A Company Limited by guarantee is a form of companies provided for under Cyprus Companies Law (Cap. 113), although normally used only for charitable or non-profit making purposes under section 20 of Cyprus Companies Law (Cap. 113). This is similar to other companies provided for under the law, with the main differences relating to their share structure, which is regulated by the
A Company Limited by guarantee is a form of companies provided for under Cyprus Companies Law (Cap. 113), although normally used only for charitable or non-profit making purposes under section 20 of Cyprus Companies Law (Cap. 113). This is similar to other companies provided for under the law, with the main differences relating to their share structure, which is regulated by the memorandum of association, and the liability of its members, which is limited to such amount as the members agree; may respectively undertake to contribute to the assets of the company, in the case of it being wound up. A company limited by guarantee has members rather than shareholders.
Section 20 provides the following:
“(1) Where it is proved to the satisfaction of the Council of Ministers that an association about to be formed as a company is to be formed for promoting commerce, art, science, religion, charity or any other useful object, and intends to apply its profits, if any, or other income in promoting its objects and to prohibit the payment of any dividend to its members, the Council of Ministers may by licence direct that the association may be registered as a company with limited liability, without the addition of the word “limited” to its name and the association may be registered accordingly and shall, on registration, enjoy all the privileges and be subject to all the obligations of limited companies.”
Moreover under section 20 (5) “a licence under this section may at any time be revoked by the Council of Ministers, and upon revocation the registrar shall enter the word “limited” at the end of the name upon the register of the body to which it was granted, and the body shall cease to enjoy the exemptions and privileges or as the case may be.” In this case, the Council of Ministers shall give to the body notice in writing of his intention and shall afford it an opportunity of being heard in opposition to the revocation.
In the light of the above, it should be noted, the companies limited by guarantee can be registered within the records of the Registrar of Companies without the word “limited”, providing the relevant licence is granted by the Council of Ministers. Also it is noteworthy that such companies should prohibit the payment of any dividend to its members.
Moreover, as is the case with companies limited by shares, the companies limited by guarantee have annual requirements, including amongst others:
- Submission of Annual Returns to the Registrar of Companies;
- Preparation and submission of audited accounts to the Registrar of Companies in Cyprus on the 31st of December following the tax year audited together with the submission of form HE32 (annual returns);
- Payment of the Annual Government Levy, currently at the amount of €350;
- Preparation of annual income tax returns based on audited accounts to be submitted along with any other tax related documents, to the Inland Revenue Department.
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