Liquidation/Strike off of a Cyprus Company

We can assist you in liquidating your company. For Members’ Voluntary Liquidation the following steps are necessary

 

Members’ Voluntary Liquidation

The process is initiated by a majority of the directors of each company to be liquidated making a statutory declaration that the company is solvent; i.e. in a position to repay all its debts within 12 months of entering liquidation. Please note that the declaration must be accompanied by an up-to-date statement of the Company’s assets and liabilities. For this purpose up to date accounts must be prepared. Usual practice is for audited accounts to the last year end to be prepared, and management accounts to be prepared for the subsequent period to the accounts.

Waiver or capitalisation of inter-company and/or other debts or assignment of such debts to the Company’s shareholders may prove necessary in order to satisfy the solvency condition. The declaration must be notarised if made outside Cyprus.

The members of the Company then place the company into members’ voluntary liquidation at an extraordinary general meeting at which time the liquidator is appointed. Voting at this general meeting may be through specially appointed proxies. The liquidator informs the Registrar of Companies that the Company has been placed into members’ voluntary liquidation and an advertisement to this effect is placed in the Republic’s Gazette and advertises in an international newspaper for possible claims against the company giving the creditors notice to send in their claims. The Liquidator must ensure that all company creditors including any tax due are settled. The issue of the final tax clearance is a legal requirement for companies in liquidation. Notice of one month for the company’s final general meeting is then placed in the Gazette.

Any surplus funds are distributed to the shareholders. The dissolution certificate is issued, on request, by the Registrar of Companies approximately three months after the final general meeting.

 

Pre-liquidation Issues / Conditions Precedent

By the time a company is placed in Members’ Voluntary Liquidation the following must be implemented, otherwise the appointment of liquidators and placement of the company in Members’ Voluntary Liquidation cannot be completed:
It must have settled all known creditors including accruals for liquidation or other fees, must have closed down all its bank accounts must have either no assets or just one asset in the form of a receivable from its shareholder or a fellow subsidiary and must be in a Net Asset Position.
The parent of the Company to be liquidated must take on the responsibility of settling any liability that arises during the course of the liquidation, all audit work on the Company’s financial statements must be completed and the company should have established a cessation date of activities and Management Accounts prepared to that date in order to facilitate the preparation of a Statement of Assets & Liabilities as well as the issue of the final tax clearance.

We can assist you in order to Strike Off your company

 

The Procedure is as detailed below.

As set out below, the Company may be struck off by the Registrar of Companies, on application signed by its directors. Section 327 of the Companies Law Cap 113 gives the Registrar of Companies the discretionary power to remove from the Cyprus Register of Companies any company which is no longer operational. The procedure is initiated by the directors of the Company writing to the Registrar enclosing a relevant resolution in writing, signed by all the directors, stating that the company has ceased operations and currently has no assets or liabilities. In order to avoid any objections from the Tax Authorities the Company’s tax affairs must be finalised and any liability settled. For this reason up to date audited financial statements and tax computations must be prepared and submitted. Provided no objections are received, the Registrar proceeds with the strike off of the Company within twelve months. The striking off of the Company is officially notified by a publication in the Cyprus Gazette.

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