REPUBLIC OF CYPRUS
MINISTRY OF ENERGY, COMMERCE,
INDUSTRY AND TOURISM
DEPARTMENT OF REGISTRAR OF
COMPANIES AND OFFICIAL RECEIVER
1427 NICOSIA
MANUAL
FREQUENT QUESTIONS / ANSWERS REGARDING
September 2013
RECEIVING/BANKRUPTCY ORDERS
AND WINDING UP’S
BANKRUPTCIES AND LIQUIDATIONS OF
COMPANIES SECTION
Postal Address of Bankruptcies and Liquidation of Companies Section:
19, Gerasimou Markora & Michalakopoulou Corner, 2nd Floor, Office 201, 1075 Nicosia
For Information please communicate: 22-458305, 22-466510, Fax No.: 22-466583
Website: www.mcit.gov.cy/drcor www.cyprusbarassociation.org
Email Address: insolvency@drcor.mcit.gov.cy
Bankruptcies and Liquidations Section
1
RECEIVING ORDERS
QUESTIONS
1. Against who are Receiving Orders issued?
2. Who can register a petition for the issuance of a Receiving Order?
3. How is the Receiving Order activated?
4. With the issuance of the Receiving Order does the applicant Creditor have any advantage?
5. With the issuance of the Receiving Order are the debts of the debtor / bankrupt deleted?
6. Are Receiving Orders and Bankruptcy Orders the same thing?
7. When a Receiving Order is issued is the Official Receiver the Trustee of the debtor?
8. What are the duties of the Official Receiver?
9. What is the purpose of the First Meeting of Creditors?
10. What are the duties of the Trustee?
11. What are the obligations of the debtor against the Official Receiver after the issuance of the Receiving
Order?
12. Does the debtor have any impact if he/she fails to appear at the office of the Official Receiver?
13. What prohibitions the debtor / bankrupt has after the issuance of the Receiving Order?
14. What happens to the Properties that have been transferred by the debtor before the issuance of the
Receiving Order?
15. Can the debtor work after the issuance of the Receiving Order?
16. What shall the creditors of the debtor do after the issuance of the Receiving Order?
17. What exactly is the Proof of Debt?
18. Why the Proof of Debt must be submitted?
19.
What should the creditor do about debts that have been created by the debtor after the issuance of
the Receiving Order?
20. When the debt is secured is a Proof of Debt submitted?
Bankruptcies and Liquidations Section
2
21.
Can the creditor, after the issuance of the Receiving Order, register a mortgage or Memo?
22. When a Receiving Order is issued and there are pending lawsuits or other legal proceedings against
the debtor, should these proceed against the Official Receiver?
23. If the debtor wants to file a lawsuit against anyone, is authorization required by the Official
Receiver?
24. If the bankrupt wants to file a lawsuit against anyone, is authorization required by the Official
Receiver?
25. In what order is the dividend paid to creditors?
26. Is property found in all cases of Receiving Orders?
27. Is annulment of a Receiving Order and restoration the same thing?
28. How is a Receiving Order annulled?
29. How can a bankrupt be restored?
30. After the bankrupts’ restoration, is the Receiving Order still in force?
31. How can someone be informed if a Receiving Order has been issued against someone and if it still is
in force?
32. How can I have more information or advice?
33. How can I get electronically the forms, applications, Proof of Debt forms, proxies, Statement of
Affairs and also be informed about the various procedures?
Bankruptcies and Liquidations Section
3
LIQUIDATION ORDERS AND VOLUNTARY LIQUIDATIONS
QUESTIONS
1.
Against who are Liquidation Orders issued?
2.
What are the modes of Winding-up?
3.
What amount should be owed by the company so it can be filed against it a petition for issuance
of a Liquidation Order?
4.
How is the Liquidation Order activated?
5.
With the issuance of the Liquidation Order does the applicant Creditor have any advantage?
6.
After the issuance of the Liquidation Order are the debts of the Company deleted?
7.
Are the Liquidation Order and dissolution, the same thing?
8.
When a Liquidation Order is issued is the Official Receiver the
Liquidator of the Company?
9.
What are the duties of the Official Receiver?
10.
What are the duties of the Liquidator?
11.
What are the obligations of the officers of the company in liquidation against the Official
Receiver?
12.
If officers of the company in liquidation do not appear in the offices of the Official Receiver do
they have any impact?
