Restructuring and Insolvency Lawyers in CyprusUpdated on Tuesday 29th November 2016
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The restructuring and insolvency of a company in Cyprus is performed is based on the Companies Law Cap 113, which prescribes the legal modalities for closing a business voluntarily or compulsorily. In 2015, the Cypriot government enacted new regulations on the insolvency legislation, which were also applicable to the Companies Law. Our lawyers in Cyprus can offer legal advice on the applicable legislation and can guide the process of winding up a company.
Legislation for closing a company in Cyprus
The Companies Law states that there are two legal options for closing down a business:
A compulsory procedure is determined by a local court, which must receive a petition from one of the company’s stakeholders – such as a creditor.
The voluntary procedure is started by the representatives of the company, after assessing the current condition of the respective business. In this sense, the management of the company will present a resolution related to the insolvency of the business. The company can be dissolved when the founders of the business proceed to the liquidation procedure. More details about the procedure can be further explained by our attorneys in Cyprus.
Liquidation of a company in Cyprus
Following the new regulations imposed in 2015, the liquidation procedure can be performed in the conditions presented below:
• a creditor can file for liquidation if the minimum debt is of EUR 5,000 (while previous the sum was established at EUR 854);
• the procedure of compulsory liquidation must be completed within 18 months since the decision was taken;
• the liquidator that will handle the procedure can be appointed by a Cypriot court or by the company’s creditors;
• all liquidators must have a license attesting their profession.
Restructuring a company in Cyprus
Companies in Cyprus can be restructured with the following purposes:
• for short term liquidity;
• to establish a merger, which will provide a better taxation scheme.
The procedure will be initiated by a representative of the company, which can be a creditor or a member. This is applicable to all companies registered in Cyprus, but there are several exemptions which refer to banks and insurance companies (such entities are regulated by different procedures).
Our law firm in Cyprus can offer legal representation in a Cypriot court for those who are involved in a restructuring and insolvency procedure. Please contact our attorneys for more details.