Recent amendment to Companies Law on existing and new Variable Capital Investment Companies
The recent Law N.150(I)/2021, introduced on 5 November 2021, amends the Companies Law, Cap. 113 (the “Law”) with regards to the establishment and operation of Variable Capital Investment Companies (“VCICs”).
The legal changes brought by this amendment relating to VCICs are as follows:
Offer for subscription: The provisions in the Law relating to offers for subscription do not apply in relation to shares/debentures of Cyprus or offshore companies which are governed by (1) the Public Offer and Prospectus Law (“Prospectus Law”), and/or (2) Open-Ended Undertakings for Collective Investments Law (“UCI Law”) and/or (3) the Alternative Investment Funds Law (“AIF Law”).
Notification for consolidation of share capital: The new sub-section 61(1A) of the Law permits limited liability companies which will be converted into VCICs, to consolidate their existing share capital comprised of a specified number of shares with par value and re-divide it into shares that carry no par value. For the implementation of this conversion, a relevant notification (Form HE16) and court order (if applicable) must be submitted to the Registrar of Companies (“RoC”) for the conversion.
Information included in Annual Returns: According to the amended section 118(1)(c) of the Law, VCICs are exempt from including in their annual returns certain information, since by virtue of their VCIC nature such are not applicable to them.
New Part “XA”: The amending law introduces a new Part XA in the Law on VCICs mainly covering the following:
Strike-off from the register: As per the new sub-section 327(2A)(c) of the Law, a VCIC may be struck off the register if it fails to submit a special resolution to the RoC by 05 November 2022, with which the VCIC amends its Memorandum and Articles of Association to be compliant with the provisions of the new Part XA outlined above.
Our Financial Services, Funds and Capital Markets team will be happy to support clients with the new regulatory requirements promptly and efficiently prior to the lapse of the above deadline.
Authors: Andria Koukounis, Polyvios Nikolaou