόσο τους πολίτες της αλλά και τις επιχειρήσεις
Circumstances in which a company may be wound up voluntarily.
According to article 261, Part III of the Companies Law (Cap.113) (hereinafter referred to as the “Law”), a company may be wound up voluntarily in the following cases:
- when the period for the duration of the company (if any), which is fixed by the Company’s Articles of Association, expires, or the event (if any), on the occurrence of which the company’s Articles of Association provide that the company is to be dissolved occurs, and the company has passed a resolution in a general meeting requiring the company to be wound up voluntarily;
- where the company resolves, by special resolution, that it shall be wound up voluntarily;
- where the company resolves, by extraordinary resolution, that it cannot by reason of its liabilities, continue the operation of its business, and that it is advisable to be wound up.
The voluntary winding up of a company shall be deemed to commence at the time of the passing of the resolution for the voluntary winding up thereof (article 263 of the Law). It is noted that in cases where a company has passed a resolution for voluntary winding up, it shall, within fifteen (15) days as of the date of the approval of the aforesaid resolution, proceed with the filing of a copy thereof with the Department of the Registrar of Companies (hereinafter referred to as the “Registrar”), in order for the Registrar to proceed with the relevant publication thereof in the Official Gazette of the Republic of Cyprus (article 262(1) of the Law).
Consequences of Voluntary Winding Up
In case of a voluntary winding up, the company shall, as of the date of commencement of the winding up, cease to carry on its business activities, except where this may be required for the beneficial winding up thereof. Notwithstanding anything to the contrary contained in the company’s Articles of Association, the corporate state and corporate powers of the company shall continue until the company is dissolved (article 264 of the Law).
Furthermore, any transfer of shares, not being a transfer made to the liquidator or with the approval of the liquidator, and any alteration in the status of the members of the company, made after the commencement of the company’s voluntary winding up, shall be void (article 265 of the Law).
In addition to the aforementioned, it shall be noted that as of the date of the appointment of a liquidator all the powers of the directors shall cease, except where the liquidator or the company in general meeting approves the continuation thereof (article 268(2) of the Law).
Powers of the Liquidator
The liquidator’s powers include, inter alia, the following:
- taking into his custody or control all the assets, property, effects and actionable claims of the company;
- verifying claims of all the creditors and consolidate them;
- evaluating the assets and property of the company and prepare a relevant report;
- taking such measures to protect and preserve the assets and property of the company;
- selling the immovable and movable property and actionable claims of the company by public auction or private contract, with power to transfer such property to any person or corporate body, or to sell the same in parcels;
- drawing, accepting, making and endorsing any negotiable instruments on behalf of the company, with the same effect as if such instruments were drawn, accepted, made or endorsed by or on behalf of the company in the ordinary course of its business;
- the investigation of the financial affairs of the company in order to determine undervalued or preferential transactions;
- the signing, execution and verification of any paper, deed, receipt document, application, petition, affidavit, bond or instrument, and for such purpose to use the common seal of the company, if any, as may be necessary for the purposes of liquidation and distribution of the assets of the company;
- to initiate or defend any suit, prosecution or other legal proceedings, civil or criminal, in the name of on behalf of the company;
- to apply to the Court for such orders or directions as may be necessary, regarding the liquidation process;
- to obtain any professional assistance, in the discharge of his/her duties, obligations and responsibilities;
- to invite and settle claims of creditors and claimants and distribute the proceeds in accordance with the provisions of the Law.
Completion of Voluntary Winding Up
As soon as the affairs of the company are fully wound up, the liquidator shall prepare an account in relation to the company’s winding up, indicating how the winding up has been conducted as well the manner in which the property of the company has been distributed, and thereupon, the liquidator shall convene a general meeting of the company for the purpose of presenting before the same the aforesaid account, and provide explanations in relation to it.
The meeting shall be convened by publication in the Official Gazette of the Republic of Cyprus, specifying the time, place and object thereof. The notice of the said meeting shall be published in the Official gazette of the Republic at least one (1) month prior to the date of the meeting.
