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Public Cyprus companies
To attract investments, or for other purposes, a Cyprus company can be in the form of a PUBLIC COMPANY.
A private Cypriot company cannot, does not have the right, to issue any corporate securities (for example, bonds) and offer them to an unlimited number of persons. Only public companies in Cyprus have such a right.
Thus, only a public company in Cyprus can be an issuer of traded securities (for example, bonds).
Requirements for public companies in Cyprus.
NUMBER OF SHAREHOLDERS: The minimum number of shareholders in a public company must be at least 7 (seven). At the same time, the maximum number of shareholders is not limited. The requirements for the minimum number of shareholders for a public company in Cyprus are not high enough, if we compare them with the requirements for a public company in Russia, where the number of shareholders should not be less than 50 (fifty).
NUMBER OF DIRECTORS: There must be a Board of Directors of at least two. At the same time, Directors can be both individuals and legal entities.
MEETINGS OF SHAREHOLDERS: The Law stipulates that the first general meeting of shareholders of a public company must be held no later than 18 months after the incorporation of the company. After the first meeting, general annual meetings of shareholders of a public company must be held without fail, no later than 15 months after the previous general annual meeting of shareholders. At the same time, the law does not require holding general meetings of shareholders in Cyprus, such meetings can be held in any country in the world.
AUTHORIZED CAPITAL OF A PUBLIC COMPANY: The minimum amount of authorized capital for a public company is €25,629 Euro(Euro).
The main difference between public companies in Cyprus and private companies is that the transfer of shares of such companies should not be restricted in any way, shares can and should be transferred from one person to another without any formal restrictions, including intra-corporate ones. This provision must necessarily be specified in the Charter of a public company, and neither the company's charter nor any other corporate document of the company should establish any restrictions on the right to dispose of the company's shares (such as, for example, pre-emptive rights, or provisions such as Drag along, Tag Along rights, etc.). In addition, only public companies have the right, according to the Companies Act, to buy back their own shares and own them, subject to a number of requirements and conditions specified in the Cyprus Companies Act (private companies in Cyprus are not endowed with such a right).
The second important requirement for public companies (and the difference from private companies) is that a public company must have a Prospectus of securities, or a Statement on the prospectus of securities. In case of transformation of a private company into a public company, the Issue Prospectus (or a Statement related to the Prospectus) must be provided no later than 14 days after the decision on the transformation by the shareholders.
Shares of public companies in Cyprus may be allowed to be traded on the organized Cyprus securities market, i.e. on the Cyprus Securities Exchange (Cyprus Stock Exchange). The requirements for listing shares on the Cyprus Stock Exchange are not exceptionally complex, but a number of requirements must be fulfilled without fail, under the threat of de-listing. Namely, in a company whose shares are allowed to be listed on the Cyprus Stock Exchange, no shareholder can own more than 70% of the shares of such a company, and at least 25% of the shares of such a company must be in free circulation, i.e. in an offer for sale/purchase on the Cyprus Stock Exchange.
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