CYPRUS Law and Practice Contributed by: Kyriacos Scordis, Sofia Tryfonos Avraam and Anna Borovska, Scordis, Papapetrou & Co LLC
as specific 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 commercial due diligence are areas exam - ined by the bidder’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 Registrar with regards to the incorporation, the company’s name and share capital and a confirmation of “no winding up” ; • collection and review of any existing mortgag - es/encumbrances/floating charges or other obligations as registered with the Registrar of Companies and/or relating to assets owned by the company; • review of annual returns and board resolu- tions; • the organisation chart of the group, share - holding agreements, intra-group and financial agreements, etc; • verification of payment of the annual levy, along with a confirmation of any current lawsuits or pending litigation and/or disputes which the company is involved with; and • depending on the type of company, key commercial agreements (including service/ employment agreements and related).
As stated, subject to the specific business of the company, due diligence may be exercised in relation to any regulated activities of that compa - ny 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 operations generally come under a stricter scru - tiny both from a sanctions perspective but also from an Anti-Money Laundering (AML), and Envi - ronmental, Social and Governance (ESG) per - spective. As a result, this increases the robust - ness of corporate and commercial due diligence processes, which is more likely to result in time - line extensions. 5.4 Standstills or Exclusivity Cyprus shadows the United Kingdom’s legal system and international market practices. Gen - erally, parties 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 takeo - ver 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
548 CHAMBERS.COM
Powered by FlippingBook