Within one week as of the date of the meeting, the liquidator shall deliver to the Registrar a copy of the account, and files with the Registrar a report regarding the convocation of the meeting and the date thereof. In the event that the copy of the account is not delivered to the Registrar, or the report is not filed with the Registrar, the liquidator is subject to a fine. It is noted that in the event that a quorum is not present at the meeting, the liquidator shall, in lieu of the return mentioned hereinbefore, prepare a return stating that the meeting was duly summoned, and that no quorum was present thereat.
As soon as the Registrar receives the account as well as the relevant report, shall proceed with the registration thereof, and upon the expiration of three (3) months as of the date of their registration, the company shall be deemed to be dissolved.
It shall be stressed at this point that the Court may, on the application of the liquidator or of any other person who appears to the Court to be interested, make an order deferring the date at which the dissolution of the company is to take effect for such time as the Court thinks proper (article 273 of the Law).
Payments’ priority
In a winding up the following debts shall be paid in priority to all other debts-
1) the below rates and taxes:-
- all local rates owed by the company on the date of passing of the resolution for the company’s winding up, which become due and payable within twelve (12) months prior to the aforesaid date;
- all Government taxes and duties owed by the company on the date of passing of the resolution for the company’s winding up, that become due and payable within twelve (12) months prior to the aforesaid date. In the case of assessed taxes, these shall not exceed the whole one year’s assessment.
2) i. any salary owed to an employee and any sum withheld by the employer from the employee’s salary for the payment of any obligations of the employee or otherwise, which has not been paid by the employer; and
- any other sum or benefit of the employee that arises as a result of an agreement or employment relationship, including any sum owed to a recognized union that arises from the employment relationship between the employer and the employee or otherwise, that the employer has not paid. It is noted that this shall not apply in cases where an employee of a private company is a shareholder or member of the company’s board of directors, unless he/she holds shares or participates in the board of directors as a representative in an evidently procedural and non-substantive manner, and provided that there is no first or second degree relationship between himself/herself and the person being represented.
- every amount of compensation which the company is obliged to pay to an employee, on account of bodily harm suffered by the employee as a result of an accident caused by his/her employment and during his/her employment with the company. An employee of a private company who is a shareholder thereof is exempted, unless the company is voluntarily wound-up or wound-up for reconstruction or merger purposes.
- every amount due to the employee, excluding an employee of a private company who is a shareholder thereof, concerning the leave which he/she is entitled to from his/her employment in the company for an employment period of only one year.
- In cases where any payment has been made: (a) to any clerk, servant, workman or labourer in the employment of a company, on account of wages or salary; or (b) to any such clerk, servant, workman or labourer or, in case of his/her death, to any other person in his/her right, on account of accrued holiday remuneration, out of money advanced by some person for that purpose, the person by whom the money was advanced shall, in case of the company’s winding up, have a right of priority in respect of the money so advanced and paid up to the amount by which the sum in respect of which the clerk, servant, workman or labourer, or other person in his right, would have been entitled to in the event of the company’s winding up, to the extent this amount has been diminished by reason of the payment(s) having been made.
The foregoing debts shall rank equally among themselves and be paid in full, unless the company’s assets are insufficient to meet these debts, in which case they shall abate in equal proportions. If the assets of the company available for payment of the general creditors are insufficient for the full payment of the general creditors, they shall have priority over the claims of holders of debentures under any floating charge created by the company and be paid accordingly out of any property comprised in or subject to that charge.
Subject to the retention of such sums as may be necessary for covering the costs and expenses of the company’s winding up, the foregoing debts shall be discharged to the extent to which the assets of the company are sufficient to meet aforesaid debts (article 300 of the Law).
Definition of Institutions and Acquisition of Legal Personality
The term institution is defined by The Societies and Institutions and other related Matters Law of 2017 (104(I)/2017), as amended (the “Law”), as the aggregate of property that is intended to serve a certain non-profit object and for its establishment, the worth of the dedicated property cannot be less than One Thousand Euro (€1,000) (section 2 of the Law).
