The liquidation method can be either voluntary or compulsory. The Board of Directors must select the most suitable mechanism for the dissolution of a company, depending on the circumstances. Part V of the Companies Law (Cap.113) is the main legal framework which regulates the liquidation procedure in Cyprus. There are three ways in which liquidation can be triggered
Under Cap.113, the Registrar of Companies may remove from the Register any company which appears not to be doing business and is not operating. The Registrar of Companies may struck of a company at the request of its directors which is delivered to the registrar of companies in the specified form and provided that the company has fulfilled its obligations arising from the Law or in case the company fails to pay the annual corporate levy.
Examinership is a process whereby the protection of the Court is obtained to assist the survival of a company. Basically, it allows a company to restructure with the approval of the Court.
The principal rationale underlying the concept of examinership is to allow a company that is experiencing financial difficulties a period of protection from creditor action during which a third party (the examiner) has an opportunity to examine the affairs of the company and, if there is a reasonable prospect of the survival of the company and all or part of its undertaking as a going concern, to formulate proposals for a scheme of arrangement to facilitate such a survival
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