CYPRUS Law and Practice Contributed by: Kyriacos Scordis, Anna Borovska and Constantinos Kazamias, Scordis, Papapetrou & Co LLC
time requirements when specified in the law must be strictly adhered to. 5.3 Scope of Due Diligence Besides the legal due diligence which is carried out by the bidder’s/buyer’s lawyers, tax, financial and com - mercial due diligence are areas examined by the bid - der’s/buyer’s financial advisers and accountants. The scope of the legal due diligence usually includes: • the corporate documents of the company such as its memorandum and articles of association, the corporate registers of the company (which provide information of the company’s members, directors, secretaries, registered offices), and any relevant transfers and charges; • receipt of the latest certificates issued by the Reg - istrar with regards to the incorporation, the com - pany’s name and share capital and a confirmation of “no winding up”; • collection and review of any existing mortgages/ encumbrances/floating charges or other obliga - tions as registered with the Registrar of Companies and/or relating to assets owned by the company; • review of annual returns and board resolutions; • the organisation chart of the group, shareholding agreements, intra-group and financial agreements, etc; • verification of payment of the annual levy, along with a confirmation of any current lawsuits or pend - ing litigation and/or disputes which the company is involved with; and • depending on the type of company, key commer - cial agreements (including service/employment agreements and related). As stated, subject to the specific business of the com - pany, due diligence may be exercised in relation to any regulated activities of that company as well as in relation to any industry-specific agreement and/or commercial arrangement that may be in place. Due to the continuing war in Ukraine, business opera - tions generally come under a stricter scrutiny both from a sanctions perspective but also from an Anti- Money Laundering (AML), and Environmental, Social and Governance (ESG) perspective. As a result, this
increases the robustness of corporate and commer - cial due diligence processes, which is more likely to result in timeline extensions. 5.4 Standstills or Exclusivity Cyprus shadows the United Kingdom’s legal system and international market practices. Generally, par - ties are free to negotiate between them and decide what documents and agreements are necessary and appropriate to safeguard each party’s interests. In this respect, it is not uncommon to see parties entering into standstill, exclusivity or lock-out agreements. 5.5 Definitive Agreements The terms and conditions of any public takeover will be stated in a bidder’s offer document, which must contain prescribed information as specified by the CySEC 2012 Directive. Such an offer document is subject to the approval of CySEC. After the approval of the offer document by CySEC is announced, the parties to the bid may announce material changes to previously announced or published information. In the case of private companies, offers take a much less formal format and depend on whether a detailed due diligence is required before the transaction can take shape or not. It is a matter of commercial sense with respect to the particular transaction as to whether to enter into a binding or non-binding MOU or defini - tive agreement at the stage of making an offer. 6. Structuring 6.1 Length of Process for Acquisition/Sale The acquisition process can vary from transaction to transaction, depending on the complexity of the deal and the businesses involved. There is no specific timetable nor any time restrictions, especially when it involves private companies. Public companies’ acquisitions, however, are given a time-guideline concerning the period of acquiring or selling a company, deriving from the Takeover Bids Law 2007. Public companies that have been pre - sented with a public takeover offer generally require at least four to six months, subject to such an offer
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