A company is a distinct -legal person- created in order to
separate legal responsibility for the affairs of a business
(or any other activity) from the personal affairs of the
individuals who own or operate the business.
The Companies Law of North Cyprus, which closely resembles
the United Kingdom's Companies Act 1948, provides for private
companies, exempt private companies and public companies. All
companies are required to register with the Registrar of Companies.
Private companies need two or more founding members, are limited to
fifty shareholders (except for employees or ex-employees), cannot
offer shares for public subscription and impose restrictions on the
transfer of shares. Exempt private companies are subject to the same
regulations as other private companies except that they are not
required to file financial statements with the Registrar of Companies.
Shares in exempt private companies may not be held by a foreign
registered company or a corporate body. Only registered holders of
shares can have any interest in the securities of the company.
Public companies need 7 or more founding members, can seek public
subscription of shares, and do not restrict share transfers.
In all cases, shares must be registered (not bearer shares permitted).
Shares may be ordinary or preferred with differing voting rights and
can be paid in cash or other consideration. Final responsibility for
conduct of a company's business rests with the board of directors,
elected by shareholders, though the actual conduct of the business
generally is in the hands of executive directors / managers.
A general meeting of shareholders must be held once a year (the
annual general meeting), although special meetings of shareholders
can be called. The following information is required for the
registration of a company:
- Name of the company, approved by the Registrar of Companies;
- Memorandum and Articles of Association, in Turkish. The Memorandum
describes the scope of the intended corporate activities and the
Articles contain the rights of members, the rules governing the
internal management of the company, the duties of directors, etc.
- Names and addresses of subscribers (first shareholders);
- Address of Registered office;
- Names and addresses of the Company secretary and directors.
Under the Offshore Entities Law, the Ministry of Finance
requires the minimum paid up capital of offshore companies is
US$ 5,000. There are also minimum share capital requirements
for locally incorporated Offshore Banking Units which is
US$ 500,000. The minimum number of shareholders required for
Offshore Banking Units is 10. Directors of offshore banking
units cannot be less than two.
As stated above, the Companies Law stipulates a minimum of two
shareholders. In case one member desires to hold 100% of a
company, or desire the company is to be a wholly owned subsidiary
of another, a local or foreign nominee may be used as the second
member, usually holding one share.
Nominees or trust companies may also be used when anonymity is
required. However, in all cases, full disclosure of all beneficial
owners of the share should be made to Ministry of Finance. Such
information remains strictly confidential.
A private company must have at least one director, whereas a public
company must have at least two directors. There are no requirements
as to nationality or residency.