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Cyprus Company Members’ voluntary liquidation process

 

Cyprus Company member’s voluntary liquidation process

A Cyprus Company may be wound up voluntarily by its members:

a) When the period fixed for company duration has elapse by its Articles

b) By company’s resolution.

The whole process usually takes 9 -12 months or longer if the company’s assets or liabilities are difficult to be sold or released.

The main stages of a Cyprus Company member’s voluntary liquidation process are:

1) The Cyprus Company ceases its activities unless there is any other reason not to do so. Annual financial statements must be prepared showing that the company is in a position to repay all its creditors and obligations. Waiver of intercompany and/or other debts or assignment of such debts to the Cyprus Company’s shareholders may prove necessary in order to satisfy this condition.

2)  The members then place the company into members’ voluntary liquidation at an extraordinary general meeting at which time the liquidator is appointed.

3) Within fourteen days the liquidator informs the Registrar of Companies of the above extraordinary meeting and that the Cyprus Company has been placed into members’ voluntary liquidation. An announcement of this event is placed in the Cyprus Gazette.

4) The Directors of the Company make a statutory declaration that the Cyprus Company is solvent (Statement of Solvency) and that the Company is able to repay all its debts in full within twelve months from the date of the commencement of liquidation. The declaration is signed in frond of the Registrar and submitted along with the latest financial position of the company.

5) The liquidator begins the process of liquidation and after preparing the realisation account, convokes a General Meeting of members to put the account before them and any undistributed funds left are distributed to them in proportion.

6) The General meeting is convoked by notice in the Cyprus Gazette setting the time, place and purpose and is published at least one month before the General meeting.

7)  Within one week from the date of the General Meeting, the liquidator sends to the Cyprus Registrar of Companies a copy of the account and the report of the General Meeting.

8)  Within three months the Cyprus Company is deleted from the Register of the Cyprus Registrar of Companies.

9) During the liquidation process and before the account preparation, the liquidator must submit to the Income Tax Office the final tax returns for issuance of the final tax clearance certificate.

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The authors expressly disclaim all and any liability and responsibility to any person, entity or corporation who acts or fails to act as a consequence of any reliance upon the whole or any part of the contents of this publication.

Accordingly no person, entity or corporation should act or rely upon any matter or information as contained or implied within this publication without first obtaining advice from an appropriately qualified professional person or firm of advisors, and ensuring that such advice specifically relates to their particular circumstances.

PKF Cyprus firms are member firms of the PKF International Limited network of legally independent firms and do not accept any responsibility or liability for the actions or inactions on the part of any other individual member firm or firms.

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