Forms of Cypriot business entities.
There are primarily 7 forms of business vehicles that are used in Cyprus.
- Cyprus Company,
- International trust,
- international collective investment scheme,
- Cypriot investment firm
- European company.
Cyprus Company Law: Origins
The Cyprus legal system is based on the Anglo-Saxon model of law. Cypriot companies are regulated by the Cyprus Companies Law, Cap. 113. This law was introduced in 1951 and it is actually a copy of the English Companies act of 1948. The law has been revised several times after Cyprus’s succession in the European Union, and it is now fully compatible with all the European company law directives.
The key features of a Cyprus company are the following:
The ownership of the company, in other words the shares may be belong to natural or legal persons.
The company once incorporated has separate legal personality. In other words in law it is considered as a separate legal entity.
A company is also regulated by law. This means that the organization, the structure, the powers and duties of the officers of the company and the powers duties and obligations of the company itself are regulated by statute.
The Organs of a Cyprus Company
A Cyprus company is in essence governed by two organs:
- The Board of Directors and
- The General Meeting.
Reference must also made to the company secretary who is the administrative officer of the company having administrative functions.
The Board of Directors is the executive body of the company. It is composed by the directors who are considered as the agents of the company. They are the voice and the eyes of the company and they represent it in all outside transactions.
They are also the mind of the company in the sense that they think, decide and express the will of the company.
Another important aspect of the office of the director is that directors are also trustees of the company’s property. This is a special legal relationship which means that the directors have to display due dilligence and exercise care and skill when they carry out their functions as directors.
The General Meeting ,on the other hand, is the forum or the organ where the owners of the shares of the company express their voice and take their decisions.
The general meeting has powers that are included in the Companies Law and in a company’s constitutional documents : the Memorandum and Articles of Association.
Many times the question is asked as to which of the two bodies: the Board of Directors or the General Meeting has the final word in deciding the affairs of the company.
The answer is that the shareholders through the General Meeting, have the final word in a company because they control the appointment and removal of directors.