Answer ... (a) Commercial/corporate
Although it is possible to conduct an electronic search of the records of the target in order to verify the structure of the target and other matters (eg, capital structure, shareholders, board of directors, charges), the records kept by the Registrar of Companies are not always updated. This is due to various reasons, including:
- the processing time required between the filing of any returns with the Registrar of Companies and the update of the registrar’s records; and
- companies’ failure to file the required returns on time.
In addition, for a few months in 2021, the beneficial owners of the shares may not be apparent on the register, since it is currently possible for ‘nominee’ shareholders to appear as the registered owners of the shares. This is about to change, with the practical application of the Fifth EU Anti-Money Laundering Directive in Cyprus, which is about to be implemented.
This is usually conducted through a review of the target’s records, including audited financial statements, financing and security agreements. There is not much information which can be obtained from public sources as regards the financial standing of the target, apart from a certificate of ‘no insolvency proceedings having been commenced’ which is issued by the Registrar of Companies. As indicated in question 3.1(a), however, the records of the registrar on the basis of which such certificate is issued may not always be updated.
It is not possible to conduct a public search in order to ascertain whether there is any pending litigation involving the target.
This is usually conducted through a review of the target’s records. There is not much information which can be obtained from public sources, other than requesting receipts issued by the Tax Department that the target has paid any taxes due up to that moment in time. The review of tax assessments and the issuance of tax clearance certificates by the Tax Department may take considerable time, pending which it is advisable to ensure that sufficient warranties and indemnities are obtained as regards the target’s tax exposure.
If the target employs any personnel who require an employment permit, confirmation should be sought from the target that such personnel hold valid and current employment permits. Likewise, confirmations should be sought that the target is up to date with its contributions to the Social Insurance Fund.
(f) Intellectual property and IT
There are no jurisdiction specific aspects as regards the target’s Intellectual Property and IT that a buyer should consider when conducting due diligence on the target.
(g) Data protection
There are no jurisdiction specific aspects as regards data protection that a buyer should consider when conducting due diligence on the target.
There are no jurisdiction specific aspects as regards cybersecurity that a buyer should consider when conducting due diligence on the target.
(i) Real estate
There are no jurisdiction specific aspects as regards the target’s real estate that a buyer should consider when conducting due diligence on the target.