13.
When a Liquidation Order is issued, can the Company continue its operations?
14.
When a Liquidation Order is issued what must the creditors of company in liquidation do?
15.
What exactly is the Proof of Debt?
16.
Why is a submission of the Proof of Debt needed?
17.
About debts that a Company has created after the issuance of the Liquidation Order, what should
the creditor do?
18.
When the debt is secured is a Proof of Debt submitted?
Bankruptcies and Liquidations Section
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19. After the issuance of the Liquidation Order, can the creditor register a mortgage or Memo?
20. When a creditor wants to file a lawsuit against the company in liquidation or when there are
pending lawsuits or other legal proceedings against the Company, should these processes proceed?
21. If the company in liquidation wishes to file a lawsuit against anyone, or if there are pending lawsuits
or other legal proceedings against the company in liquidation, how can these processes proceed?
22. If the company in liquidation wishes to promote or defend a lawsuit with a lawyer of its preference,
what should the company do?
23. In what order is the dividend paid to creditors?
24. When is the execution of the Liquidation Order completed?
25. Is property found in all the cases of Liquidation Orders?
26. When is a Liquidation Order annulled?
27. When is the Company in Liquidation dissolved?
28. How is a Voluntary Liquidation processed?
29. How can someone be informed if a Liquidation Order has been issued and if it still is in force?
30. How can I get more information or advice?
31. How can I get electronically the forms, applications, Proof of Debt forms, proxies, Statement of
Affairs and also be informed about the various procedures?
Bankruptcies and Liquidations Section
5
RECEIVING ORDERS
QUESTIONS - ANSWERS
1.
Q: Against who are Receiving Orders issued?
Α:
Against natural entities, e.g. individuals.
2.
Q: Who can register a petition for the issuance of a Receiving Order?
A:
(a) Creditors for debt above €15.000, 00.
(b) Debtor himself for debts that total over € 50.000,00.
3.
Q: How is the Receiving Order activated?
Α:
Upon delivery of the Receiving Order by the applicant creditor to the Official Receiver along with the
amount of € 300,00 which is provided by the Regulations.
4.
Q: With the issuance of the Receiving Order does the applicant Creditor have any advantage?
Α:
No. The Receiving Order acts for the benefit of all creditors and not just for the applicant creditor.
5.
Q: With the issuance of the Receiving Order are the debts of the debtor / bankrupt deleted?
Α:
No. The debts still exist.
6.
Q: Are Receiving Orders and Bankruptcy Orders the same thing?
Α:
No. The Receiving Order is issued after a petition by a creditor and in rare cases by the debtor himself
and the person is called DEBTOR.
The Bankruptcy Order is issued after a petition by the Official Receiver, usually following a decision of
the First Meeting of Creditors and the person called "BANKRUPT."
7.
Q: When a Receiving Order is issued is the Official Receiver the Trustee of the debtor?
Bankruptcies and Liquidations Section
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Α:
8.
Q:
No. The Official Receiver is the receiver of the debtors’ property. The Trustee who may be a person
other than the Official Receiver is appointed by Court Order, usually following a decision of the First
Meeting of Creditors.
What are the duties of the Official Receiver?
Α:
 Receiving the Receiving Order with the payment of € 300,00 for costs of enforcing the Order
 Records the personal information of the Debtor to the Bankruptcy Registry
 Publishes the Receiving Order
 Sends letters to Banks, Land Register Offices, Income Tax, VAT etc.
 Receives statements from debtors
 Helps the debtors to fill in the statement of affairs of their property
 Investigates the conduct of the debtor and the reasons of failure
 Conducts researches
 Sets the property of the debtor under his protection
 Submits a report to the Court when is requested
 Registers to the Court various applications against the debtor
 Convenes the First Meeting of Creditors
9.
Q: What is the purpose of the First Meeting of Creditors?
Α: The appointment of Trustee or the declaration of the debtor in bankruptcy and the appointment of
Supervisory Commission.
10.
Q: What are the duties of the Trustee?
Α:
 The collection and preservation of the property of the bankrupt
 The conduct of researches
 The realization of property of the bankrupt
 The distribution of income to the creditors
 To raise, defend and authorize legal proceedings relating to the estate of the bankrupt.
11.
Q: What are the obligations of the debtor against the Official Receiver after the issuance of the
Receiving Order?
