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[BANKRUPTCY, INSOLVENCY & REHABILITATION PROCEEDINGS IN CYPRUS]
Further, no creditor shall be entitled to register a judgment or mortgage or any other encumbrance on the debtor's property 3. Winding up (Company Liquidation) The Companies Law, Cap.113 provides for two principal forms of winding up a company. A company may be wound up voluntarily, out of court, by its members or by its creditors, or it may be placed under a compulsory winding up following an application to the court which can be made by the company itself, a member, or a creditor. 3.1 Voluntary Winding Up by Members A company may be wound up voluntarily by its members by the passing of a special resolution with at least 75% majority of the members present and entitled to vote. Within 5 weeks before the members’ resolution approving the winding up, the majority of the company’s directors must make a statutory declaration of solvency under oath, declaring that they have made a full inquiry into the affairs of the company and that they are of the opinion that the company will be in a position to pay in full all of its debts and liabilities within a period not exceeding twelve months from the commencement of the winding up. The winding up is deemed to commence on the date of passing the special resolution for this purpose. With the commencement of the winding up, all the powers of the directors are shifted to the liquidator, unless the liquidator approves that any of them are to be exercised by the directors. The liquidator takes possession of the company’s assets, liquidates and distributes them amongst the creditors as per the priority provided by the law and any surplus to the members.
To complete the process, the liquidator submits to the Registrar of Companies and Official Receiver the final winding up accounts along with the minutes of the final meeting. Three months after the final submission to the Registrar, the company is deemed dissolved, and the Registrar issues a certificate of dissolution. 3.2. Voluntary Winding up by Creditors Where the company is insolvent, a voluntary winding up shall be a voluntary winding up by creditors . The procedure initiates with a general meeting of the members and a meeting of the creditors. At the meetings, the members and creditors nominate the liquidator. Where the person nominated by the creditors differs from the one proposed by the members, the creditors ’ nomination prevails. Same as in a voluntary winding up by the members, following the carrying out of the liquidation of assets and payment to creditors, with the expiration of three months as from the submission of the final accounts and minutes of the members’ and creditors’ meetings to the Registrar of Companies, the company is deemed dissolved, and the Registrar issues a certificate of dissolution. 3.3 Compulsory Winding up The most common grounds on which a company may be placed in a compulsory winding up are when: (a) the company is unable to pay its debts; and/or (b) the Court is of the opinion that it is just and equitable that the company should be wound up. The date of the commencement of the compulsory winding-up is the date that the petitioner’s application is filed with the court. With the issuance of the winding up order, the Official Receiver is appointed as provisional liquidator and shall act as such unless and until,
ILN Restructuring & Insolvency Group – Bankruptcy, Insolvency & Rehabilitation Series
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