CYPRUS Law and Practice Contributed by: George Middleton, Christoforos Iosif and Michalis Kramvis, Chryssafinis & Polyviou LLC
Chryssafinis & Polyviou LLC 37 Metochiou Street Agios Andreas CY-1101
Nicosia Cyprus
Tel: +357 22 361000 Fax: +357 22 678011 Email: chryssafinis.polyviou@cplaw.com.cy Web: www.cplaw.com.cy
1. Types of Company, Share Classes and Shareholdings 1.1 Types of Company The main types of limited liability companies in Cyprus are public and private companies limited by shares or by guarantee. The most common type is the private company limited by shares. 1.2 Types of Company Used by Foreign Investors Foreign investors generally target private limited liabil- ity companies, due to the fact that the upkeep and legal requirements to set these up are less strict than for public companies, which are more tightly regu- lated. Private LLCs continue to be the preference for foreign investors, due to the fact that share ownership is rather stable. 1.3 Types or Classes of Shares and General Shareholders’ Rights The most common type of shares is ordinary shares. The rights attached to ordinary shares are determined and specified in the company’s articles of association. If no rights are specified, it is presumed that shares rank pari passu in all respects with all other shares. The rights attached to shares could include the right to: • receive dividends; • receive notice of and attend and vote at general meetings;
• receive distribution of the company’s capital or assets on the occasion of the company being wound up; and • request the company to redeem the shares con- cerned (in the case of redeemable shares). The articles of association of a company might pro- vide for different classes of shares (ie, non-voting shares, preference shares or redeemable preference shares); the relevant legislation (Cap. 113) is generally respectful of companies’ rights to set up their struc- ture as they wish. 1.4 Variation of Shareholders’ Rights Generally speaking, shareholders’ rights may be var- ied through the passing of a resolution for the amend- ment of the company’s articles of association. As a minimum, such resolution needs to be passed as a special resolution, which requires the approval of 75% of the votes cast at a general meeting. The articles of association of a company may provide for a higher threshold or for the approval of the variation by sepa- rate meetings of the holders of the class of shares affected by the variation of their rights. 1.5 Minimum Share Capital Requirements There is no minimum share capital requirement for a private company limited by shares. For a public com- pany limited by shares, the minimum share capital requirement is EUR25,629. 1.6 Minimum Number of Shareholders A public company is required to have at least sev- en shareholders, while a private limited company is required to have at least one.
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