Institutions acquire legal personality as of the date of their registration in the Register of Institutions (the “Register”) by the competent District Officer of the relevant district who is responsible in relation to any matters in connection with the registration and operation of Societies, Clubs and Institutions, and the issuance of the relevant registration certificate (the “Registrar”) (sections 2, 5 and 26(1) of the Law).
Registration of Institutions
For the purposes of establishment and registration of an Institution, a written application by the founders or the trustees of a trust or the executors of a will, must be filed with the Registrar in the prescribed form and shall be accompanied by the constituent deed, as well as by the articles of association of the Institution.
The constituent deed and articles of association must stipulate and/or include at least the following:
- The Institution’s name, object(s) and registered office;
- The emblem of the Institution (if any);
- Detailed reference to the mode of operation and/or administration of the Institution;
- The aggregate of the Institution’s property;
- The names and addresses of the members of the Institution;
- The names and addresses of the members of the Board of Directors of the Institution;
- The manner of succession of the members of the Board of Directors of the Institution;
- A provision according to which no remuneration of any kind whatsoever shall be paid to any founding member or officer or member of the Board of Directors of the Institution with regards to any services provided by them (sections 26(2) and 27(2) of the Law).
The Registrar shall proceed with the examination of the relevant application for the institution’s registration, without any delay, and in any event within three (3) months as of the date of submission of the relevant application and all the necessary, duly filled in forms and documentation (section 26(2) and 26(4) of the Law).
Provided that the requirements under the applicable Law are met, the Registrar will proceed with the registration of the institution in the Register of Institutions and the issuance of the relevant registration certificate in the prescribed form. The registration certificate shall be published in the Official Gazette of the Republic and will constitute conclusive evidence of the date of registration of the institution and of compliance with all legal requirements (section 26(5) of the Law).
Objects of Institutions
An institution may be established and registered by the Registrar, provided that the main objective thereof is to achieve one or more of the following objects (section 26(3) of the Law):
- The combat and/or alleviation of poverty;
- The promotion of education;
- The promotion of health and/or saving lives;
- The promotion of the community’s and citizens’ development;
- The promotion and/or flourishing of arts, culture, cultural heritage or science;
- The promotion of amateur sports;
- The safeguard and protection of human rights, the promotion of dispute resolution or reconciliation, as well as the promotion of religious and/or ethnic harmony, equality and diversity;
- The protection and/or safeguard of the environment;
- The relief of needs arising out of young or advanced age, health problems, disability, financial hardship or other disadvantage;
- The promotion of animal welfare and protection;
- For the achievement of any other object that benefits the public in general, or for the achievement of any purpose which is considered to be relevant to any of the aforementioned objectives.
Administration of Institutions
Institutions must be administered by a board of directors consisting of at least three (3) members. Unless otherwise provided in the articles of association of the Institution, their decisions are taken by a simple majority of the members of the board of directors present at the meeting and, in the event of tied vote, the president of board of directors’ meeting shall have a casting vote (section 32(1) of the Law).
In case an institution is administered by three (3) persons, the presence of all three (3) persons is required for quorum purposes (section 32(1) of the Law).
Obligations of Institutions
The members of the board of directors of any institution are bound to keep accurate and detailed books of account where all accounts of money received and paid on behalf of such institution shall be recorded and shall also, at the end of each financial year, prepare the following accounts:
- an account of the gross income of the institution during the financial year;
- an account of any surplus in hand at the commencement of the financial year and of all moneys received during the same year on behalf of the institution;
- an account of all money owing to or from the institution and an account regarding all payments made during the same financial year (section 49(1) of the Law).
The members of the of the board of directors of an institution are obliged to submit to the Registrar, at the latest within seven (7) months from the end of each financial year, the accounts and relevant report prepared by a certified auditor.
