Liquidation of a company in Cyprus

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Liquidation of a company in Cyprus

Cyprus law requires mandatory liquidation of a company if it ceases to operate.

Sometimes the company’s articles of association may provide for the possibility of cancellation even at the time of registration.

Then the statute must contain the conditions under which the company must be liquidated, the body that makes the decision on liquidation, and the procedure for repaying debts.

Methods of liquidation of the company

According to the laws of Cyprus, there are three ways to liquidate a company:

  • By court decision
  • Voluntarily
  • With the help of judicial supervision

First of all, it should be noted that there are 2 types of voluntary liquidation

  • By decision of the participants, i.e. shareholders of the company
  • At the initiative of creditors

The first type of voluntary liquidation assumes that at the time of initiating the liquidation procedure, the company must be solvent and may or may not have assets.

By the time of liquidation, the company must close all bank accounts, which is confirmed by references, and also prepare liquidation reports.

Stages of the liquidation procedure

  • First. Selection of the date of liquidation: a liquidator is appointed, the director signs a declaration of solvency, affixes an affidavit on it and submits documents to the register of companies
  • Second. Submission of two publications to the newspaper
  • Third. Addition of documents that were not previously submitted to the register of companies

Under standard conditions, after three months, the company must be liquidated. In confirmation of this fact, a certificate is issued by the register of companies.

The advantage of this type of liquidation is the time frame clearly limited by the law and the minimal involvement of the court.

He can only be involved if the appointed liquidator is incompetent and needs to be replaced.

The second type of voluntary liquidation involves a rather complicated and expensive procedure. In fact, it is liquidation through bankruptcy.

Strike-off procedure: administrative exclusion from the register

Based on the resolution from the company’s shareholders, the board of directors makes a decision to exclude the company from the register. All necessary financial statements of the company must be submitted before the procedure begins.

The company must be removed from the tax register and must have a tax clearance certificate. A letter is sent to the registrar of the company on behalf of the director of the company indicating a request to exclude the company from the register and confirming that the company has no outstanding liabilities.

After submitting such a letter, the registrar conducts an inspection of the company and publishes an official notice in the official newspaper of Cyprus about the removal of the company from the register.

The peculiarity of this method is that it is not a full-fledged method of liquidation. After 20 years from the moment the company was removed from the register, it can be restored at the initiative of the tax authority or any interested third party.

The company can be excluded at the initiative of the registrar himself if he becomes aware that the company is not carrying out economic activity or because of the company’s debts; or at the request of the company itself.

This method is suitable for companies that have neither assets nor liabilities to third parties and the state. Although this method is quite quick and easy, it also requires the submission of all financial statements.

If you have decided to liquidate a company in Cyprus, the specialists of the law firm “Prikhodko and Partners” can help you choose the method of liquidation just for you, in order to start and go through the whole process as quickly as possible.

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Lawyer, specialist in corporate law practice, specializes in legal support for businesses in the EU, UAE, USA, opening bank accounts, obtaining licenses.

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