Amendments to Cyprus Companies Law, CAP 113
Following recent amendments to the Cyprus Companies Law, Cap. 113 (the “Law”), the Registrar of Companies has now introduced new provisions aiming in further modernising the current legislative framework which shall be effective from 18th December 2019 onward.
A. Late Filing Penalties
1. Annual Return
The Registrar of Companies will now impose an administrative fine for the late submission of the annual returns of each Cyprus of (i) €50; plus (ii) an additional charge of €1 for each day of delay for the first 6 months and thereafter €2 for each day of delay, up to a maximum of €500.
Therefore, all companies which by 18th December 2019 have not yet prepared audited financial statements for all years up to 2018 and as such have not yet filed annual returns for all years up to 2019 will be subjected to this administrative penalty. Please note that the annual return for the year ended 2018 must be submitted by 28 January 2020.
The Registrar of Companies will also impose an administrative fine for late filing of the following notifications. The aim is to encourage companies to proceed with timely notifications to the Registrar of Companies: -
Allotment of shares (one month from the date of the relevant allotment);
Change of the company’s registered office (28 days from the date of change of registered address);
Transfer of shares (14 days from the date of the registration of the transfer in the register of members);
Change of the company’s directors and or their respective details (14 days from the date of the relevant change).
We note that the administrative fine shall amount to €50 plus €1 every day onwards counting from the day the deadline was exceeded and shall not exceed €250 for each late submission.
B. Appointment of a Company’s Secretary:
The Law provides that each Cyprus company must have only one secretary appointed at all times; therefore, a Cyprus company is not allowed to have jointly appointed company secretaries.
C. Procedure of registration for the allotment of shares payable in kind:
Please note that the Law states that a Cyprus company is no longer obliged to submit with the Registrar of Companies the relevant contract for the registration of the allotment of shares of a company which are fully or partly paid up in kind.
D. Struck-off companies and re-reinstatement:
1. Members and Creditors protection
Any member or creditor of a company may object to the striking-off of a company within the period of 3 months from the relevant publication in the Gazette.
2. Court Order regarding re-reinstatement
The courts are now given the power to order (i) that documents and returns be filed to the Registrar of Companies to bring the company’s filing requirements up to date, (ii) that all fees due by the company are fully paid and (iii) that the Company pays all costs of the Registrar of Companies in relation to the restoration of the Cyprus company
3. Simplified procedure regarding the re-reinstatement of a struck-off company
A shareholder or director can apply to the Registrar of Companies to re-instate a company which was struck-off without having to initiate a court procedure to re-instate a company. Therefore, the Registrar of Companies will have the power to re-instate the company without the involvement of the court subject to the fulfillment of the following conditions:
the application is submitted within two years of the date of strike off of the company;
The company was conducting business at the time of strike off;
All up-to-date returns, filings and financial statements have been prepared and submitted;
All relevant levies, costs and penalties related to late filings and returns which incurred before the strike-off of the company have been paid;
An administrative fee for reinstatement of the company has been paid; and
The Registrar of Companies has reasonable grounds to believe that the strike-off has placed the applicant, either the director or shareholder, in a disadvantageous position.
Please note that this provision will be effective upon the Gazette publication by the Registrar of Companies.
4. Abolition of the 0.6% duty on the share capital of a Cyprus company
Following this amendment, the 0.6% charge is no longer applicable on the share capital of a Cyprus company on its incorporation as well as when the Cyprus company proceeds with the increase of its share capital.
How MPC LEGAL can help?
Ensuring all statutory obligations are followed by the company within the specified timeframe;
Submission of the relevant filings on company’s behalf with the Registrar of Companies;
Keeping you updated regarding the ongoing amendments of the CAP 113 and relevant timeframes;
Drafting the necessary corporate approvals approving the financial statements of the company and drafting and filing annual returns with the Registrar of Companies.
Advising on corporate governance and housekeeping of the Company.