Section 327 of the Companies Law empowers the Registrar of Companies to strike off a defunct company from the companies register. The statutory strike-off procedure depicted below may be initiated by the Registrar of Companies when there are reasonable grounds to suggest that a company is not carrying on any business or operations. Persistent failure to adhere to statutory filing obligations, such as the filing of annual returns or the payment of the annual maintenance levy, may constitute reasonable grounds.
A company may voluntarily choose to be removed from the companies register, provided that at the date of filing of the voluntary strike-off request there are no pending liabilities and all statutory obligations have been settled. A voluntary strike-off may be initiated by the existing company directors where: (a) the company is no longer needed or is dormant; (b) the company directors wish to retire and there is no prospect of replacements being appointed; (c) the pursuit of the objects contained in the memorandum of association for which the company was formed have been abandoned; and (d) any other reason.
The termination of all company functions, including the operation of company websites and bank accounts, should be attended to by the company directors before the strike-off procedure is initiated. The effective date of the strike-off will be the date of the publication of the strike-off notice in the government Gazette.
Any remaining assets and rights of the dissolved company will pass to the Republic of Cyprus on the effective date. The effective date will appear on the certificate of strike-off issued by the Registrar of Companies upon completion of the process.
A strike-off is not an alternative to formal insolvency proceedings. A company that has been struck off may be restored to the companies register at any time before the expiry of 20 years from the publication of the strike-off notice in the Gazette. Restoration to the companies register requires a court order. Any company, member or creditor that feels aggrieved by the company having been struck off the register may apply to the court for the company to be restored. The application is served to the Registrar of Companies.
The court will order the restoration to the companies register, provided that it is satisfied that: (a) the company was at the time of the strike-off carrying on business, or in operation; and (b) that it is otherwise just for the company to be restored to the companies register. Upon an office copy of the court order being filed to the Registrar of Companies for registration, the company will be deemed to have continued in existence as if it had never been struck off and dissolved. The effect of the restoration court order is retroactive.
The court may by the order give such directions and make such provisions as may seem just. These may include, inter alia: (a) placing the company and all other persons in the same position as if the company had not been struck off; (b) dealing with any business, property, filing of returns and late filing penalties of the company; (c) restoring the company with another name where the former company name is the same or similar to another name in the index of company names; and (d) any other just and equitable order.
Nick Tsilimidos is an advocate at L Papaphilippou & Co in Cyprus