Bankruptcies and Liquidations Section
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Α:
He must come to the offices of the Official Receiver for his preliminary deposit and submit the
Statement of Affairs of his property and provide any information requested and to deliver possession
of his/her property which by law is distributable to creditors .
12.
Q: Does the debtor have any impact if he/she fails to appear at the office of the Official Receiver?
Α:
The implications are very serious as long as there is disobedience in the Receiving Order and is
punishable by imprisonment.
13.
Q: What prohibitions the debtor / bankrupt has after the issuance of the Receiving Order?
Α:
 He/she cannot create other debts.
 He/she cannot sale or transfer any property.
 He/she cannot have a bank account without the permission of the Official Receiver or Trustee.
 He/she cannot be traded in any way without referring to the Receiving Order and or marketed
under a different name from that in which he/she was declared bankrupt.
14.
Q: What happens to the Properties that have been transferred by the debtor before the issuance of the
Receiving Order?
Α:
Transfers to third parties, made the last ten years before the issuance of the Receiving Order are
considered under certain circumstances in accordance with the Law fraudulent and are cancelled.
15.
Q: Can the debtor work after the issuance of the Receiving Order?
Α:
Certainly can and should work to be able to support himself/herself, his/her family and settling his/her
obligations. However, his/her work must be carried out in such a manner so as not to create other
debts.
16.
Q: What shall the creditors of the debtor do after the issuance of the Receiving Order?
Α:
They need to register to the Official Receiver or to the Trustee, Proof of Debt along with of all the
evidence. The debt must necessarily precede the Receiving Order.
17.
Q: What exactly is the Proof of Debt?
Α:
It’s the Bankruptcy form No. 30, which is made under oath before the Registrar of Court or the Official
Receiver and submitted to the Official Receiver by the creditor or his representative.
18.
Bankruptcies and Liquidations Section
8
Q:
Α:
Why the Proof of Debt must be submitted?
 To give the creditor the right to vote at the First Meeting of Creditors.
 To enable the creditor to receive dividend if property exists.
19.
Q: What should the creditor do about debts that have been created by the debtor after the issuance of
the Receiving Order?
Α:
The creditor cannot submit a Proof of Debt form, but can proceed with criminal proceedings to the
Court.
20.
Q: When the debt is secured is a Proof of Debt submitted?
Α:
The creditor could submit a Proof of Debt but will lose his/her security. If the debt is not fully secured
a Proof of Debt is submitted for the amount of unsecured debt.
21.
Q: Can the creditor, after the issuance of the Receiving Order, register a mortgage or Memo?
Α:
No. Only a Proof of Debt can be registered.
22.
Q: When a Receiving Order is issued and there are pending lawsuits or other legal proceedings against
the debtor, should these proceed against the Official Receiver?
Α:
No. These procedures should stop and a Proof of Debt must be submitted. If the creditor wishes to
proceed to the court for the issuance of a Court Decision, he/she should continue against the debtor
and not against the Official Receiver.
23.
Q: If the debtor wants to file a lawsuit against anyone, is authorization required by the Official
Receiver?
Α:
No. As long as the person is a debtor and the Official Receiver is not a Trustee, he/she will proceed
without the authorization of the Official Receiver.
24.
Q: If the bankrupt wants to file a lawsuit against anyone, is authorization required by the Official
Receiver?
Α:
If the person is bankrupt and the Official Receiver is a Trustee, then he will need the authorization of
the Official Receiver with a bank guarantee of the amount which will depend on the scale of the
action.
Bankruptcies and Liquidations Section
9
25.
Q: In what order is the dividend paid to creditors?
Α:
(a)
(b)
(c)
(d)
(e)
Actual expenses and remuneration of the Trustee
Trustee rights
Expenses of applicant creditor
Priority debts such as government taxes, duties, etc.
Unsecured debts
26.
Q: Is property found in all cases of Receiving Orders?
Α:
In most cases there is no property found.
27.
Q: Is annulment of a Receiving Order and restoration the same thing?
Α:
No. After the annulment of a Receiving Order, all consequences and impact against the
debtor/Bankrupt shall cease to apply, whilst in restoration the most persist.
28.
Q: How is a Receiving Order annulled?
