Limited ( Ltd )
The Limited Liability Company is the normal private company in Cyprus. Most companies operating in Cyprus are private limited companies (Ltd). We can incorporate a Cyprus Limited company for you in five days (or same day for Shelf Company).
Memorandum and Articles of Association
All Limited Liability Companies must prepare a Memorandum and Articles of Association.
The Memorandum specifies the activities in which the Company may engage. More specifically, the first three main object clauses must include the main proposed activities of the Company.
The Articles of Association specifies the rules governing the internal management of the Company. That is why it must be written lawfully and carefully, as is the life of the company.
Authorised and Issued Share Capital
The Share Capital must be expressed in Euros. There is no legal requirement as to the minimum or maximum Share Capital of the Company.
The “authorised” capital, therefore, is the amount declared when the company is being registered and is in fact a limit beyond which the directors, if desiring to increase it, must convene a General Meeting of the shareholders and seeks its approval.
The “issued” capital is that part of the authorised capital which is subscribed by the shareholders and is in substance equal to the sum of the issued shares. It does not mean, however, that the whole issued capital is paid up by the subscribers.
Shares
Shares, as known, may be issued either for cash or for consideration other than cash (in kind) and represent always a portion of the company’s capital. There are some other differentiations as far as shares are concerned which are of greater importance from the point of view of foreign investors.
Ordinary Shares
The ordinary subscriber to the capital of a company takes what are called “ordinary shares”. These normally provide the bulk of the joint stock.
Preference Shares
Subscribers to the share capital, however, may not wish to take up the full position which is involved in being an ordinary shareholder. In order to satisfy this type of shareholders, the “preference” share was invented, by means of which he may be assured of a first call on such profits as may be made and on such capital as may be available in a winding up. A preference shareholder with such rights begins to approximate the subscriber of loan capital (the debenture holder described below) and, indeed, preference shares are often referred to as “prior charges” for this reason. The holder of a preference share is a member of the company and his dividend can be paid only out of profits.
Debentures
Many companies usually finance a great deal of their business, even long term business, by means of borrowed money. The document by which the company’s assets are secured to the lenders – whether by fixed mortgage or charge or floating charge or by a combination of both – is called a debenture, and the lenders holding such security, debenture holders.
Beneficiary Shareholders of the Company
The minimum number of Shareholders is one. There are no legal shareholding requirements. If anonymity is required, the shares may be held by one of the trustee Companies provided by AES Globaltrench. Specifically, the following information is needed for each Beneficiary Shareholder:
- -Full name
- -Biography, stating: residential address, telephone, facsimile numbers and e-mail.
- -Nationality
- -Occupation
- -Number of Shares to be held
- -Statement outlying the business activities of the company
- -Certified international passport copies or Identity Card (for Commonwealth of Independent States – former USSR (CIS) citizens are required to provide us with a certified internal passport (first three pages and page stating the residential address); for citizens of all other countries required are documents as a proof of residential address such as utility bills, phone bills, bank statements etc., in their original form or certified copies).
Directors of the Company
The powers of the directors are determined by the provisions of the Articles of Association. It is usual to make provision for general and worldwide powers to conduct the business affairs of the Company, with perhaps some limitation on borrowing powers.
Appointment and Removal of Directors
Appointment of Directors is determined by the Company’s Articles of Association and is a power usually vested in the general meeting or, in some cases, in certain classes of shares. Directors may be dismissed by ordinary resolution of the shareholders.
Company Secretary
Under the Companies Law, Cap.113, a Company Secretary is required. The Secretary acts under the control and instructions of the Directors, keeps the Company’s statutory registers and performs ministerial functions of a non-executive character. A Company Secretary may be a natural person or a legal entity, and may also be a resident of Cyprus or a foreign person. In this respect, a company secretary may be provided by AES Globaltrench. An assistant secretary may also be provided by us.
Registered Office
All Companies must maintain a registered office in Cyprus. The registered office is the address where writs, notices and other official documents can be served upon the Company. Companies established in Cyprus are free to operate from the office of accountant, or from their own office should they decide to set up management office in Cyprus. In that case we make available the Virtual Finance Office (VFO).
Shelf Company
This is a company or corporation that is inert and carries no active functions. The shelf company that has had no activities can then be sold to person(s) who have interest in it and do not want to go through the procedures of starting a new company. Usually there are numerous reasons and interests making one want to purchase a shelf company. Some of the reasons are:
The buyer will have the opportunity to start a business as soon as possible
- -Time saved due to the fact that no procedure needs to be done
- -To create a sense of trust and boost to other investors to do business with you.
- -To get access to resources such as loans and other credits
- -To gain leeway in investing capital
- -Credit History
A shelf company is formed and may be referred to as Blank Check Company. The only requirement that is needed is the transfer of the company’s shares to the buyer by the seller. After this the ownership is yours and you can rename the company or keep its original name and start doing business.