Establishing a one-stop-shop framework for shipping companies

On the 6th of October 2022, the House of Representatives approved the Shipping Limited Liability Company Law (SLLC) of 2022 (the “SLLC Law”), which essentially creates a one-stop-shop framework for companies owning ships under the Cyprus flag, making the Cyprus Shipping Deputy Ministry the competent authority (the “SLLC Registrar”) for the registration of such Shipping Limited Liability Companies (the “SLLC”).

The provisions of the Law are, to a great extent, inspired by the provisions of the Cyprus Companies Law (Cap.113) (the “Companies Law”), which had governed, up to now, the registration of shipping companies.

Important differences between the SLLC Law and the Companies Law
The following are some of the main changes implemented by the SLLC Law, in comparison to the Companies Law:

  1. Pursuant to Article 79 the secretary of an SLLC must be a lawyer.
  2. The SLLC Law does not require the SLLC to obtain a court order for the reduction of its shared capital, contrary to the requirements for limited liability companies pursuant to the Companies Law.
  3. The Memorandum of the SLLC can only be amended to reflect the increase or reduction of the SLLC’s share capital, pursuant to the provisions of the SLLC Law, noting that the amendment does not require a court order in order to be effected, contrary to the provisions of the Companies Law.

Continuation of limited liability companies that are currently registered at the records of the Registrar of Companies as SLLC

Shipping companies that have been incorporated or registered in the Republic of Cyprus as limited liability companies pursuant to the Companies Law, can continue their operations as SLLC pursuant to the SLLC Law and request from the SLLC Registrar to register such company as an SLLC.

Article 104 of the SLLC Law provides the requirements that need to be satisfied in order for a limited liability company to be registered at the records of the SLLC Registrar as an SLLC, more specifically an application to the SLLC Registrar must be accompanied by the following documents:

  1. Special resolution of the shareholders approving the registration of the company as an SLLC.
  2. Revised Memorandum and Articles of Association to achieve compliance with the SLLC Law.
  3. Corporate certificates of the applicant, including evidence of any registered charges.
  4. Consent from the creditors of the applicant.
  5. Confirmation from the Registrar of Companies, confirming that the applicant has settled all applicable fees and is in compliance with all of its obligations pursuant to the Companies Law.

The SLLC Registrar, once satisfied that the applicant is compliant with the requirements of the SLLC Law, certifies that the applicant is temporarily registered as continuing as an SLLC (the “Temporary Continuance Certificate”). From the date of issuance of the Temporary Continuance Certificate, the applicant is considered to be an SLLC incorporated pursuant to the SLLC Law and has all the powers and obligations afforded to an SLLC pursuant to the SLLC Law.

The applicant, must, within 6 months from the date of the Temporary Continuance Certificate, submit evidence to the SLLC Registrar from the Registrar of Companies, evidencing that the applicant has been fully compliant with all its obligations pursuant to the Cyprus Companies Law and that it has been struck off from the records of the Registrar of Companies. Following the submission of the abovementioned evidence, the SLLC Registrar, issues a certificate of continuance confirming that the applicant is continuing its operations as an SLLC.

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