A Cyprus Company may be dissolved using one of two methods.
- The strike-off technique is the simplest and least expensive option.
- A member’s voluntary winding up is the second approach.
Strike-off procedure
This is a streamlined procedure that is typically applied to multinational corporations that have discontinued operations and have no plans to do so in the future.
The company’s financial statements must be created up until the day business operations end. The financial statements must be sent to the Cyprus tax office with the pertinent income tax return, and after the tax, the office reviews and approves these and any tax liabilities Upon resolution of the liability, a tax clearance certificate will be given.
A statement of solvency must be signed by all of the company’s directors(affidavit). This declaration must be solemnized in front of a notary public. The affidavit serves as evidence that the company is no longer operating, does not currently have any assets or liabilities, and has no plans to do so in the future.
The prepared statement of affairs must demonstrate that the company has enough cash on hand to pay all of its obligations, including the costs associated with the strike-off.
The strike-off of the register procedure costs €2,023(i.e.€1,700+19% VAT) and typically takes nine months to complete.
Voluntary liquidation of members
This procedure is more formal and is only performed when the distribution of certain assets necessitates the legal appointment of a liquidator, generally for tax-related reasons.
The liquidator must vouch for the company’s financial stability before moving further with the voluntary liquidation. The directors must file a statutory declaration stating that the company can pay its obligation. Within five weeks of the resolution to dissolve the company’s operations, the declaration of solvency must be delivered to the Registrar of Companies.
Within a year after the start of the company’s winding up, all of the debts must be paid in full. Additionally, a tax clearance certificate will be acquired. A shareholders’ general meeting will be called by the liquidator. The meeting is then given the final accounts. The liquidator will, no later than one week following the meeting, send a copy of the final accounts and the report of the final meeting to the Registrar of Companies. Within three months after the filing date, the Registrar of Companies will issue a Certificate of Dissolution, at which point the company is deemed to be dissolved. A simple members’ voluntary liquidation takes around a year to complete and costs €4.165(or €3.500 plus 19 percent VAT).
Major distinctions
The process, the price, and the timing of the two ways have been covered as the primary differences between them. However, the most significant distinction that must be discussed about the strike-off method is that if a company, or any member or creditor of the company, feels wronged by the company having been struck off the register, the Court on an application made before the expiration of twenty years from the publication in the Gazette of the notice for the strike-off, if satisfied that the company was at the time of the striking off carrying on business, or in operation, may grant the application if the company was at the time when a corporation dissolves by the voluntary liquidation of its members, On a request made for the purpose by the company’s liquidator or by any other person who appears to the court to be interested, the Court may, at any time within two years of the date of dissolution, issue an order, on the terms the Court deems appropriate, declaring the dissolution to have been invalid.
