A Cyprus company can be voluntarily dissolved either by a members’ voluntary winding-up or through the procedure of striking off from the Register of Companies, in accordance with section 327 of the Companies Law (Cap. 113).
In general terms strike off is a simplified method normally used for companies that have ceased all activities and do not intend to carry on business in the future.
Once the Registrar has published in the Official Gazette notice that the company has been struck off the register, such company is considered as having been dissolved.
A company which has been struck off the register can be restored provided that an application is made to this direction before the 20 years’ expiration period from the publication in the Gazette of the notice of strike off. Therefore, if any creditor of the company is aggrieved by the company having been struck off, the Court, on an application made before the expiration of the statutory prescribed timeframe, if satisfied that the company was at the time of the striking off carrying on business, may order that the company is restored to the register.
Members’ Voluntary Liquidation
A company may be wound up voluntarily if the company so resolves by special resolution.
A members’ voluntary liquidation is a more formal, final and conclusive method of dissolution and an accredited liquidator needs to be formally appointed in order to initiate the liquidation proceedings.
The Insolvency Practitioners Law has introduced new requirements regulating the profession of Insolvency Practitioners and setting out the prerequisites that must be met by persons holding the office of liquidators, an office which is now subject to obtaining a relevant license.
Our firm boasts to have onboard an accredited liquidator who is licensed to act as an insolvency practitioner for all types of liquidations.
Significantly, the liquidator must confirm that the company is solvent in order to be able to proceed with the voluntary liquidation. A statutory declaration (affidavit) declaring that the company is able to pay its debts needs to be made by the directors and this statement needs to embody a statement of the company’s assets and liabilities as at the latest practical date before the declaration. The declaration of solvency must be sent to the Registrar of Companies within five weeks preceding the date of passing the resolution of wounding up the Company. To this end a tax clearance certificate should also be obtained prior to making the declaration of solvency.
In a nutshell, the liquidator will call a general meeting of the shareholders and the full account of his receipts and payments are then presented at the meeting. Such a meeting must be published in the official Gazette at least one month in advance. The Registrar of Companies will issue a Certificate of Dissolution within 3 months from this date of filing of the final liquidator’s accounts and the company is deemed to be dissolved.
For more detailed information, contact our team of specialists at Parparinos Milonas Corporate and Legal Consultants.