Definition of Societies and Acquisition of Legal Personality
Society is defined by The Societies and Institutions and other related Matters Law of 2017 (104(I)/2017), as amended (the “Law”), as an organised association of at least twenty (20) persons that is established for the accomplishment of a common objective (section 2 of the Law).
Societies acquire legal personality as of the date of their registration in the Register of Societies, Clubs and Institutions (the “Register”) by the competent District Officer of the relevant district who is responsible in relation to any matters in connection with the registration and operation of Societies, Clubs and Institutions, and the issuance of the relevant registration certificate (the “Registrar”) (sections 2 and 5 of the Law).
Registration of Societies
For the purposes of registration of a Society, a written application must be filed with the Registrar by the board of directors of the society or the founding members thereof. The aforesaid application shall be accompanied by the Articles of Association of the society which must be executed by its founding members and bear an execution date, and the relevant forms including information as the names, addresses and contact details of the founding members and the members of the society’s board of directors, copy of the emblem of the society (if any) and a description of the immovable and movable property belonging and/or possessed by the society at the time of registration thereof and/or any immovable and movable property that is to be transferred to the Society after its registration in the Register (section 7(2) of the Law).
The Registrar shall proceed with the examination of the relevant application for the society’s registration, without any delay, and in any event within three (3) months as of the date of submission of the relevant application and all the necessary, duly filled in forms and documentation (section 7(4) of the Law). Provided that the requirements under the applicable Law and regulations are met, the Registrar will proceed with the registration of the society in the Register and the issuance of the relevant registration certificate upon payment of the prescribed fee (section 7(4) of the Law). The registration certificate shall be published in the Official Gazette of the Republic and will constitute conclusive evidence of the date of registration of the society and of compliance with all legal requirements.
Articles of Association of Societies
The Articles of Association of a society shall be deemed as acceptable for registration purposes, provided that this includes and/or addresses the following matters:
- The Society’s name, object(s) and registered office, which shall be located in the areas controlled by the Republic of Cyprus;
- The society’s resources;
- The terms of admission, resignation, expulsion of members, and the rights and duties of the society’s members;
- The manner and the body of representation of the society in Court and out-of-Court cases;
- The terms of alteration and/or modification of the Articles of Association of the society;
- The manner of auditing of the society’s accounts, in accordance with the principle of transparency;
- The terms relating to the convocation and holding of the meetings of the society’s members, the manner the decisions are taken, as well as the term that a members’ meeting is held at least once, on an annual basis;
- The administrative body of the society, the process of election of its board members, the term for which the members of the board will remain in office, the terms of formation and operation of the administrative body, the dismissal of its members and the frequency of their meetings;
- The terms relating to the society’s dissolution and/or merger with another society, as well as terms in relation to the utilisation and/or exploitation of the society’s property in case of dissolution thereof, as such property cannot be distributed to the society’s members.
Administration of Societies
Societies must be administered by a board of directors consisting of at least five (5) members, who, unless otherwise provided in the Articles of Association of the society, shall also be members of the society. Decisions are taken by absolute majority of the members that are present in the meetings, unless otherwise provided in the society’s Articles of Association (section 16(1) of the Law).
Provision of services without the payment of remuneration
No remuneration shall be payable to the members and/or administration members of the society in relation to any services they may provide to the society, unless otherwise provided in the society’s Articles of Association (section 18A of the Law).
Membership is non-assignable
Membership in societies is not eligible of representation, and cannot be assigned and/or inherited (section 15 of the Law).
Admittedly the terms “tradename” and “trademark” are usually confused because of their similarities (to some extend), which however -in fact- distinct the said terms between them.
In so far as tradenames are concerned, these can be registered at a national level (with the Department of Registrar of Companies and Intellectual Property (“DRCIP”) of the Republic of Cyprus) and such a tradename registration afford the owner of the respective trademark (whether physical or legal person) the right and the ability to carry on its business activity using the said tradename. It is important to note that national tradenames may only be comprised of words (ie word marks) and are not considered as entities having separate legal personality. Last but not least, it is essential to note that the registration of a national tradename does not afford any intellectual property protection over the said tradename.
