Mergers and Acquisitions in Cyprus
- Author Michael Chambers
- Published May 20, 2016
- Word count 428
The major legislation that regulates mergers and acquisitions in Cyprus is the Companies Law (Cap. 113). In particular, the sections 198-202 contain provisions about mergers, reconstruction and amalgamation of companies, and exchange of shares between two or more companies. Other important legislations are the Control of Concentration Between Enterprises Law (22(I)/ 1999) and the Safeguarding and Protection of Employees Rights in the Event of the Transfer of Undertakings, Businesses or Parts Thereof (104/(I)/2000). The first one promotes fair competition and the second one safeguards employees’ rights in the event of a transfer of undertakings.
Procedure:
First of all, the companies involved in the merger or acquisition must apply to the Court and then schedule a general meeting of the shareholders of both companies. During the meeting, it is determined if it is required to arrange the liabilities between the shareholders and the creditors. It should be pointed out that the company being merged shall be wound up without going into liquidation and its assets must be transferred to the acquiring company.
According to the provisions of section 198, the merger or acquisition proceeds under the condition that the three-quarters of company's management approve the transaction. Then a scheme is drafted and it is presented to the auditors. Once the scheme is approved, the companies may file the last petition for approval with the Court. Note that the petition should be accompanied by a sworn statement of one director in each company. Afterwards, a copy of the agreement must be submitted to the Registrar of Companies. Finally, the board of directors of each company will draft a resolution that will determine the reorganisation plan and each company will be obliged to follow this particular plan.
It should be pointed out that regarding public companies, the merger procedure will be the same except for minor changes in the merger plan which must contain:
• the name;
• the form of the registered office of the companies;
• details about the transfer of shares and the amount of money;
• information about the allocation of shares;
• the exact date when the new shareholders will have the right to profits;
Advantages:
From a tax point of view, the primary benefit of mergers and acquisitions is that profits derived by the dividends are exempt from the corporate tax. Moreover, mergers and acquisitions are not subject to VAT in Cyprus. Another considerable advantage is that profits generated from the transfer of immovable properties during the merger or acquisition are exempt from the capital gain taxation. In addition, regarding the transfer of immovable properties is not required to pay the transfer fee.
Michael Chambers and Co. LLC is a full service Cyprus law firm offering a wide spectrum of expertise in an impressive variety of legal disciplines. Our philosophy is simple: you give us the facts and we will give you the law, based upon which we will undertake your instructions in an efficient and cost-effective manner. For more information: www.cypruslawfirm.com
Article source: https://articlebiz.comRate article
Article comments
There are no posted comments.
Related articles
- Are You Unknowingly Signing Away Your Mechanic Lien Rights?
- The Role of Diplomacy in Unrecognized States: A Case Study of Somaliland
- Ontario’s New Homeowner Protection Act
- Why Nanda & Associates Lawyers Are the Top Choice in Brampton
- Essential Contracts Every Freelancer Should Have
- What to Do When Your Ex Violates a Custody Agreement
- How Houston Personal Injury Lawyers Handle Insurance Companies
- How to Prepare for Your First Meeting with a Personal Injury Lawyer in Orlando
- Best Books for Defense lawyer for Felony Robbery
- Establishing a Company in Serbia: A Guide to Business Ownership Types
- How To Get Compensation for a Work Injury
- Navigating Compliance for Personal and Professional Contributions
- Unraveling the Mysteries of Intellectual Property Law: A Comprehensive Guide
- Boston Car Accident Attorneys and Insurance Companies: A Complex Relationship
- How a Los Angeles Car Accident Attorney Can Help You
- Slip and Fall in Chula Vista: Who is Accountable?
- Can I Get Compensated After a Truck Accident in Los Angeles
- Local Tax Attorney vs Competitors: A Comparative Analysis of Legal Services in Orlando
- J. David Tax Law: Your Top Tax Levy Lawyer in North Carolina
- Who Can Garnish Tax Refunds: Your Questions Answered
- Unlock the Secrets to Handling a North Carolina Notice of Deficiency
- The Importance of Financial Services: Enabling Debt Management and Legal Debt Settlement
- Justin C Freeman
- What are the Eligibility Criteria for a Spouse Visa? How to find right Spouse Visa Attorney in Houston?
- Importance, Benefits, and Tips for Hiring a Houston Immigration Attorney
- Importance and Tips of Hiring a Houston Immigration Attorney
- The Importance of Protecting Whistleblowers
- WHY CLASS ACTIONS ARE SO IMPORTANT TO SOCIETY
- THE CONSTRUCTION INDUSTRY AND ALTERNATIVE DISPUTE RESOLUTION (ADR) MECHANISMS
- Lawyer Connections - Finding a Criminal Defense Lawyer