Companies limited by shares in Cyprus
In this article I will inform you about the modification of Law 144 (I)/2015, which introduced the company limited by shares. The new legislation came into force in 2015. As a result of this particular legislation, Cyprus is now in line with other EU member states including the UK, Poland and Luxembourg. Furthermore, the introduction of companies limited by shares is expected to create new business and investment opportunities and consequently encourage entrepreneurs and investors coming from different EU member states to invest and develop their business plans in the Republic of Cyprus. .
In general terms, the company limited by shares is regulated by the Companies and Trade Names Act, Cap. 116.
According to Chap. 116 there are the following two types of company:
- The General Partnership, in which each partner is jointly and individually liable with all other partners for an unlimited amount of debts and any other financial obligations of the Partnership. It should be noted that a limited liability company or another company can be a partner. Precisely, the Partners of a Company can be mere limited liability companies, or only Companies or both.
- The Limited Company, in which at least one of the partners must have unlimited liability for the obligations and debts of the Company. The remaining partners may have limited liability. It should be clarified that limited liability companies can be partners of a Limited Company, as a partner with unlimited liability.
This article will focus on the provisions of the new regulation and specifically on companies limited by shares.
Before moving on to the presentation of limited partnerships by shares, I would like to point out that according to article 48, the registration of the limited partnership is mandatory. Following the provisions of this particular Law, all limited partnerships must be registered based on the provisions of this Law. In the event that a limited partnership is not registered, then it is considered a general partnership. As a result, each limited partner is considered a general partner.
Companies limited by shares:
In accordance with the provisions of article 47, limited partnerships by shares do not have legal personality, regardless of whether or not they have share capital. In contrast, under the law, a limited company has legal personality at the time of its incorporation.
Another great advantage of companies limited by shares is tax transparency, so any taxation arises at the level of the partners. The particular modification has facilitated the adaptation of alternative investment funds to limited liability companies.
- No company, association or partnership consisting of more than ten persons shall be formed to carry on business unless it is registered as a Company under the provisions of the Companies Act, or any amendments thereto, or otherwise incorporated. in accordance with any other law.
- No company, association or partnership consisting of more than 100 persons shall be formed for the purpose of carrying on any operation that is designed to generate profit for the company/association/partnership, or each member of the company/association/partnership, unless it is registered as a Company based on the provisions of the Companies Act, or any amendments thereto or has been established in accordance with any other Act.