Pursuant to a December 2018 amendment to the Companies Law (Cap 113), the provisions on the striking off of Cypriot companies have been amended to introduce a simplified process to reinstate a company which was struck off as a result of failure to file mandatory documents or to pay the annual levy to the registrar.
Before the amendment, it was possible for the company or any shareholder or creditor to reinstate a struck-off company through a court order (old Section 327). The new Section 327A provides that, in addition to the above court procedure, it is now also possible to reinstate a struck-off company through a simplified process involving an application made by any director or shareholder to the registrar (known as an 'executive reinstatement'), provided that the following conditions apply:
- The application is submitted within two years of the date of strike off;
- The company was conducting business at the time of strike off;
- All up-to-date returns, filings and financial statements required to be submitted to the registrar have been prepared and submitted;
- All levies, costs and penalties related to late filings and returns which arose or were incurred before strike-off have been paid or submitted;
- An executive fee for reinstatement of the company has been paid; and
- The registrar has reasonable grounds to believe that the strike-off has placed the applicant (director or shareholder) in a disadvantageous position.
If government departments have dealt with any company assets (ie, any property that was 'stray' at the time of strike-off) the applicant can submit confirmation that the relevant department consents to the reinstatement.
Once the registrar is satisfied that the above conditions have been met, they will issue a certificate of reinstatement of the company in the register. This certificate confirms that the company continues to exist as if it had never been struck off, and the registrar publishes the reinstatement. The date of the certificate of reinstatement is the effective date of reinstatement.
The executive reinstatement does not affect the right of the applicant (a director or shareholder) to apply to court within 12 months of the reinstatement for a court order approving reinstatement and ordering the reinstatement of all officers to the positions they held before strike-off.
The reinstatement of the company in the register does not affect any rights and obligations of the company in connection with any debt or any contract made by the company in the period between the date of strike-off and the date of reinstatement.
The simplified process aims to enable companies that are struck off due to irregularity to be reinstated within two years, without having to resort to the courts. The simplified process is not available to creditors, which must still apply to the court and prove that the company still conducts business or that it is just the company to be reinstated.
For further information on this topic please contact Stella Koukounis at Solsidus Law by telephone (+357 22 007700) or email ([email protected]). The Solsidus Law website can be accessed at www.solsiduslaw.com.
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