Introduction
A private company in Cyprus needs at least one director to operate and a public company needs at least two directors. A sole director cannot be the company secretary at the same time; however, the sole member of the company can also be the sole director and secretary of the company. Directors play a crucial role in the management of a company.
Who can be a Director?
Both natural persons and legal persons (i.e. another company) can be a company's director. In case that the director is another company, then this company is represented by a natural person.
There are no formal requirements as to the qualification for the post of directors. Moreover, in Cyprus a director does not have to be a member of the company. As Article 7 of Table A states, 'The shareholding qualification for directors may be fixed by the company in general meeting, and unless and until so fixed, no qualification shall be required'. However, it is possible that the Articles of Association require the directors to take up a stipulated number of shares a pre-requisite for the appointment to the office of director, through a 'share qualification' clause.
Appointment of Directors and Nominee Directors
The importance of a company's management by its directors is reflected by the fact that when registering a company, an essential formality is to specify the first directors' particulars and submit them to the Registrar of Companies (HE3 Form). Following the company incorporation, any amendments regarding the position of directors have to be submitted to the Registrar.
For tax purposes, the control and management of the company needs to be preserved in Cyprus, and this means that the majority of directors need to reside in Cyprus. Our Cyprus law firm may appoint a person/ persons from our team as nominee director(s). Moreover, we offer nominee secretary services upon request.
Director's Powers and Duties
The Board of Directors is considered as the power-wielding organ of the company. It essentially runs the company's business operation, and according to Article 80 of Table A, the Board of Directors may exercise all the powers of the company, unless the provisions of law, and/or the Memorandum and Articles of Association and/or regulations made by shareholders in general meetings provide otherwise.
As to the duties of directors, these normally include fiduciary duties which are of an equitable nature and refer to the directors' responsibility to act for the company's best interests, and common law duties which, in essence, call for due consideration of the principles of the law of negligence.
Our Services
- Managing the process of company incorporation, including applying for company name, and preparing and submitting all the necessary documentation with the Registrar of Companies.
- Provision of Nominee Services.
- Updating company's particulars following the incorporation.
- Assistance with company's responsibilities, such as updating the company's UBO Registry.
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.