New Cypriot Company Law Amendments
There have been various amendments to the Cypriot Companies Law framework in mid December 2018. These were brought forward with Law 149(I)/2018, the Companies (Fees and Rights) (Amendment) Regulations of 2018 (Κ.Δ.Π. 364/2018) and the Companies (Amendment) Regulations of 2018 (Κ.Δ.Π. 368/2018) it should be noted however that most of these amendments have not been put into effect.
The aim of these amendments is to modernize the overall legislative and operative framework of Cypriot companies and at the same time to simplify processes.
The most notable amendments are the following:
(A) Introduction of administrative fines for late filings of notifications to the Company Registrar.
The Companies Law (Cap 113) traditionally provided in certain instances for fines to be paid for the non-filing of certain notifications. In practice this was never enforced.
The current amendments clearly aim to enforce the payment of administrative fines for the late filing of notifications for the allotment of shares under section 51, notifications for change of registered address under section 102, notifications for transfer of shares under section 113A, notifications for change of the directors and secretaries (or the updating of their personal details) under section 192 and the notification for changes of an overseas company under section 349. The administrative fines for the late filing of the abovementioned notifications shall amount to EUR 50 and an additional charge of EUR 1 for each day of continuation of the delay with a maximum total fine of EUR 250 for each delay. These changes will be effective on the 18th December 2019.
Of significant importance is the imposition of fines for the late filings of annual returns under section 120, being a penalty of EUR 50 and an additional charge of EUR 1 for each day of continuation of the delay in the first 6 months and a further charge of EUR 2.00 for each day for which the default continues with a maximum total fine of EUR 500 for each delay. These changes will again be effective as of the 18th December 2019.
(B) Strike- off of Companies.
A notable upcoming change is the “Administrative reinstatement of a company” (section 327A) which allows a member or a director to apply to the Company Registrar within 24 months of the date of the strike-off, without applying to Court, requesting for the reinstatement of the company. The applicant needs to show that the company was carrying business at the date of its strike-off, all its filing requirements have been updated and all fees, levies and penalties have been paid. In addition the Company Registrar must have a good reason to believe that the strike-off caused a disadvantage to the applicant. This change is up until today not yet effective. The effective date is expected to be published in due course.
(C) Abolition of Capital Duty.
Furthermore, in accordance with the Companies (Fees and Rights) (Amendment) Regulations of 2018, as of the 18 December 2018, no capital duty shall arise on the authorised share capital of a company on incorporation and on any subsequent increases of the company’s authorised share capital. This amendment clearly aims to reduce costs either on incorporation or on subsequent capital operations. This change was made effective as of the 18th December 2018.
(D) Introduction of new company forms and procedures.
The Companies (Amendment) Regulations of 2018 (Κ.Δ.Π. 368/2018) introduced a series of modern forms and procedures aimed at simplifying processes and the overall day to day administration of companies. This change is not yet effective. The effective date is expected to be published in due course.
For additional information and clarifications feel free to contact us at: info@zambartaslegal.com, Tel:+357 22262108