The Cyprus Companies Law (Cap. 113) does not determine a minimum share capital for private companies limited by shares.
The company upon incorporation will specify its authorized share capital and the issued share capital. The authorized share capital of a company refers to the maximum amount of share capital that a company is authorized to issue to its shareholders. It is stated in the company’s Memorandum of Association and represents the nominal value of the shares that the company is permitted to issue.
The founders or initial shareholders of the company decide the amount of authorized share capital they wish to allocate. This amount can be specified in any currency, but it is commonly denominated in euros.
A Cyprus company can:
Provided that the Articles of Association authorise a reduction of share capital, the shareholders pass a special resolution in order to reduce the share capital.
It is to be noted that this resolution is subject to the Court’s approval. Therefore an application must be submitted to the Court in order to obtain the required order.
In case of success, a copy of the court order in addition to a copy of the special resolution should be submitted to the Registrar of Companies.
The reduction is effective from the date of registration of the court order with the supporting special resolution by the Registrar of Companies.
Provided that the Articles of Association authorise an increase of share capital, shareholders will be required to pass a resolution (according to the provisions of the Articles of Association.
Please note that in case the Articles of Association do not authorise for a share capital increase, it will have to be amended by a special resolution in order to permit the said increase.
Within 14 days, a certified true extract of the shareholders’ resolution is to be filed with the Registrar of Companies along with the payment of the applicable capital duty, the amount of which depends on the increase.
The increase is effective from the date the said resolution is passed.
This measure aims to ensure that the proposed reduction of share capital is fair and equitable and does not aim to compromise the rights of any shareholders or of any other stakeholders dealing with the company.
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The authorized share capital is divided into shares of a specific nominal value. The nominal value represents the stated value of each share and is mentioned in the company’s Memorandum of Association.
While the authorized share capital represents the maximum limit, the company may choose to issue and allocate a portion of the authorized share capital to shareholders. The issued share capital refers to the shares that have been allotted and issued to shareholders. The paid-up share capital is the portion of the issued share capital that shareholders have paid for.
Companies in Cyprus have the flexibility to amend their authorized share capital. This can be done through a special resolution passed by the shareholders, following the required procedures and filings with the Registrar of Companies.
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