Amendments of Cyprus Company Law
The Cyprus Legislative has introduced certain amendments in the Cyprus Companies Law (Cap.113) in an undertaking to modernize the Cyprus corporate practice. The new amendments will enhance corporate and business efficiency.
The new amendments include the following:
The definition of the common seal of a Company was amended as to also include a rubber stamp.
There is no need to affix the Company’s common seal on a written agreement or any other document (i.e. an agreement which is required by law to be in writing). Such written agreement may be executed by any person having the implied or express authority of the Cyprus Company.
Whereas a document is executed by a representative of a Cyprus Company, either in Cyprus or abroad, having the implied or express authority of the Company, shall be valid as if the common seal of the Company was affixed on the document.
Prohibition of Financial Assistance
Private Cypriot Companies can now subsequent to the amendment of Section 53 of the law provide financial assistance for the acquisition of their own shares provided that at least 90% of the shareholders of the company consent to this either before or subsequent to such a transaction and as long as the private company is not a subsidiary of a public company. This does not affect public companies or obligations that may arise out of other sections of the law but generally this may well make acquisitions of existing companies somewhat easier.
Redeemable Preference Shares
The Company may issue redeemable preference shares on terms that allow the redemption of shares either at the option of the Company or a member of the Company.
A pledge over a Cyprus Company shares or other securities are listed and traded in a foreign market, is no longer required to be registered in the Registrar of Cyprus Companies.
Conversion of Classes of Shares
The Registrar of Companies must be notified within a month of any shares being converted from one class to another whether by resolution or automatically in accordance with the terms of issue in respect of the said shares.