LIQUIDATION OF COMPANIES BY COURT ORDER (WINDING UP ORDERS) - CYPRUS COMPANIES LAW (CAP.113)

Under Article 211 of the Cyprus Company Law (CAP. 113), a company may be liquidated by the Court in the following cases:

1. the company has decided by special resolution for its liquidation by the Court;
   
   
2. the company failed to submit the statutory report to the Registrar of Companies or to convene the statutory meetings;
   
   
3. the company does not commence its business within a year from its incorporation or suspends its business for a whole year;
   
   
4. the company is unable to pay its debts;
   
   
5. the Court is of the opinion that it is fair and in accordance with the law of leniency to dissolve the company.

Where an applicant seeks liquidation on the basis of the Company's inability to pay its debts, then Article 212 of the Cyprus Company Act (CAP. 113) provides for a non-exhaustive list of circumstances which a Company will be deemed incapable of paying debts:

1. if a creditor, by assignment or otherwise, to whom the company owes an amount in excess of five thousand euros (€ 5,000), delivers to the registered office of the company a claim which requires the company to pay the amount due in this way, but the company for the next three weeks (21 days)
   neglected to pay the amount or to secure or settle it to the satisfaction of the creditor; or
   
   
2. if enforcement or other proceedings taken by a court decision, order or decree of any Court in favour of the company's creditor are returned in whole or in part unsatisfied; or
   
   
3. if it is established, to the satisfaction of the Court, that the company is incapable of paying its debts at the time they become payable, taking into account also the potential and future liabilities of the company; or
   
   
4. if it is proved, to the satisfaction of the Court, that the value of the company's assets is less than the amount of its liabilities, taking into account its contingent and future liabilities.

For more details or advice regarding court proceedings to issue winding up orders contact Phoebus, Christos Clerides & Associates LLC at  info@clerideslegal.com or  con.clerides@clerideslegal.com