On the other side, a trademark may comprises, among others, of words, figures, shapes, positions, patterns, colours, sounds, motion, multimedia, holograms or combination of such elements, while, depending on the geographical extent of the protection to be afforded and the particular needs of the owner thereof, a trademark may be registered at a national level (eg in the Republic of Cyprus), at a community (EU) level or at an international level.
A national trademark is only protected at a national level (ie only within the Republic of Cyprus) while not maintained and protected internationally; thus, a Cyprus trademark will only give its owner national protection. In the course and for the purposes of the registration of a national trademark, and in any event before applying for the registration thereof in Cyprus, searches must be contacted in order to find out the eligibility of the trademark to be registered and, in particular, whether (i) the trademark is capable of registration and (ii) there is a similar or identical trademark, already registered. In terms of the procedure for the registration of a national trademark, following completion of the search for its eligibility for registration, an application is submitted to the DRCIP to this end. Upon examination of the application, which may take approximately a couple of months, the DRCIP shall proceed with the publication of the notice for the registration of the trademark in the Official Gazette of the Republic of Cyprus. The Registrar (heading the DRCIP) will not grant its permission for the registration of the trademark, unless a period of three (3) months from the publication date has been lapsed. In the absence of any objections against the registration of the trademark, the Registrar registers the trademark and issues the respective certificate. The registration of the trademark remains valid for a period of ten (10) years from the date of registration and must be renewed (at a cost) at its expiration.
Where broader protection (within European Union is required), a trademark may be registered at a community level. More specifically, a community trademark offers its owner enhanced protection since a community trademark is well protected in all countries of the European Union on the basis of a single registration with the competent authority. At first stage, before proceeding with the submission of an application for the registration of a community trademark, searches must be contacted in order to find out whether (i) the trademark is capable of registration and (ii) there is a similar or identical trademark, already registered. Then, an application for the registration of a community trademark is filed. Upon examination of the aforesaid application and provided that no errors or defaults will be detected, the desired tradename will be published in the Community Trademarks Bulletin (translated in all the official languages of the European Union) giving everyone the right to object to the application. The period granted for oppositions is three (3) months from the publication date. In the absence of any objections against the registration of the trademark, the approval for the registration of the community trademark is granted. Kindly note that the registration of the trademark is valid for a period of ten (10) years from the date of its registration whereas once it is registered, the trademark is established as a trading name and protection is given for non-EU jurisdictions as well, provided that the trademark will be a well-known and recognized mark (subject to the laws and regulations of such other non-EU jurisdictions). In this respect, it is worth noting that even if the registration of a community trademark is approved, if the trademark is not used within the European Union within five (5) years from its registration, its cancellation may be requested. In addition, it should be noted that such a trademark will also be vulnerable to attack in the event that the trademark is not used for all the goods and/or services, as the case may be, which have been specifically declared on the application form.
Moreover, where enhanced protection is sought outside the European Union, a trademark may be registered at an international level, in which case, protection is granted in the countries where the trademark is specifically registered. In this respect, it is worth noting that there two options in securing the registration of an international trademark. The first one is, after the conduct of all appropriate searches for verifying that (i) the trademark is capable of registration and (ii) there is a similar or identical trademark, already registered, to file an application directly to the competent international organization. The second option is to follow the procedure for the registration of a national trademark and then, upon registration of the trademark at a national level, proceed through the DRCIP with the filing of an application for the registration of the same trademark with each of the third countries where protection is needed (district registration in each country). In any event, the terms and the duration of validity of the protection to be afforded over the trademark depend on the laws and regulations applicable in each third country where the trademark is to be registered.
In light of the above, when someone is considering on whether to proceed with the registration of a tradename or a trademark, the first point to decide on is the nature of the mark and whether intellectual property protection is also sought. In the event that the said test results in the registration of a tradename, then the situation is relatively simple. If, however, it turns that the registration of a trademark would better suit the needs, then the scope and geographical extent of protection for such a trademark must be analysed.
