Frequently Asked Questions on Cyprus Companies - What are the consequences of a limited liability company?

Incorporating a company not only has tax benefits but there are more advantages in general in respect of the notion of ‘limited liability’.  A company is regarded as a legal person separate from its members able to own property under its own name, be a party in a contract, sell shares and more.  As a consequence, the liability of its members is limited according to their original contribution and this is also enshrined in paragraph 4 of our Memorandum of Association which states that the ‘liability of the members is limited’.  This means that upon winding up of the company, Shareholders cannot lose more than what they have originally invested in the company.  Only the company itself is responsible for its debts.  All that the company may request from Shareholders is that their shares be paid in full.