A. Strike Off Process
The strike-off process is a fast and cost-effective method to make a company inactive. This method allows for the possibility of reinstating the company either through the tax office or by a court decision.

Steps Involved:

1. Notification:
o Auditors or accountants will send letters to the Cyprus Registrar of Companies, the income tax office, and the VAT office, informing them of the intent to close the company. The reasons for the strike-off must be clearly stated.

o Auditors must also request a tax clearance certificate by the Cyprus Income Tax Office. This process requires that all tax returns of the company are submitted and that there are not taxes due the date the filing is made. In addition managemnt accounts must escort the application with no liabilities or assets held by the company dated as recent as possible.

2. Examination by Authorities:
o The Cyprus Income Tax Office will check for any outstanding tax obligations.
o Financial statements must show no liabilities or pending tax issues.
o The company should not have any significant assets or liabilities before the strike off.

3. Approval:
o The income tax office and VAT office must confirm there are no objections to the strike-off; primarily no taxes or vat due.
o The Land Registry will check if the company owns any property, which can complicate the process.

4. Completion:
o The process can take between 6 - to 12 months. During this period, all financial statements, tax returns, and VAT returns must be up-to-date and submitted.

Conditions:
o The company must have a nil balance sheet (no assets or liabilities).
o The company should not owe money to third parties or have any VAT obligations.
o Bank accounts should be closed.
o Any remaining balances owed to directors or shareholders should be settled.

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B. Liquidation Process
The liquidation process is more complex and expensive, involving hiring lawyers and going to court. Once liquidated, the company cannot be reinstated, and all inquiries about the company cease.

Steps Involved:

1. Work by auditors:

o Auditors must also request a tax clearance certificate by the Cyprus Income Tax Office. This process requires that all tax returns of the company are submitted and that there are not taxes due the date the filing is made. In addition, management accounts must be provided to the lawyers who will file the application with no liabilities or assets held by the company dated as recent as possible.

o The Cyprus Income Tax Office will check for any outstanding tax obligations.
o Financial statements must show no liabilities or pending tax issues.
o The company should not have any significant assets or liabilities.

2. Legal Proceedings:
o Lawyers file for liquidation in court.
o They must prove that the company has no debts or pending issues with authorities.

3. Notification:
o Creditors and relevant authorities are notified to ensure there are no outstanding claims against the company.

4. Court Approval:
o The court reviews the case and, if satisfied, grants the liquidation. The court procedings take between 10 - 16 months.  

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Key Points:
o The liquidation process is irreversible.
o It ensures that the company has settled all its obligations before closing.

 

Comparison and Considerations

Strike Off:
o Faster and cheaper.
o Reversible.

Liquidation:
o Lengthy and costly.
o Irreversible.

Final Notes
Companies must ensure all financial and legal obligations are met before opting for either process. Regular consultation with auditors and legal advisors is recommended to avoid complications.

By following these guidelines, companies in Cyprus can effectively manage the closure process, whether through strike-off or liquidation, ensuring compliance with all regulatory requirements.

CYAUSE Audit Services: If you need to have your Cyprus company closed either way (liquidation or strike off), our team of auditors will be more than happy to assist you. Contact us at kt@cyprusaccountants.com.cy for a free consultation today.

CYAUSE AUDIT SERVICES

About Us

CYAUSE Audit Services Ltd is a regulated audit and assurance firm handling statutory compliance services to clients such as company formation and administration, accounting, payroll, audit, and  tax services. We are also involved in the closing proceedings of Cyprus companies and assist our clients with strike off or the liquidation of their company.

CYAUSE Audit Services is an Audit & Assurance firm with offices in Nicosia and Limassol. During 2015 we have been awarded by I.C.P.A.C and the A.C.C.A (local and international association of Chartered Certified Accountants) for the Quality of our Audit Services and our Office's Procedures.

Being a Truly International Audit & Assurance firm, we have associates from all over the world and we are constantly looking for new associates to expand our network further. At present, CYAUSE Audit Services operates internationally as Accace Circle, a co-created business community of like-minded BPO providers and advisors who deliver outstanding services with elevated customer experience.

Our network covers almost 40 jurisdictions with over 2,000 professionals, it supports more than 10,000 customers, mostly mid-size and international Fortune 500 companies from various sectors, and processes at least 170,000 payslips globally.

CYAUSE Audit Services Ltd is also a member of BKR International, an american international association of accounting and advisory firms and the 3E Accounting Network, an international accounting network which originates from Hong Kong and has more than 80 members from all over the world.

Contact Us

If you would like us to assist you with your investment firm or fund please contact us at enquiries@cyprusaccountants.com.cy or call us at +357 22 336 309.

Learn More about Cyprus Corporate Environment

Information about CYAUSE Audit Services and the Cyprus Corporate & Tax System can be obtained from our Website or our YouTube channel which provides valuable information about the Corporate & Tax Environment of Cyprus.