There are two ways to close down a Cyprus Company. The liquidation process and the strike-off process.
Both ways require the same level of preparatory work as explained below with the exemption that once the liquidation process is completed the company can never be reinstated by the Cyprus Registrar of Companies which is not the case with the strike-off process where a Cyprus company can be reinstated via a court offer.
Procedure for Strike-off Process
a) Company must prepare audited financial statements up to the year preceding the strike off
b) Company must file its tax returns (IR4 for all companies and IR7 if it is an employer and any other filings requirements that may apply at the time)
c) Company must file its annual returns to the Cyprus Registrar of Companies
d) Once all of the above takes place, the service provider (usually the auditor) writes to the Income Tax Office requesting a tax clearance and to the Registrar of Companies requesting the company to be removed from the register of Cyprus companies.
Procedure for Liquidation
All of the above with the exemption of point d as the auditor will request a Tax Clearance for the Company and the Lawyer will make all necessary procedures and attend local court to request for the liquidation of the Company.
Documents / Actions Required
a) All accounting records, bank statements, invoices, agreements, etc so that the accountants and auditors will bring the company up to date with accounting, audit, and filing requirements.
b) Register the company with Taxisnet and the Registrar of Companies to make all necessary filings that apply at the time.
So what's best for me, the shareholder/director
It is really simple. It is a matter of exposure and closure cost!
The Strike-Off Option
If your company was small and never had any issues with third-party creditors, the VAT, or the Income Tax Office and has never entered into any agreements that could at some point backfire and result in a lawsuit, then the Strike Off Option is more suitable as it will be cheaper and easier.
The Liquidation Option
On the other hand, if your company was a fully-fledged company with several agreements and sufficient vat exposure as well as substantial 3rd party creditors then the liquidation option will offer you a piece of mind as once the company has been liquidated everything surrounding it ceases to exist.
Fee Difference between the Two
The legal fees
The liquidation option is more expensive than the strike-off option but Faster, as a lawyer is also involved and needs to attend several court proceedings on top of the work of the auditors and this is the extra cost (+ some disbursements) of the two approaches.
About Us
CYAUSE Audit Services has extensive experience in the insurance industry has helped tens of insurance brokers and agents register and get licensed by the local Cyprus regulator granting them passporting access to the rest of the European Union.
CYAUSE Audit Services is an Audit & Assurance firm with offices in Cyprus and the UAE. During 2015 we have been awarded by I.C.P.A.C and the A.C.C.A (local and international association of Chartered Certified Accountants) for the Quality of our Audit Services and our Office's Procedures.
Being a Truly International Audit & Assurance firm, we have associates from all over the world and we are constantly looking for new associates to expand our network further. At present, CYAUSE Audit Services operates internationally through its membership with BKR International amongst the largest American associations in the world, Accace Circle, a co-created business community of like-minded BPO providers and advisors who deliver outstanding services with elevated customer experience. Our network covers almost 40 jurisdictions with over 2,000 professionals, it supports more than 10,000 customers, mostly mid-size and international Fortune 500 companies from various sectors, and processes at least 170,000 payslips globally.
CYAUSE Audit Services Ltd is also a member of BKR International one of the biggest US Accounting Associations of the word and the 3E Accounting Network, an international accounting network which originates from Hong Kong and has more than 80 members from all over the world.
Learn More about Cyprus Corporate Environment
Information about CYAUSE Audit Services and the Cyprus Corporate & Tax System can be obtained from our Website or our YouTube channel which provides valuable information about the Corporate & Tax Environment of Cyprus.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
