Cyprus Annual Return HE32 for Companies
Cyprus private companies limited by shares are required to prepare and submit to the registrar of companies an annual return HE32. The Cyprus annual return HE32 must be accompanied by:
- Audited Financial Statements (the “FS”)
- Declaration of the Director and Secretary (the “Declaration”) confirming that the FS submitted are those presented to the shareholder at an Annual General Meeting (“AGM”)
4 Common Mistakes Affecting Cyprus Annual Return HE32
Although the above seems a simple and practical approach often at times, without proper guidance, the following common errors and mistakes are identified regarding the submission of a Cyprus annual return HE32 :
- The Declaration is signed without first having held an AGM;
- The Reference Date of the Cyprus Annual Return HE32 is not as per the provisions of the law;
- The company does not maintain e-filling codes with the registrar of companies;
- The particulars included in the annual return HE32 are not correct and/or do not reflect the company’s standing as at the reference date.
In response to the 4 common mistakes and errors identified above the Cyprus registrar of companies has issued warning letters to each such Cyprus company informing them to correct this within 6 months otherwise the company will be struck off the registrar. As of April 2020 though companies with late fillings will be liable to a penalty of up to €500, continue reading on the new penalties for Cyprus Companies by visiting the previous post.
Best Practice for Submitting the Annual Return
In order to resolve the above errors and ensure that annual returns are submitted correctly and acutely the following practice is advised:
- Conduct a review of the public available information at the registrar of companies. This will allow the preparation of the corporate register of the Company as well as to identify key information such as the incorporation date and the reference date of the last return.
- Identify the reference date for the current annual return as well as to identify whether the company is submitting this late or on time.
- Hold a board of directors meeting approving the financial statements, the statement of comprehensive income, the auditors representation letter and engagement letter as well as calling the Annual General Meeting.
- Hold the annual general meeting of the shareholders and present the financial statements of the company and once this is held then the secretary can sign the Declaration.
- Obtain e-filling codes from the registrar of companies in order to allow for electronic submission of the annual returns, the Declaration and the FS.
What information is included in a Cyprus Annual Return HE32
The HE32 comprises of the following sections:
- The Company’s registered office
- Capital of the Company
- The authorized share capital along with the class, nominal value and number of shares par class
- The class and number of issued shares as at the reference date of the annual return HE32
- The class and number of shares issued at a discount
- The class and number of shares paid in cash and the value of any share issuance.
- Shareholder Particulars
- The particulars of the persons holding shares in the company as at the reference date along with the class and number of shares they hold
- Secretary and Director Particulars
- The particulars of the director and secretary that held office as at the reference date.
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Publications on Cyprus Business Law
Cyprus private companies limited by shares are required to prepare and submit to the registrar of companies an annual return HE32. The Cyprus annual return HE32 must be accompanied by (1) Audited Financial Statements (the “FS”) and (2) Declaration of the Director and Secretary (the “Declaration”) confirming that the FS submitted are those presented to the shareholder at an Annual General Meeting (“AGM”)
A company is formed in Cyprus by way of law. The principal legal instrument giving such right is the Companies Law, Chapter 113 of the laws of the Republic of Cyprus, however the memorandum and articles play an equal important role in a Cyprus Company Formation. These two ‘constitutional’ documents are often called upon to deal with business matters of the Company and in other times to define the rights of the various parties.
A Cyprus Private Company Limited by shares is a class of private companies incorporated in accordance with the Cyprus Companies Law, Chapter 113 of the laws of the Republic of Cyprus. It is the most frequently used vehicle in Cyprus its numbers, statistics of the Registrar of Companies, being over 200.000 and on an annual basis around 14.000 new companies are incorporated every year.
Within the Companies Law, Chapter 113 of the Laws of the Republic of Cyprus the term “Prescribed Form” (καθορισµένο τύπο) which means the Cyprus Registrar Forms is mentioned several times. Although the Companies law requires information to be submitted in the Prescribed Form this does not create automatic legality of the said action (e.g. change of director) is not implied
In the case of Morsa Trading the district court held that a person becomes a registered member of a Cyprus company when that person’s name is registered in the register of members. Accordingly, the transfer of shares in a Cypriot Company requires, amongst other things, the registration in the register of members.
Migrating a company to Cyprus is not without its challenges, nevertheless if the foreign countries laws allow a company may redomicile and migrate to Cyprus. After which time it will be registered under the companies law.