Articles of Association

The Articles of Association sets out the regulations for the company’s operation including but not limited to decision-making quorum, transfer of shares and pre-emptive rights, outlines the governance, divide the powers between the directors and members of the company for enabling the functioning of the company and smooth operation of the company’s business.

Articles of Association Model would depend on the type and activities of the company to be incorporated.

A limited liability private or public company with shares may adopt the regulations contained in Table A of the First Schedule of the Companies Law as its Articles of Association or choose to adopt part of these regulations.

After drafted and certified by our associated lawyers the Memorandum and Articles of Association is submitted to the Department of Registrar of Companies and Official Receiver along with other documents for company registration.

The Articles of Association are important to a business, which is why it is vital they are bespoken appropriately to meet and correspond with the company’s business needs. It should be noted that the Articles of Association are the cornerstone of the company and when properly tailored reassure shareholders of a company’s powers and expectations of Directors.

Any amendments of the Memorandum and Articles of Association should be notified to the Registrar of Companies. For further information on this topic, please contact us directly.

What do the Articles of Association Contain?

The Articles of Association bind each member of the company to compliance and outline how the company should be run. It specifies the powers of the Directors and guides as to comities’ responsibilities, employees’ options (if any), contracts’ conclusion by the Company, profit distribution, and other related matters. In principle, the Articles of Association are cover such major topics as:

  • Appointment and removal of Directors
  • The powers of the Directors and any restrictions
  • Company members’ liability
  • Meetings, voting and decision making by the Directors in transactions’ terms
  • Specifies class, value and voting rights attached to share classes
  • Procedure, and rules for shares’ transfer, selling, purchasing and if it requires shareholder approval
  • The borrowing ability of the company
  • Contracts’ conclusion, and collaboration between the Company’s clients and the company
  • Indemnity, and insurance of the Company
  • Shareholders’ reserve matters and etc.
  • Why change an existing version of the company’s Articles of Association

    There are many reasons why a company may choose to amend its Articles; some of these are set below for a sample purpose:

  • Compliance with changes to the Companies Law – CAP 113
  • Broaden the Company’s Statutory Articles which was used at the incorporation of the Company because now the business has expanded and requires more tailored Articles of Association to support the development of the Company and its business growth
  • To introduce new classes of shares and rights attached to them
  • To schedule dividends’ distribution
  • To anticipate potential investments in the Company and to prevent conflicts of interests etc.
  • Amending of the Articles of Association

    A company may amend specific regulations of its Articles of Association (containing the regulations of its operation) or a complete document by a special resolution.

    For completing the amendments of the Articles of Association, the company is obliged to submit to the Registrar of Companies the relevant special resolution within fifteen (15) days from the date of the resolution.

    Registering amendment of the Articles of Association

    Similarly to the filing of the amendments of the Memorandum of Association a company may submit the resolution for the amendment of the articles of association, either through the electronic filing system of the Registrar of Companies or deliver the hard copies by hand.

    To complete such a filing the following documents need to be submitted to the Registrar of Companies along with the special resolution:

  • the amended articles of association;
  • the relevant fee

  • In case the documents are in a language other than Greek a certified translation of resolution and Articles of Association in the Greek language required; such a translation may be arranged by an affidavit or by a sworn translator of the Republic of Cyprus, which our office will be happy to assist you with to facilitate the process;

    Assuming that the Registrar of Companies is satisfied with documents filed and have no further queries/additional request on the matter, the changes will be registered and the file of the company updated.

    Finally, as result of the amendments made Registrar of Companies issuing certified copies of the amendment of regulations.

    Memorandum and Articles of Association is a publicly accessible document

    It is a matter of fact that the Articles of Association is a publicly available document and therefore can be viewed freely by any third party interested in it. It is therefore advisable that provisions that are confidential are kept private. This may be achieved by the creation of a Shareholders Agreement working side by side with the Articles of Association whereas all confidential aspects and matters set so that to keep private from the public.

    Why and what for one may need a Shareholders Agreement?

    Although a Shareholders Agreement is not a legal requirement, it provides certainty and security for existing members of the company as well as clarity of corporate structure and business functioning to potential investors. It works as a safeguard for keeping confidential matters private and undisclosed from outsiders of the company as opposed to publicly available Articles of Association.

    More specifically a Shareholders Agreement secures the following:

  • Reduces the conflict of interests’ risk between members of the company
  • Protecting the rights and interests of minority shareholders
  • Providing clarity and certainty to potential investors
  • Providing additional security to members of the company concerning pre-agreed terms by outlining the legal position of the agreement
  • Excluding the possibility of one shareholder having a detrimental effect on the others when corporate structure changed
  • Protecting the deceased shareholders’ families’ interests
  • Providing the grounds and responsibility level on which important decisions are made and etc.

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