Cyprus Company Law provides for a member led voluntary winding up of a company. In order for this to occur the company must be solvent. The voluntary winding up of a Cyprus company is formalised in Article 261 – 292 of the Cyprus Companies Law.
Below is a summary of the processes involved in the voluntary wind up of a Cyprus Company.
In order to arrange the voluntary winding up of a company then a statutory declaration must be made by the Directors that the Cyprus company is solvent and able to pay all its debts. The statutory declaration that must be made at a board meeting by the directors is that a full inquiry has been made into the company’s affairs and in doing so it has been concluded that the company can pay its debts. Following the declaration of solvency, a general meeting will be convened at which the members of the company will pass a special resolution resolving to proceed with the voluntary winding up of the company. This is the date of which the voluntary winding up is deemed to commence. From this date the company shall cease to carry out business except that required for the purpose of the winding up procedure.
During the meeting at which the voluntary winding up is passed a liquidator must be appointed. They are responsible for the winding up of the company affairs and distributing the assets of the company. It is required within 14 days to give notice of the resolution by advertisement in the official gazette. This provides an opportunity for any claims against the company to be put forward. Within 5 weeks of the passing of the resolution for the winding up of the company a declaration must be made and filed with the Registrar of Companies. This declaration must contain a statement of the company’s assets and liabilities.
Debts must be paid in full within 12 months from the commencement of winding up. Once all company debts are settled then a tax clearance certificate is obtained. As soon as this process is completed then the liquidator will call a general meeting of the company. This is done by advertisement in the official gazette one month before the meeting. During this meeting the liquidator will present an account of the winding up, how it has been conducted and how the company’s property has been disposed of. Any remaining funds are distributed to the Shareholders. Within a week of this meeting taking place a copy of this account must be submitted to the Registrar. Within approximately 3 months from this date of filing the company the Registrar of Companies will issue a certificate of dissolution and the company is deemed to be dissolved.
As can be seen the process is very straightforward and assuming that there are no undue complications the estimated timeframe of the Voluntary Wind Up of a Cyprus company is approximately 6-8 months. Eltoma can initiate and manage the process to conclusion.