The vast majority of private limited liability companies in Cyprus are incorporated with a share capital. There are instances where shareholders may wish to inject additional funds into the company. One of the most common and structured ways to do this is through an increase of the company’s authorised share capital, followed by the issuance and allotment of new shares, either to existing shareholders or to new investors joining the company.

Key Considerations

Before proceeding with the issuance of new shares, it is essential to verify that the company has sufficient Authorised Share Capital available. The authorised share capital represents the maximum amount of capital (shares) that a company is permitted to issue without a Shareholders’ resolution.

If the existing Authorised Share Capital is not sufficient to accommodate the proposed increase, the shareholders should first approve a Resolution to increase the Authorised Share Capital of the company. Only then can the company proceed with the issuance of new shares.

Issuing New Shares

Once the authorised capital is confirmed or increased, the company may proceed with the issuance of new shares. This process involves:

• Board (and shareholder) approvals as required under the company’s Articles of Association.
• Filing the relevant forms with the Cyprus Registrar of Companies to reflect the increase in authorised and/or issued share capital.
• Updating the company’s statutory records, including the register of members.
• Issuance of certificates of Shareholders.

Role of the Company Secretary

The Company Secretary plays a vital role in this process. They are responsible for preparing the necessary resolutions, filing statutory forms, updating the internal corporate records, and ensuring that share certificates and certificate of Shareholders are issued in accordance with the Companies Law (Cap. 113).

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This article is provided for general information purposes only and does not constitute legal, tax, or other professional advice. It should not be relied upon as a substitute for specific advice on any individual matter or transaction. Professional advice should be obtained before acting or refraining from acting on the basis of any information contained herein.