First and foremost, it should be stressed that in order for a third country national to be employed in the Republic of Cyprus (areas controlled by the government of the Republic of Cyprus), it is a prerequisite to obtain a Temporary Residence and Work Permit or equivalent approval following filing of an application to this end to the Civil Registry and Migration Department (Migration Section) of the Ministry of Interior (the “Civil Registry and Migration Department (Migration Section)”). In this regards, it is of particular importance to stress that by securing a temporary or even permanent residence permit, a third country national is not entitled to be employed in the Republic of Cyprus unless so is expressly provided in the terms of the specific permit and/or of the scheme under which the permit is obtained. The procedure to be followed, the supporting information / documentation required and the timeframe for the completion of the process vary in accordance to the specific type of permit.
Generally speaking, Cyprus legislation makes provision for sector-specific categories in which third-country nationals may be temporarily employed for the purpose of performing work, depending on their status in the Republic of Cyprus and/or the type of permit for which they have or are going to apply; such categories include, among others, general employees (admitted in sectors where there is need for support in the absence of local or European personnel), domestic workers, food handlers, athletes, coaches, livestock labourers, agriculture workers, priests, nurses, bartenders, creative artists, performing artists, creative supportive staff and the supporting staff of a performing artist. Of course, there is also the option for an employer to employ high-skilled third country nationals, in which case the procedure is more concise. In any case, the rules, terms, conditions as well as the volume of admission of third-country nationals to any such specific categories are determined by the Council of Ministers considering and/or relying on the proposal of the Minister of Labour.
A crucial criterion for applying for most of the types of work permits available, is for the employer to obtain and/or secure an approval from the Labour Department (Ministry of Labour, Welfare and Social Insurance) (the “Labour Department”), which is the competent authority for securing that there are no Cypriots or citizens of Member States of the European Union, available or adequately qualified for the specific job or post prior to recommending the employment of third country nationals. To be more precise, the employer who is interested in employing third country national(s) must, upon receipt of the approval from the Labour Department, submit an application accompanied by -among others- the contract of employment and the remaining documents certified by the Labour Department, for the purpose of acquiring an entry visa that will enable the third country national to enter the Republic of Cyprus (in case he/she is not already in the Republic of Cyprus) and then, upon the arrival of the third country national in the Republic of Cyprus (if applicable), proceed with the submission of the main application for the registration and acquisition of the respective residence and work permit, depending on the type and nature of employment.
Apart from the above, there is also the option to transfer a third country national from a foreign company to a company situated and operating in the Republic of Cyprus. more specifically, the Civil Registry Law (Cap.105) has been amended for the purpose of accommodating the provisions of Directive 2014/66/EU of the European Parliament and of the Council of 15 May 2014 on the conditions of entry and residence of third-country nationals in the framework of an intra-corporate transfer (the “EU Directive 2014/66/EU”) relating to the intra-corporate transferee permit (ICP) that can be granted in order for third-country nationals employed by an employer entity or undertaking established in a third country to be able to be employed by an employer entity or undertaking of the same group of companies established in the Republic of Cyprus. In this regards, it is important to stress that in order for the involved undertakings to be qualified as part of a group of companies, the said entities or undertakings must be considered as linked in any of the following ways:
(a) one of the undertakings holds, directly or indirectly, the majority of the subscribed capital of the other;
(b) one of the undertakings controls the majority of the votes attached to the issued share capital of the other;
(c) one of the undertakings is entitled to appoint more than half of the members of the administrative, management or supervisory body of the other; and
(d) the undertakings are in fact managed on a unified basis by a common parent undertaking/owner.
In light of the above, it must be underlined that in order for an employer to be eligible to obtain a work permit for an intra-company transferred employee, it is a prerequisite that the said employer forms part of a group of companies within which the transfer shall take place, while such an employer must prove its good standing and clean criminal record, as well as its compliance with all its legal obligations, including the settlement of taxes and the payment of contributions for employees. In the same way, it is extremely important for the involved entities or undertakings, namely the foreign entity and the Cyprus one, to be able to prove the employment existing or future relationship, as the case may be, between each of them and the intra-company transferred employee by providing official documentation to this end, issued by the competent governmental authority or body of the respective jurisdiction.
