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Restoration of Companies in Cyprus: Legal Procedures Under Companies Law, Cap. 113

In Cyprus, companies may be removed from the Official Register maintained by the Department of Registrar of Companies and Intellectual Property (DRCIP) for a variety of reasons. This removal, commonly referred to as a strike-off, can result from voluntary liquidation, extended periods of inactivity, or non-compliance with statutory obligations under The Companies Law, Cap. 113.

Fortunately, the law offers two clear avenues for restoring a company to active status, effectively treating it as if it had never been struck off. This article outlines the two primary pathways to company restoration in Cyprus:

• Administrative Restoration by the Registrar
• Restoration by Court Order

Administrative Restoration: Reinstatement by the Registrar of Companies

Administrative restoration is typically applicable when a company has been struck off by the Registrar of Companies due to a failure to meet statutory obligations under The Companies Law, Cap. 113. Common grounds for such removal, often pursuant to procedures initiated by the Registrar under Section 327 of Cap. 113, include the non-submission of annual returns with accompanying financial statements or the non-payment of annual government fees. It may also occur if the Registrar has reasonable grounds to believe the company is no longer operational.
Key Requirements for Administrative Restoration:
To initiate an administrative restoration, a formal application on Form HE64 must be submitted to the Registrar of Companies. This procedure is available only if the application is submitted within 24 months from the date the company was struck off, as stipulated by Section 327A(1)(α) of Cap. 113. For the restoration to be approved, the company must rectify all outstanding non-compliances that led to its removal.

The application must be accompanied by:

• All previously unfiled forms, reports, financial statements, and any other pending documentation required by Cap. 113.
• All due fees, charges, and/or fines that were outstanding prior to the company’s strike-off date, payable to the Registrar of Companies.
• Crucially, if the Republic of Cyprus has assumed control over any of the company’s property or rights (known as bona vacantia), written consent from a competent governmental representative for the company’s restoration is required.

Restoration by Court Order: Judicial Intervention for Reinstatement

When a company has been struck off from the Companies Register, whether voluntarily or involuntarily, beyond the 24-month administrative restoration window, or under circumstances not covered by the administrative procedure, reinstatement can be sought through a Court Order. This involves a successful application to the Cypriot District Court, typically under Section 327(5) of The Companies Law, Cap. 113.

Who Can Apply and When:

An application for restoration by court order can be made by any interested party, which may include a company director, a shareholder, a creditor, or any individual who suffered loss or damage as a direct consequence of the company’s strike-off. A significant advantage of this method, as provided by Cap. 113, is the extended timeframe for application: it must be submitted within 20 years from the date the company was struck off and the notice published in the Official Gazette.

Court Proceedings and Outcome:

If the court is satisfied that it is just and equitable to restore the company, or that the company was carrying on business or in operation at the time it was struck off, it will issue an order directing its reinstatement to the Companies Register. The court may also impose conditions, such as requiring the company to submit all pending documents for updating the register and/or pay overdue fees to the Registrar of Companies.

Upon obtaining the court order, an official certified copy, along with a fee of €160 (plus an additional €20 for an accelerated procedure), must be submitted to the Registrar of Companies for registration. Provided that the Registrar is satisfied that all relevant legal requirements have been met and the court’s directions complied with, the company’s status will be updated in the Companies Register, and the restoration will be officially published in the Official Gazette, in accordance with The Companies Law.

The Legal Effect of Restoration

It is vital to understand that the restoration of a company, whether administrative by the Registrar of Companies or by court order under Cap. 113, does not create a new legal entity. Instead, the company is legally deemed to have been in continuous existence as if its name had never been removed from the Companies Register. This retrospective effect, specifically outlined in The Companies Law, is crucial for validating any actions taken by or against the company during the period it was struck off and for ensuring continuity of its legal personality.

For further information on this topic please contact AMG MYLONAS & ASSOCIATES LLC by telephone +357 25101080 or via email info@mylonas.law.

The information provided by Mylonas Law is for general informational purposes only. It does not constitute or should not be read as a legal or tax advice. You should not act or refrain from acting based on any information provided above without obtaining legal or other professional advice. No responsibility can be accepted by the authors or the publishers for any loss occasioned by acting or refraining from acting on the basis of this publication.