- Focus services
- Corporate services
- Financial services
- Legal and Сonsultancy
Under section 64 of the Companies Law, Cap 113 as amended (the “Law”), a company limited by shares or guarantee and having a share capital, may, if so authorized by its articles of association, reduce its share capital and may:
The Company must carry out the following procedure in order to reduce its share capital:
The reduction of the share capital will have no effect unless and until step (3) above takes place and the necessary filing is made to the Cyprus Registrar of Companies (s.67 (2) of the Law).
The application is made to the district court where the company has its registered office and involves two applications.
The first application deals with the protection of creditors and specifically the discretion of the court to order a creditors list to be drawn up and/or the publication in the official gazette giving notice to any creditor or interested party of the hearing date of the court application enabling any such person to file an objection to the same.
The main application deals with the approval of both the actual reduction of the share capital and the special resolution authorizing the same.
Each application is supported by an affidavit sworn at court by one of the directors of the Company.
Where the company has issued shares at a premium the provisions of the Law which relate to the reduction of share capital (set out above) apply to the reduction of share premium account. The reduction of the share capital as such and share premium account may be dealt with within the same resolution and court applications and therefore resulting court order.
The procedure may take anything between two to three weeks.
Benefits of Reduction of The Share Capital
The author of the article is Leonora Chagianni.
Leonora is the Head of Legal and Corporate Department in the company. She achieved an LLB from the Democritus University in Thrace in 2010 and upon completion also got an LLM in International Business and Commercial Law from the University of Manchester. As from 2012 Leonora is admitted to the Cyprus Bar Association.
Posted on Dec 30, 2016
Thank you for getting in touch!
We will look over your message and get back to you within 24 hours.