Α:
There are two ways:
o According to Article 31 of the Bankruptcy Law, when all debts are settled or by the consent
of the debtor, by Order of the Court.
o According to Article 31A of the Bankruptcy Law, when five years have elapsed from the date
of the Receiving Order, and two years since the submission of the statement of affairs of the
property of the debtor / bankrupt, by Order of the Court the receiving Order is annulled.
29.
Q: How can a bankrupt be restored?
Α:
According to Article 27A of the Bankruptcy Law, 4 years after the issuance of the Bankruptcy Order, a
publication in the Gazette is made, and if there are no criminal or other offenses within 45 days a
recovery Verification certificate is issued by the Official Receiver.
30.
Q: After the bankrupts’ restoration, is the Receiving Order still in force?
Α:
Yes. Both the Receiving Order and the Trustee as well as the debts of the discharged bankrupt still
exist.
Bankruptcies and Liquidations Section
10
31.
Q: How can someone be informed if a Receiving Order has been issued against someone and if it still is
in force?
Α.
With application to the Bankruptcies and Liquidations of Companies Section and paying the amount of
€ 15, 00.
Members of the Cyprus Bar Association may obtain information via the website:
www.cyprusbarassociation.org/
32.
Q: How can I have more information or advice?
Α:
In Bankruptcy Law, Cap 5 or by Legal Advisor.
33.
Q: How can I get electronically the forms, applications, Proof of Debt forms, proxies, Statement of
Affairs and also be informed about the various procedures?
A: Through the website of the Cyprus Bar Association:
www.cyprusbarassociation.org/
Bankruptcies and Liquidations Section
11
LIQUIDATION ORDERS AND VOLUNTARY LIQUIDATIONS
QUESTIONS - ANSWERS
1.
Q:
Against who are Liquidation Orders issued?
Α:
Against legal entities, i.e.Companies.
2.
Q: What are the modes of Winding-up?
Α:
(a) By the Court.
(b) Voluntary
(c) subject to the supervision of the Court
3.
Q: What amount should be owed by the company so it can be filed against it a petition for issuance of a
Liquidation Order?
Α:
Debt of € 854,30 or more.
4.
Q: How is the Liquidation Order activated?
Α: Upon delivery by the applicant creditor to the Official Receiver of the Liquidation Order along with €
300,00 which is provided by the Regulations of Liquidations.
5.
Q:
With the issuance of the Liquidation Order does the applicant Creditor have any advantage?
Α:
No. Liquidation decree acts for the benefit of all creditors, not just the applicant creditor.
6.
Q: After the issuance of the Liquidation Order are the debts of the Company deleted?
Α:
No. The debts still exist and there is an obligation for their repayment.
7.
Q: Are the Liquidation Order and dissolution, the same thing?
Bankruptcies and Liquidations Section
12
Α:
8.
Q:
Α:
9.
Q:
No. Liquidation Order is issued after application by a creditor. Dissolution Order is issued after
application by the Liquidator when the process of liquidation is completed.
When a Liquidation Order is issued is the Official Receiver the
Liquidator of the Company?
No. The Official Receiver is provisional Liquidator of the company’s’ property. The Liquidator who may
be a person other than the Official Receiver is appointed by Order of the Court, usually following a
decision of the First Meeting of Creditors and Shareholders / contributories.
What are the duties of the Official Receiver?
Α:
 The receipt of the Liquidation Order along with the payment of € 300,00 for costs of enforcing
the Liquidation Order.
 Publishes the Liquidation Order.
 Sends letters to Banks, Land Register Offices, Income Tax, VAT etc.
 Receives statements from Company officials.
 Helps company officials to fill in the Statement of Affairs of the company’s’ property.
 Investigates the Company’s’ affairs and the reasons for failure.
 Conducts researches.
 Takes under his control of all property of the Company to deliver it to the Liquidator.
 Brings before the Court suspected offenses.
 Convenes the First Meeting of Creditors and Shareholders / contributories.
10.
Q: What are the duties of the Liquidator?
Α:
 The collection and preservation of the property of the Company.
 Conducts researches.
 Informs the official receiver for the progress of the Liquidation.
 The divestment of the company's property.
 The distribution of income to creditors.
Bankruptcies and Liquidations Section
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 To raise and defend legal proceedings relating to the property of the Company.
11.
Q: What are the obligations of the officers of the company in liquidation against the Official Receiver?
Α:
They should come at the offices of the Official Receiver for the submission of the Statement of Affairs
of the company’s’ property and give any information requested and deliver possession of the property
of the company to the Official Receiver.
