In this article I will inform you about the modification of Law 144 (I) / 2015, which introduced the limited company by shares. The new legislation came into force in 2015. As a result of this particular legislation, Cyprus is now in line with other EU member states, including the UK, Poland and Luxembourg. Furthermore, the introduction of joint-stock limited partnerships is expected to create new business and investment opportunities and consequently urge entrepreneurs and investors from different EU member states to invest and develop their business plans in the Republic of Cyprus.
In general terms, the company limited by shares is regulated by the Law of Companies and Commercial Names, Cap. 116.
According to Cap. 116 there are the following two types of association:
- The General Partnership, in which each partner is jointly and individually liable with all other partners for an unlimited amount of debts and any other financial obligations of the Partnership. It should be noted that a limited liability company or other partnership can be a partner. Precisely, the partners of a partnership can be merely limited liability companies, or just partnerships or both.
- The Limited Company, in which at least one of the partners must have unlimited liability for the obligations and debts of the Company. The remaining partners may have limited liability. It should be clarified that limited liability companies can be partners in a Limited Partnership, as a partner with unlimited liability.
This article will focus on the provisions of the new regulation and specifically on companies limited by shares.
Before proceeding to the presentation of limited partnerships by shares, I would like to point out that according to article 48, the registration of limited partnership is mandatory. In accordance with the provisions of this particular Law, every limited partnership must be registered based on the provisions of this Law. In the event that a limited partnership is not registered, then it is considered a general partnership. As a result, each limited partner is considered a general partner.
Companies limited by shares:
In accordance with the provisions of article 47, companies limited by shares do not have legal personality, regardless of whether or not they have share capital. On the contrary, according to the law, a limited company has legal personality when it is constituted.
Another important advantage of companies limited by shares is tax transparency, which is why any tax arises at the partner level. The particular amendment has facilitated the adjustment of alternative investment funds to limited liability companies.
- No company, association or partnership composed of more than ten persons shall be formed to operate commercial activities unless it is registered as a Company based on the provisions of the Companies Law, or any amendment thereof or has been incorporated accordingly. with any other Law.
- No company, association or society composed of more than 100 people will be formed in order to carry out any operation that is designed to generate benefits for the company / association / association, or each member of the company / association / association, to Unless it is registered as a Company based on the provisions of the Public Limited Companies Law, or any modification thereof, or it has been incorporated in accordance with any other Law.