A Company may be created in Cyprus as a legal entity by being registered under the provisions of the Companies Law, CAP 113. The Companies Laws (as well as Cyprus Law generally and particularly in the field of commercial and private transactions) is based on English Law. It reproduces almost verbatim the Companies Act 1948 of the United Kingdom.
The following types of Companies are recognised by the Law:
Company with limited liability by shares
Company limited by guarantee, with or without shares
The basic characteristic of a limited liability Company is that the members’ (shareholders’) liability is limited to the nominal value of the shares subscribed by them.
In the case of a Company by guarantee, members’ liability is limited, on winding up, to the extent agreed upon.
This type of Company is usually adopted when its purpose is non-profit making.
Companies with limited liability by shares may be private or public.
A private company is one whose articles, restrict the right of transfer of shares, limit the number of its members to 50 and prohibit any invitation to the public to subscribe for any shares or debentures of the Company, whereas in the case of a public company these restrictions/limitations do not apply.
The type of company that is adopted almost exclusively by foreign investors who are interested in creating a Cyprus registered company is the private Company limited by shares.
