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A Cyprus company may be dissolved or cease to have legal substance in different ways. The most common methods to voluntarily dissolve a company whose business life cycle has ended and has no activities, are mainly two. The Strike-off Method and the Members’ Voluntary Liquidation.
This procedure is a relatively simple and is mainly used for dormant companies that have either ceased their activities or never had any activity. In order to Strike-off a company, it should no longer have any assets or liabilities and therefore any remaining assets should be distributed to the shareholder company or individual. Likewise, any liability must be settled or waived before Strike-off may proceed.
Preparing the company for Strike-off/ Steps and Conditions:
To initiate the Strike-off procedure, the directors of the company sign a declaration stating that the company:
The declaration is then filed with the Registrar of Companies together with a letter signed by a Director requesting that the company is removed from the Registry.
The Registrar of Companies will then publish in the Official Gazette of the Republic of Cyprus a notice for striking off the company from the Companies’ Register. The company is stricken off the register after 3-4 months.
Compared to the Member’s Voluntary Liquidation procedure, the Strike-off is easier, faster and cost effective.
What to have in mind with Strike-off
The company may be restored by an interested party within twenty years of its strike-off.
Members’ Voluntary Liquidation
This is the procedure whereby the Members or Members of a solvent company that ceased its activities, decide to dissolve the company. It is required that the directors of the company make a declaration of solvency, stating that that the company will be able to pay its debts in full within 12 months from the commencement of the dissolution procedure. A statement of assets and liabilities need to be attached to the declaration of solvency. The appointment of a liquidator is also required for this procedure. .
Preparing the company for Members’ Voluntary Liquidation/ Steps and Conditions.
The steps towards the member’s voluntary liquidation are:
Why Members’ Voluntary Liquidation
The company is permanently dissolved two years after the issue of the certificate of dissolution.
What to have in mind with Members’ Voluntary Liquidation
It takes approximately one year for the liquidation procedure to be completed.
The author of the article is Joanna Georgiou.
Joanna is a professional with a solid expirience over 10 years in corporate field. She is an efficient and organized member of the team with an extensive experience in corporate services.
1. Licenced Insolvency Practitioner as per Cyprus legislation
Posted on May 05, 2016
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