12.
Q: If officers of the company in liquidation do not appear in the offices of the Official Receiver do they
have any impact?
Α:
The implications are very serious if there is disobedience in the Liquidation Order and is punishable by
imprisonment and fine.
13.
Q: When a Liquidation Order is issued, can the Company continue its operations?
Α:
No, only after a decision by the Liquidator.
14.
Q: When a Liquidation Order is issued what must the creditors of company in liquidation do?
Α:
They must submit to the Official Receiver or to the Liquidator, a Proof of Debt along with all the
evidence. The debt must necessarily precede the Liquidation Order.
15.
Q: What exactly is Debt Validation?
Α:
It is the proof of debt form company No. 1, which is made under oath before the Registrar of Court
and submitted with all documentation to the Official Receiver by the creditor or representative.
16.
Q: Why is a submission of the Proof of Debt needed?
Α:
 To give to the creditor the right to vote at the First Meeting of Creditors.
 To enable the creditor to receive dividend if property exists.
17.
Q: About debts that a Company has created after the issuance of the Liquidation Order, what should
the creditor do?
Bankruptcies and Liquidations Section
14
Α:
The creditor cannot submit a Proof of Debt, but can proceed to the Court with criminal proceedings
against the officials of the company in Liquidation.
18.
Q: When the debt is secured is a Proof of Debt submitted?
Α:
The creditor could submit a Proof of Debt but then the security is lost. If the debt is not fully secured a
Proof of Debt is submitted for the amount of the unsecured debt but stating the existence and the
difference between the Security and the debt.
19.
Q: After the issuance of the Liquidation Order, can the creditor register a mortgage or Memo?
Α:
No. Only a Proof of Debt can be registered.
20.
Q: When a creditor wants to register a lawsuit against the company in liquidation or when pending
lawsuits exist or other legal proceedings against the Company, should these litigations proceed?
Α:
No. These procedures should stop and become verified. If the creditor wishes to proceed judicially,
should primarily secure permission from the Court.
21.
Q: If the company in liquidation wishes to register a lawsuit against anyone, or pending lawsuits exist
or other legal proceedings on behalf of the company in liquidation, how these processes move?
Α:
Primarily, it should ensure the authorization of the Court.
22.
Q: If the company in liquidation wishes to promote or defend a lawsuit with a lawyer of its preference,
what should the company do?
Α:
The company must be authorized by the Official Receiver. In cases where the Company in liquidation
is the applicant, a bank guarantee must be deposited to the Official Receive, the amount of which will
depend on the scale of the action.
23.
Q: In what order is the dividend paid to creditors?
Α:
(a) Actual expenses and remuneration of the Liquidator
(b) Rights of Liquidator
(c) Expenses of the applicant creditor
(d) Priority debts such as government taxes, duties, etc.
(e) Note holders of floating charge
Bankruptcies and Liquidations Section
15
(f) Unsecured debts
24.
Q: When is the execution of the Liquidation Order completed?
Α:
With the realization of the property of the Company and when a final dividend is paid.
25.
Q: Is property found in all the cases of Liquidation Orders?
Α:
In most cases there is no property.
26.
Q: When is a Liquidation Order annulled?
Α:
By a Court Order, after all debts are settled.
27.
Q: When is the Company in Liquidation dissolved?
Α:
By Court Order, after a petition is filed by the Liquidator, when the company has no assets and the
Liquidator has completed his/her work.
28.
Q: How is a Voluntary Liquidation processed?
Α:
(a) By decision of the Shareholders
(b) By decision of the creditors
29.
Q: How can someone be informed if a Liquidation Order has been issued and if it still is in force?
Α:
With application to the Bankruptcies and Liquidations of Companies Section and paying the amount of
€ 15,00.
Members of the Cyprus Bar Association may obtain information via the website:
www.cyprusbarassociation.org/
30.
Q: How can I get more information or advice?
Α:
In the Companies Law Cap 113 or by legal advisor.
31.
Bankruptcies and Liquidations Section
16
Q: How can I get electronically the forms, applications, Proof of Debt forms, proxies, Statement of
Affairs and also be informed about the various procedures?
A: Through the website of the Cyprus Bar Association:
www.cyprusbarassociation.org
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Bankruptcies and Liquidations Section
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