Annual General Meeting Rules Every Cyprus Company Must Know

Understanding Annual General Meetings (AGMs) in Cyprus

Annual General Meetings (AGMs) play a vital role in the corporate governance framework of companies registered in Cyprus. These meetings allow shareholders to assess the company’s financial performance and make key strategic decisions.

When Must AGMs Be Held?

According to Article 125 (1) of the Companies’ Law, a company must clearly identify the meeting as its annual general meeting in the official notice. Furthermore, no more than fifteen months should pass between two successive AGMs.

If the company holds its first AGM within eighteen months of incorporation, it does not need to convene one during the first or second year. However, missing the legal deadline may lead to fines of up to €427 imposed on both the company and its officers.

Who Organizes the AGM?

The Board of Directors has the responsibility to call the AGM and must ensure that shareholders receive at least twenty-one days’ notice. In single-member private companies, decisions taken during the AGM must be recorded in writing. Meanwhile, listed companies may also offer electronic participation, enabling shareholders to vote and engage remotely.

Quorum and Voting Rules

In private companies with more than one shareholder, at least three members must be present to form a quorum. Voting power corresponds to the shareholding—either one vote per share or per €17 of stock held. Shareholders can also appoint proxies, who hold identical rights to vote and speak at the meeting.

Key Agenda Items

AGMs typically cover essential matters such as:

– Approval of financial statements
– Discharge of directors and auditors
– Dividend distribution

In listed companies, shareholders who hold at least 5% of the issued share capital may propose agenda items, provided they submit them at least forty-two days before the scheduled meeting.

Post-AGM Filing Requirements

Within forty-two days after the AGM, the company must file the annual return with the Registrar of Companies. A director and the company secretary must sign this document. Before presenting financial statements to shareholders, the Board of Directors must formally approve them. In addition, certain companies—including public companies and large private limited companies—must ensure their accounts undergo an audit as required by law.

Dividend Distribution Rules

Public companies are not permitted to distribute dividends if their net assets fall below the sum of subscribed capital and non-distributable reserves. Dividends must be based solely on the profits from the previous financial year, adjusted to include retained earnings, statutory reserves, and any previous losses.

Documentation and Recordkeeping

The company must prepare and sign minutes from AGMs, board meetings, and management meetings. These signed minutes serve as legally valid evidence of the decisions taken during each meeting.

Filing Deadlines for Financial Statements

Companies must file their financial statements and tax returns by December 31. If submitted electronically, the deadline extends to March 31. These filings should include the financial statements, annual return, directors’ report, and a certificate of accuracy.

Reporting Director Appointments

When the company appoints a new director, the secretary must notify the Registrar by submitting form HE4 within fourteen days. This submission must reflect all relevant details of the appointment.

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