All in all, there are different procedures on the basis of which a third country national may be employed in the Republic of Cyprus while each type of residence and work permit is subject to a series of benefits, limitations and restrictions. Lastly, we cannot disregards the fact that, apart from the classic / standard procedures for the general employment of third country nationals, the government of the Republic of Cyprus, in order to adapt to the evolved needs of our times, has also developed various schemes, strategies and programs that were in force from time to time while it has recently introduced and does currently apply a Strategy for attracting, among others, businesses of foreign interests for activities or/and expansion of their activities in the Republic of Cyprus, which may also serve the needs for the employment of third country nationals in various key positions provided that the employer and each of the prospective employees satisfy the relevant criteria set forth in the said Strategy.
Introduction
Recently, the Civil Registry Law of 2002 (L.141 (I) 2002) has been amended, to introduce provisions on the electronic identity card (“EID”). More specifically, chapter three of the Civil Registry Law establishes the legal framework governing the EID matters. The new EID was created to help individuals to prove and verify themselves, without visiting the competent authorities and/or departments in person. EID users will therefore gain access to the Government’s online services, by purely using their EID.
An example of the use of the EID in private sector would be that of the banking services, where an interested party will be able to use the EID when applying for a bank loan, without having to visit the commercial establishments of the bank. Although this constitutes a common practice abroad, Cyprus authorities have not yet adopted the use of the EID in online services sector. Hence, the Government has initiated the proceedings for establishing the EID regime in Cyprus.
What is an EID?
An EID is a digital ID that can be used in the place of an ID card and can be stored digitally. EID is particularly useful for individuals who wish to prove and verify their identity electronically and gain access to various online services, offered both in public and private sector, in Cyprus and across the European Union (“EU”).
The purpose of the EID
The purpose of the EID is to provide a safe and convenient way to individuals to prove and verify their identity online, every time they access a public or a private service. Therefore, individuals will be able to arrange any outstanding obligations they might have electronically anywhere in the world, at any given time, without having to visit in person the competent department/authority. EID is therefore equivalent to an identity card and is considered as a valid, safe, and reliable method to access online services.
It is worth noting that the electronic identity card is recognized in all Member States, so EU citizens can use the EID for identification purposes anywhere in the territory of the EU. One of the reasons that EU decided to adopt the concept of an EID is to eliminate the leak of personal data, especially during the sign up procedure on social networks and websites. In a few years’ time, EID will be used in such a way that users will no longer need to provide their personal details and data to every website that they are signing up and creating an account.
Who is eligible for electronic identity?
According to article 65A of the Civil Registry Law, a person who satisfies the following criteria has the right to apply for an EID in the Republic of Cyprus:
- Has a Cypriot citizenship
- Is over 18 (eighteen) years old
- Holds a valid biometric ID card issued by the Republic of Cyprus
- Does not hold any other valid EID
How can I apply for Electronic Identity?
According to the decree issued by the Ministry of Interior on the basis of article 65G of the Civil Registry Law, the application for the issuance of an EID can be submitted either electronically or in person, by visiting the premises of the EID provider. It must be noted that the EID provider will be a private company, which would be in charge for the operation of the authentication and verification procedure of the EID applicants. The name of the EID provider is yet to be announced.
The EID provider will double check the applicants’ details and if they are valid and verified, it will then communicate with the officer in charge from the Civil Registry Department. The latter will approve or reject the application and he/she shall inform the EID provider accordingly. It should be noted that the whole procedure for the issuance and renewal of an EID will take up to five (5) working days from the date of the submission of the relevant application. According to article 65A (7) of the Civil Registry Law, EID will be valid for three (3) years. The holder of an EID also has the right to renew his/her EID before its expiration date. The EID can be suspended or revoked, where deemed necessary.