The following categories of companies are recognized by the Cyprus law:
- Company Limited by shares: The relevant legislation governing the aforementioned legal forms is the Cyprus Companies Law, Cap.113. Most of the IBCs are limited companies and only a small percentage is in the form of branches or partnerships, mainly because their legal status and financial liabilities are limited to the nominal value of the shares owned by the shareholders. In the case that the shares are fully paid then there is no further obligations towards the shareholders.
- A company limited by guarantee: This is an alternative type of incorporating a company used mainly for non-profit organizations that require corporate status. It does not have a share capital and instead of shareholders it has members acting as guarantors. They are liable to give an undertaking to contribute a nominal amount towards the winding-up of the company in case the company winds up. Profits are not distributed to its members and may apply for charitable status if necessary. This type of entity is commonly used for clubs, membership organizations, sports associations and charities.
There are two types of companies limited by shares – Public or Private companies:
Any company whose Articles do not contain the restrictions applicable to private companies is a public company. A public company (plc), according to the Company Law may obtain a listing on the Cyprus Stock Exchange and can offer for sale its shares to the public through a prospectus offering any of its securities for sale to the public. A public company limited by shares has the following requirements:
- Non-residents may be company subscribers;
- It must have a minimum of seven shareholders and there is no maximum;
- Its shares may be offered to the public and are freely transferable;
- There is no liability upon payment of the shares held;
- Corporate entities or physical persons may be appointed as secretaries.
- A minimum of two directors is required and there is no maximum;
- A company secretary is obligatory;
- The company is required to have a registered office in Cyprus;
A private company (ltd) is a company which by its articles restricts the right to transfer its shares, prohibits any public subscription to shares or debentures and limits the number of its members to fifty.