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Recent amendments to the Cyprus Companies Law, Cap. 113.
The Companies Amending Law, 149(I)/2018 (the “Amending Law”) which was published in the Official Gazette of the Republic of Cyprus on December 2018, introduced certain changes to the Companies Law, regarding fees and procedures in order to achieve a more competitive business environment.
Some of the changes came into force at the date of publication of the Amending Law, whereas others shall come into force by the end of 2019 or upon announcement with more guidance from the Cyprus Registrar of Companies (the “Registrar”).
The key amendments are:
The key amendments are:
1. Introduction of Administrative Fines for late filings
The Registrar of Companies (RoC) shall impose an administrative fine for late filing of the below notifications:
a) Notification in relation to the change of a company’s registered office: Any change of the registered address of a company shall be notified to the Registrar within fourteen days.
b) Notification in relation to particulars of directors, company secretary and related changes: Any change in relation to particulars of directors, company secretary and related changes shall be notified to the Registrar within fourteen days.
c) Notification in relation to the transfer of shares: Any transfer of shares shall be notified to the Registrar within fourteen days from the registration of the transfer in the Register of Members of the company.
d) Notification in relation to the allotment of shares: When a company makes an allotment of shares, it should notify the Registrar within one month from the date of the respective resolution. It is notable also that upon expiry of the deadline of a Court order for the extension of time for the filing of the allotment, a charge shall be imposed.
e) Notification in relation to the filing of annual returns: Annual returns must be filed within 28 days from the date of their preparation
The fine for all notifications shall amount to €50 plus €1 for every day for which the default continues, such fine shall not exceed the amount of €250 for each default, except for the Annual Return, for which the fine shall amount to €50 plus €1 for every day for which the default continues within a 6 months period plus €2 for every day thereafter for which the default continues, with a maximum of €500 for each default.
2. Abolition of capital duty
The fee of 0,6% paid upon the registration of a company is abolished resulting to a decrease in overall company formation expenses. Furthermore, the same shall apply upon the increase of a company’s nominal/authorized share capital.
3. Company secretary
Subject to the latest amendments, each company must have a sole secretary. This however does not affect the appointment of an assistant secretary.
4. Change of name
A Cyprus company, on changing its name, must give 15 days’ notice from the day of adoption of the relevant resolution to the Registrar.
5. Allotment of shares
Private companies are excluded from the obligation to attach the relevant contract in case where an allotment of shares is paid in kind (whether partly or in full). Public companies are not excluded from such obligation.
6. Filing of Pledges over the shares
By an announcement on 19 March 2019 the Registrar clarified that they will no longer accept applications for registration of share pledges in Cyprus Companies. Such pledges, as opposed to pledges given over foreign companies’ assets, are not registrable according to Cyprus Companies Law.
7. Members and Creditors protection regarding strike-off
Members or creditors of a company, on an equal basis with directors, may, within 3 months from the publication of the relevant announcement in the Government Gazette, apply to the RoC objecting to the striking-off of a company.
8. Court Order to bring the company up to date upon re-instatement
The Court is given the power to order:(i) that documents and returns be filed to the RoC to bring the company’s filing requirements up to date; (ii) that all fees due by the company are paid; and (iii) that the Company pays all costs in relation to the restoration of the company.
9. New power to the Registrar to reinstate struck-off companies
A member or director can apply to the RoC to re-instate a company which was struck-off on the basis that it was not carrying on a business or did not pay the annual levy. The RoC has the power to re-instate the company without the involvement of the Court. Such application must be made within 24 months of the strike-off provided that: (i) the relevant company was carrying business at the time of strike-off; (ii) the company is brought up to date with its filing requirements; (iii) the company pays all fees, levies, penalties and fines due to the RoC; (iv) the fee of reinstatement is paid; and (v) the RoC has good reason to believe that the strike-off has caused a disadvantage to the applicant.
The executive reinstatement does not affect the right of the applicant (a director or shareholder) to apply to court within 12 months of the reinstatement for a court order approving reinstatement and ordering the reinstatement of all officers to the positions they held before strike-off.
The reinstatement of the company in the register does not affect any rights and obligations of the company in connection with any debt or any contract made by the company in the period between the date of strike-off and the date of reinstatement.
The RoC will publish in the Gazette the date upon this amendment shall become effective.
10. Particulars of overseas companies having a place of business in Cyprus
Subject to the latest amendments, additional information shall be filed with the RoC by overseas companies. Such information includes (i) changes to the names or addresses of the persons authorized to represent the overseas company and their place of business in third party transactions, in Court and vis a vis competent authorities; and (ii) changes to the address of the place of business of the overseas company.
11. Replacement of Official Gazette
An “electronic official Gazette” (via the Registrar’s website) has been introduced which aims to replace publications in the Official Gazette.
12. Amendments to the Cyprus Companies Regulations (ΚΔΠ 368/2018)
New forms shall replace all statutory forms of the RoC.