Guidance

Merger or division

Private companies may enter into a compromise, arrangement, reorganisation or merger. A private company may merge with any other company or companies when the plan of such a reorganisation allows for the transfer of business or of ownership of the transferring company, to another company.

Public companies may proceed with a merger or division as follows:

• merger by acquisition of one or more public companies by another public company, can be done in the following ways:
  • one or more companies are wound up without going into liquidation and, transfer all their assets and liabilities to another existing company making available to their shareholders shares of the latter company (the acquiring company) and any setting off amount in cash;
  • a company is acquired by another, which holds 90% or more but not the total shares of the first company;
  • one or more public companies are wound up without going into liquidation and, transfer all their assets and liabilities to another company which possesses all shares and other titles conferring the right to vote at the general meeting;
• merger by formation of a new public company, whereby one or more companies are wound up without going into liquidation and, transfer all their assets and liabilities to a new company that they set up;
• division by acquisition or division by formation of new companies, whereby a company is wound up without going into liquidation and, transfers all its assets and liabilities to numerous existing companies or new companies respectively.

Conditions

Before two or more companies proceed with a merger, the following procedure must be followed:

• provided there is a relevant provision in the articles of association of the company/companies allowing a merger, the directors of the companies must prepare the merger plan pursuant to the provisions of the Companies Law, and submit it together with the relevant application to the Court for sanction. It is noted that the reorganisation plan is published at least 30 days prior to the date the general meeting is convened;
• the Court then issues a court order convening by notice a meeting of the creditors or members, in order for the merger/division plan to be approved by the majority of the creditors or members of the companies referred to in the merger/division plan. Such notice is accompanied by a report which specifies the consequences of the merger;
• once the merger/division plan is approved by the meeting of the creditors and members, a second application is submitted to Court, along with the relevant resolution of the creditors and members, requesting the sanction of the merger/division plan and the issuance of the relevant court order by the Court.

Registering a merger/division

Every company (absorbed or acquiring), participating in the merger/division is obliged to submit (by hand/post) to the Registrar of Companies within seven (7) days from the date of issue, a copy of the court order accompanied by:

If an acquiring company:

• the merger/division plan; and
• the fee of twenty euros (€20) and, the additional fee of of twenty euros (€20) if the accelerated procedure is required. Fees are payable in cash by cheque (made payable to “Registrar of Companies”), via an account maintained with the Department of the Registrar of Companies or via bank transfer.

If an absorbed company:

• the merger/division plan;
• the resolution (if the resolution is other than special);
• certified translation of the resolution, either by an affidavit or by sworn translator of the Republic of Cyprus, in case the resolution is in a language other than Greek;
• certified translation of the resolution, either by an affidavit or by sworn translator of the Republic of Cyprus, in case translation file has been created, with an additional fee of twenty euros (€20) and a fee of forty euros (€40) if the accelerated procedure is required;
• the fee of forty euros (€40) and, the additional fee of of twenty euros (€20) if the accelerated procedure is required. Fees are payable in cash by cheque (made payable to “Registrar of Companies”), via an account maintained with the Department of the Registrar of Companies or via bank transfer.

You are advised to refer to the main criteria of review and most common reasons for rejection, so as to acquire a better understanding of what is required and to facilitate the process further.

Provided that the Registrar of Companies is satisfied that all, relevant to the circumstances, legal requirements have been met, he will proceed with registering the merger/division and updating the companies register.

In the event that the company requires proof of the change made in the companies register it may submit a request to obtain certified copies of company.