In an effort to make the island a more attractive jurisdiction for shipping, Cyprus enacted a new law which aims to simplify the procedures and the rules governing the operation of Cypriot shipping companies.
The Shipping Limited Liability Company Law of 2022 (‘S.L.L.C. Law’) establishes a new type of corporate entity, the shipping limited liability company (‘S.L.L.C.’), which its sole purpose is the ownership and operation of ships under the Cyprus flag.
The Benefits
The new Law makes the incorporation and administration of a shipping company simpler and much more flexible in comparison with an entity which is governed under Cap.113. These include, inter alia, the following:
- The reduction of the share capital and the amendment of the Memorandum of a S.L.L.C. may be effected without a court order.
- In contrast with Cap. 113, ‘very small’ S.L.L.Cs (as defined under the S.L.L.C. Law) are exempt from the obligation to publish their financial statements and ‘small’ S.L.L.Cs only need to publish their balance sheet.
- Administrative procedures are reduced as the S.L.L.C. Registrar can:
- Approve electronic signatures;
- Allows for electronic submissions;
- Issue documents in electronic form.
Another major difference is the requirement for S.L.L.Cs’ secretary to be a lawyer.
S.L.L.C. Registrar
The competent authority for the supervision and registration of the S.L.L.C’s is the Cyprus Shipping Deputy Ministry (‘SDM’). The SDM’s General Director, as will be appointed from time to time will undertake the role of the ‘Registrar’ (‘S.L.L.C. Registrar’), handling all matters previously handled by the Cyprus Registrar of Companies and Intellectual Property (‘Registrar of Companies’).
Continuing as a S.L.L.C.
Limited liability companies already incorporated under Cap. 113 may under the new law exercise an option to continue their operation as a S.L.L.C., provided that certain legal requirements are satisfied. This is done through an application to the S.L.L.C. Registrar.
Provided that the S.L.L.C. Registrar is satisfied that the company is eligible to be registered as a S.L.L.C., a Provisional Certificate of Continuity will be issued. Accordingly, the company will be temporarily considered as a S.L.L.C., holding all the rights, powers and being subject to the obligations of a S.L.L.C. under the S.L.L.C. Law. However, within 6 months from the issuance of the Provisional Certificate of Continuity the company shall provide evidence from the Registrar of Companies that all the obligations of the company are concluded and has been struck off from the Registrar of Companies. Upon satisfaction of this requirement, the S.L.L.C. Registrar will issue a Certificate of Continuity and the company will continue its operations as a S.L.L.C.
Entry into force
The provisions of the S.L.L.C. Law will enter into force on a date to be determined by a decision of the Council of Ministers published in the Official Gazette of the Republic of Cyprus.
How can BYBLOSERVE MANAGEMENT LIMITED assist you?
Our team can advise and assist you on any matter pertaining to the new legal regime including the incorporation of a new company as a S.L.L.C as well as the transfer of a company currently governed by Cap.113 to a S.L.L.C.