Is it important to liquidate a Cyprus company ?

[OffshoreJJ]

Hello,

3 years ago I opened a Cyprus company that I've never used because it was impossible to get a bank account. I requested to the firm who opened my company to close it many times but they never answered me. Now they added my name as director of the company 3 years later instead, before it was a nominee.

What is my risk if I don't close this company as I'm now the official director ? The company has absolute 0 activity and was never active. I don't know if they did anything else like any reports or not.

Best regards,

 

[Martin Everson]

OffshoreJJ said:
What is my risk if I don't close this company as I'm now the official director ? The company has absolute 0 activity and was never active. I don't know if they did anything else like any reports or not.
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If they keep all company accounts and records up to date then no risk tax wise as you will be able to prove company has no activity etc. Only risk is if you were required to declare any directorships you hold where you live. Same with declaring shareholdings or significant interests etc.

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[OffshoreJJ]

Thanks, I think they are not keeping anything up to date in my opinion as I haven't paid anything for this. What would be the best solution for me right now to liquidate the company ?

 

[Gediminas]

OffshoreJJ said:
Thanks, I think they are not keeping anything up to date in my opinion as I haven't paid anything for this. What would be the best solution for me right now to liquidate the company ?
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Yes, liquidate it. Try contacting your agents for that, and if you can't move further - drop me an email. Maybe I would be able to help in some way.

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[OffshoreJJ]

They just replied to me, it seems like they took back the company, this is a very good news as I wont need to liquidate it :

"The information provided below is wrong. You have been removed from the company and have nothing to do with the company.

That being said, in order to close a company a whole procedure needs to take place. It is indeed true that at some point my colleagues made a mistake and updated the company records, although, this had been immediately corrected."

 

[cyprus123]

Your company will find a new owner soon ;-)

Interesting that they use it as a shelf company. How can they know that the company has no obligations... But good for you.

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[OffshoreJJ]

Because I just paid them the fee but never received any document and they were the nominees, so I couldn't do anything without their knowledge. When the bank refused to open my account I told them that I wanted to liquidate the company. It was clear for them that the company was clean.

 

[cyprus123]

I understand that, but it's not enough as they can't be 100% sure. Anyhow, I was just wondering, not my business 🙂

I am sorry that you made such an experience, usually you shall get a great service in Cyprus.

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[avalanche]

OffshoreJJ said:
Because I just paid them the fee but never received any document and they were the nominees, so I couldn't do anything without their knowledge. When the bank refused to open my account I told them that I wanted to liquidate the company. It was clear for them that the company was clean.
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Holy s**t did they just take your company without you knowing anything about it?

Im about to open a Cypriot Ltd with Nominee Director (service provider told me its necessary for substance and banking) but shares would be mine, how do I protect myself from such experience?

Would my company be safe if I'm 100% shareholder with a Nominee Director?
Do I have any rights to sign docs as a 100% shareholder or it all has to go through Nominee?

 

[JohnLocke]

I have seen it all and gave 0 attention to it. Some of the Cyprus corps I owned in the past got treated the same way when I want to get rid of them. After many years nothing happened at all.

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[cyprus123]

@avalanche If you pay the nominee fees they will not stop providing services and they will not take away your company. Anyway it is not typical for Cyprus to "take away" companies from clients.

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[avalanche]

cyprus123 said:
@avalanche If you pay the nominee fees they will not stop providing services and they will not take away your company. Anyway it is not typical for Cyprus to "take away" companies from clients.
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The very fact that it is possible makes me concerned lol. What if the service provider has malicious intent?

 

[Sols]

avalanche said:
Holy s**t did they just take your company without you knowing anything about it?

Im about to open a Cypriot Ltd with Nominee Director (service provider told me its necessary for substance and banking) but shares would be mine, how do I protect myself from such experience?
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We don't know if @OffshoreJJ was direct shareholder or using nominee shareholder, which affects the complexities around protecting yourself. Nominees can't just take over a company. Technically, they can try but then you can complain to CySEC and/or take them to court.

avalanche said:
Would my company be safe if I'm 100% shareholder with a Nominee Director?
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If you're the shareholder and the directors or secretary misbehave, you can remove them and even sue them. If you're indirect shareholder, it becomes more complicated, especially if it's through a trust. But you still have legal recourse.

avalanche said:
Do I have any rights to sign docs as a 100% shareholder or it all has to go through Nominee?
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Shareholders don't normally sign agreements. You can ask for a Power of Attorney but then you jeopardise the company's tax residence and economic substance in Cyprus.

avalanche said:
The very fact that it is possible makes me concerned lol. What if the service provider has malicious intent?
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That goes for anything in life. If your local baker suddenly has malicious intent, you might find razor blades and rat poison in your croissant.

Take reasonable precautions and perform due diligence on your nominees. Work with reputable, regulated nominees. If you can, go to their office and meet them in person. At least once per year, check and make sure they are still licensed. Keep an eye on the public register to make sure no unauthorised changes take place to the company's directors, shareholders, and secretary.

Since they effectively work for you, you should be able to get passport copies and proof of address from the directors once the agreements and company are in place. If they refuse to provide that, run.

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This is the probably the answer to your question.