CYPRUS Law and Practice Contributed by: Kyriacos Scordis, Sofia Tryfonos Avraam and Anna Borovska, Scordis, Papapetrou & Co LLC
Law contains provisions on requirements of listed transferable securities including requiring every company to disclose its annual financial report and annual financial statements and make these available to the public for a period of at least five years. 7.4 Transaction Documents There are no particular requirements or obliga - tions to disclose transaction documents in part or in full in respect of private companies, where - as, in M&As involving a public offer in listed com - panies, the following documents are disclosed to the holders of securities: • the press announcement confirming the bid - der’s intention to make a public offer; • declaring the intention to make a public offer and summarising the terms of the bid; • the preconditions attached and the consid - eration proposed; • the public offer document, the report of the board of the target with an independent expert’s report, which is sent to the holders of securities; • an acceptance and transfer in the prescribed form; and • a confirmation of funds (bank guarantee) where there is cash consideration.
With regards to the latter, the Companies Law contains a duty for a director to disclose an interest in a contract or proposed contract, at a meeting for the board of directors, as well as for the company to lay before the shareholders in general meeting the amounts of any loans made to the officers of the company (including direc - tors) by the company, or a subsidiary, or by any other person under a guarantee. Duties are owed towards the company and the shareholders and as such the company as an entity under the “proper plaintiff rule” and, in limited situations, the shareholders on their own behalf may take action against a director for fail - ing to fulfil or breaching their fiduciary duties. Cases where a person having an indirect interest in the company (ie, not a shareholder) claims to suffer a loss due to the actions of a director are not common. With respect to public companies, there are certain corporate governance obligations that need to be complied with as part of the Stock Exchange Law and the Code. These include the exercise of independent and unbiased judge - ment in the exercise of their duties, dedicating the time and attention which is needed to carry out their duties towards the company in due per - formance, while non-executive directors need to be sufficiently independent with respect to busi - ness, personal or family ties; further, the board is subject to accountability in the preparation of financial statements and reports and is bound to treat shareholders equally. 8.2 Special or Ad Hoc Committees It is common for the articles of association of a company to provide that the directors may del - egate any of their powers to committees, which shall be comprised of members of the board of directors, to act under such mandate as shall be
8. Duties of Directors 8.1 Principal Directors’ Duties
Directors are deemed to be company represent - atives, and as such they have a fiduciary duty towards the company to act in good faith and to make decisions in the best interests of the com - pany. In exercising their powers, directors need to act with reasonable care, skill and diligence and avoid conflicts of interest.
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