Entry into force of the Companies (Amendment) (No 4) Law of 2015

The Companies (Amendment) (No 4) Law of 2015, Law 89(I) of 2015, took effect on 19 June 2015. It introduces several changes to the Companies Law, the most important of which are as follows:

· a company may be incorporated as a general commercial company with power to carry on any trade or business and to do all such things as are incidental or conducive to this, rather than having a detailed objects clause in its memorandum of association;

· where security documents are amended to increase the amount secured, the amendment regarding the increase of the secured amount does not affect the priority of the initial charge;

· it sets a time limit of 42 days from the date of creation of the charge for registering a registrable charge created outside Cyprus which includes property situated outside Cyprus, in line with the existing practice of the Registrar of Companies;

· it makes clear that a pledge of share certificates, assignment of rights which are attached to shares of companies or any other charge over share certificates do not constitute a registrable charge;

· it requires foreign companies that transfer their seat to Cyprus with the intention of continuing there to register any registrable charges that existed prior to the registration of the company as a company continuing in the Republic within 42 days from the date of the temporary continuation certificate;

· in the case of a cross border entity, where the surviving entity is an entity which is subject to the Companies Law, then any registrable charges which were registered against the entity which was dissolved due to its merger must be registered anew within 42 days from the date when the cross border merger became effective;

· a board meeting can take place via telephone conference or other similar means, and will be deemed to have been held at the location where the person who was taking the minutes was physically located;

· the articles of a company can stipulate a larger majority for a shareholders’ resolution to be passed than the majority specified in the Companies Law;

· an officer who has vacated office (or his personal representatives) can notify the Registrar of Companies of the change if the company does not do so;

· the Registrar of Companies can strike off a company following an application of the directors or in the event that the company does not pay its annual levy within one year from the due date; and

· certain types of documents and returns submitted to the Registrar of Companies from 1 January 2007 onwards will be stored in electronic form by the Registrar of Companies and made available to the public in that form.

The amending law also introduces numerous internal procedural changes within the Companies Registration Department aimed at streamlining operations. For example:

· the handwritten signature of the Registrar of Companies is no longer required on documents such as certificates of company registration or of the registration of a charge;

· introduction of a seal to certify documents, and the delegation of the Registrar’s signing authority at any time, not just in his or her absence;

· simplification of various forms; and

· facilitating the electronic submission of documents.