The procedure for the incorporation of a Cyprus Legal Entity can be completed within a maximum period of two weeks at the most, and enables the legal entity to start business forthwith.
The company name must be officially approved by the Registrar of Companies. On applying to the Registrar for the approval of a name, it is recommended that two or three possible names ending with the word “limited” be submitted as this may avoid unnecessary delays. Applicants should however, bear in mind that a name is not likely to be approved if:
- it is similar to the name of an existing company
- it is considered misleading or confusing
- it implies links with royalty
- it includes the word “Imperial”, “National”, and “Corporation, Commonwealth “ or Co-operative.
Where a subsidiary company proposes to adopt the name of its parent company, the latter must furnish its written consent for the use of its name. Once the approval of the Central Bank has been obtained, the next step is the registration of the company.
For a company to be registered, the following documents and information must be filed with the Registrar of Companies:
(a) The Memorandum and Articles of Association. The Memorandum must state, among other things, the following:
- The name of the company with “Limited” as the last word
- The situation of the registered office
- The objects of the company, which it is advisable that they should be as wide as possible so as to enable the company to engage in any kind of business or activity, without this being “ultra vires” (beyond the powers of) the company and, therefore voided.
- A statement that the liability of the members is limited by shares or by guarantee, when applicable.
- The amount of the share capital and details of the shares authorized to be issued, and
- The subscribers to the memorandum together with the number of shares for which they have subscribed.
(b) The Articles of Association which generally govern the company’s internal procedures and functions.The articles contain rules governing the internal management of the company and regulating the rights of its members among themselves.
The articles may be altered or added to by means of a special resolution, which requires a majority vote of over 75 per cent of the members. The articles deal with matters such as:
- General meetings of the company
- Voting rights of members
- Transfer of shares
- Appointment and powers of directors
- Accounts & Audit
- Specimen memorandum and articles of association, which have been prepared after careful study by lawyers and Focus Business Services, can be made available, but care should be taken that the first few main objects’ clauses are tailored to the specific circumstances and the main business objects of the company.
(c) A list of the directors and the secretary’s name and details. A minimum of one director is required, but there is no maximum. Although there is no necessity to have local directors, this is advisable especially where the provisions of a double tax treaty are going to be utilized; and it is important to show that the company is effectively managed and controlled from Cyprus (tax resident in Cyprus) and that all company decisions are taken in Cyprus. Also, for practical reasons, it is recommended that the Secretary is a Cyprus resident. Directors can also act as Secretaries, but a sole Director cannot act as a Company Secretary, except only in the case of a “one shareholder – one director – one secretary company” when one person can indeed act in all three aforementioned capacities.
(d) The address of the company’s registered office, which will be the place where all official notices will be served.
(e) A declaration or affidavit from a lawyer confirming that all formalities provided by The Companies’ Law have been complied with in relation to the incorporation in question.
Once all the required documents have been lodged with the Registrar of Companies and he has satisfied himself that they are in order, he will issue a Certificate of Incorporation. The formation and registration procedures, including printing of all official stationery and opening the necessary bank accounts, can usually be completed within a period of two weeks, whereupon the company can start operating immediately.
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