CYPRUS Law and Practice Contributed by: Ioanna Solomou, Stephanos Ayiomamitis, Andria Kouloumi and Lefteris Eleftheriou, Michael Kyprianou & Co LLC
• appointment and removal of directors; • approval of annual financial statements; • changes to share capital (such as issuances or reductions); and • mergers, restructurings and voluntary winding-up of the company. In addition, reserved matters may be contractually agreed in shareholders’ agreements, giving share - holders enhanced control over strategic decisions and safeguarding minority interests. 2.3 Decision-Making Processes Board of Directors The board makes decisions collectively, typically at duly convened board meetings in accordance with the company’s articles of association and after giv - ing sufficient notice for a board of directors’ meet - ing to be convened. Decisions are usually taken by a simple majority of directors present, provided that quorum requirements are met. In practice, resolutions may also be passed in writing (circular resolutions), if permitted by the articles. Directors must exercise independent judgement and comply with their duties when participating in decision-making. Shareholders Shareholders make decisions through general meet - ings (annual or extraordinary), where resolutions are passed by voting. The type of resolution required depends on the matter: ordinary resolutions (sim - ple majority) are used for routine decisions such as appointing directors, while special resolutions (typi - cally at least 75% majority) are required for more sig - nificant matters, such as amending the company’s articles or approving major structural changes. Share - holder decisions may also be taken through written resolutions, if allowed by the articles, particularly in private companies. 3. Directors and Officers 3.1 Board Structure As so provided by law, every Cyprus registered com - pany must have:
• at least one director in the case of a private com - pany; or • at least two directors for a public company. All directors and the company secretary must be at least 18 years old. It is important to note that a single director in a private company cannot also serve as company secretary, except in the case of a single-member private compa - ny, where one person may hold both roles. The com - pany secretary is appointed by the board of directors, which also sets the terms of appointment, including duration and remuneration. 3.2 Board Members The law in Cyprus does not provide for specific roles between the different members of the board of direc - tors, nor there is a single uniform standard governing the conduct of a company’s directors. This matter can therefore be regulated under the articles of associa - tion, which occasionally set responsibilities and the degree of each director’s involvement with the com - pany’s affairs. The directors owe fiduciary duties to the company both collectively, as members of the board, and indi - vidually in their capacity as directors. 3.3 Board Composition The composition of the board of directors in terms of number is set by law, so that every Cyprus company must have at least one director in the case of a pri - vate company or at least two directors for a public company. The board should act collectively in exercising its powers. The law does not provide for a specific super - visory board. However, the board at its own discre - tion may form committees, and specific responsibili - ties can also be vested with specific directors either by board resolution or through a power of attorney granted by the company. It is recommended that the board includes both exec - utive and non-executive directors (taking into account the size of the company and its operational needs) so
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