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Company Formation

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The following types of companies can be formed under the Companies Law, Cap 113,

i.A company limited by guarantee with or without share capital. This type of company is usually adopted when the purpose of setting up such a company is non profit making, i.e. for charitable purposes. The liability of the members of a company limited by guarantee is limited to the extent agreed upon by the members

A company limited by guarantee may apply to the Registrar of Companies to have the word ‘Limited’ removed from its name and may obtain charitable status after an application to the Council of Ministers.

ii. A public company limited by shares

The shares of a public company are freely transferable and there is no restriction as to the number of members such a company may have

iii. A private company with limited liability by shares

A private company is a company whose articles of association restrict the right to transfer the company’s shares and limit the number of its members to 50 (fifty)

The company’s articles of association prohibit an invitation to the public to subscribe to any shares or debentures of the company

The use of a private company limited by shares is the vehicle most used by overseas investors in Cyprus.

The procedure for the registration of a private limited company is the following:

a. NAME OF THE COMPANY
Before a company can be registered, an application must be made to the Registrar of Companies for the approval of the Company’s name. The name of the company must always contain the word ‘Limited’ or ‘Ltd’, (save only as enunciated in section I hereinabove).

The Registrar of Companies is unlikely to approve a name if it is too similar to that of an existing company; it is considered misleading or too general; it suggests a royal, national or international connection, or it includes certain words such as Co-operative, Insurance, Bank, Financial Services, unless justified by the company’s objects.

b. THE COMPANY’S MEMORANDUM AND ARTICLES OF ASSOCIATION
The Company’s memorandum and articles of association is the constitutional charter of the company and is drafted by a local advocate in Greek and is translated in English. It is divided into two parts:

The Memorandum of Association, which includes the objects and powers of the company particularly as regards its dealings with the outside world, its limited liability status, and the company’s authorized capital.

The Articles of Association, which comprise the regulations under which the company operates as a legal entity and regulates the rights of the shareholders.

The Memorandum and Articles of Association together with the other prescribed documents which are drafted and prepared by the advocate who undertakes the formation of the Company, are filed with the Registrar of Companies.

c. SHARE CAPITAL
The Company’s share capital is expressed in Euros and subject to approval it may be expressed in other currencies.

The company’s memorandum of association enunciates the authorized or nominal capital of the company, which is the total capital which the company is allowed to issue to its shareholders.

The Company’s paid up capital is that part of the authorized capital which has been issued to and has been paid up by the shareholders.

d. SHAREHOLDERS
A private company limited by shares may have any number of shareholders not exceeding 50 (fifty) and the minimum number of shareholders may be only one. person.

An overseas entity may be a shareholder of a Cyprus company and, in such a case, the overseas entity’s corporate documents must be submitted to the Registrar of Companies.

Anonymity: All shares are nominative and in the case of a private company issue of shares to bearer is not allowed; however owners of shares who do not wish to appear as registered shareholders may appoint nominees to act for them as registered shareholders, whilst the actual ownership shall always rest with the beneficial owners of the shares. Nominee shareholders may be Cypriots or foreigners. It is the practice to appoint the firm, which undertakes the formation of the company to settle the nominee shareholding through its members or through companies fully controlled by it. 

e. DIRECTORS
The company must have at least one director. The following particulars must be submitted to the Registrar of Companies for every director: full name, full postal address, nationality, profession, curriculum vitae, and certified copy of passport.

Directors of a Cyprus registered company may be Cypriots or non-Cypriots. It should be noted however that if the directors of such a company are residents of Cyprus, this will be a determinate factor upon whether the company is a resident of Cyprus or not for tax purposes.

f. THE COMPANY SECRETARY
The company must have a secretary in accordance with the provisions of the Companies Law, Cap 113. The Secretary acts under the control and instructions of the directors, keeps the company’s statutory registers, and performs ministerial functions of a non- executive character.

The secretary of a company with a sole shareholder may also be the sole director of such a company.

g. REGISTERED OFFICE
Every company must have a registered office in Cyprus in accordance with the provisions of the Companies Law, Cap 113. The registered office is the address where writs, notices, and other official documents can be served on the company.