The 2015 Companies Act introduced the process of Examinership. Under the legislation, once an Examiner is appointed to a Company, the Company is under the protection of the Court whilst the Examiner (i.ee the individual who “examines” the Company) formulates a Scheme of Arrangement with the Company’s Creditors.
Is your Company suitable for Examineship?
The detailed procedures for placing a company into Examinership and the subsequent steps are outlined below. In summary, in order for a company to be suitable for Examinership, the Court has to be satisfied that the company, and the whole or any part of its undertaking, would have a reasonable prospect of survival. In essence, there pust be a business that is either viable, or can be made viable. The process itself begins with a petition presented to the Court via Insolvency Service of Cyprus.
Who May Present A Petition
A Petition for the appointment of an a Examiner may be presented by:
- The company; or
- The directors of the company; or
- A creditor, including a contingent or prospective creditor (including an employee), of the company; or
- Shareholders holding not less than one-tenth of shares carrying the power to vote at general meetings as the time of presentation of the Petition.
The Examiner haw the following powers:
- The Examiner has the same rights and powers which an auditor has in relation to the supplying of information and co-operation;
- The Examiner has the power to convene, setagenda for, and preside at meetings of the board of directors and general meetings and to propose motions or resolutions.
- The examiner is entitled to reasonable notice of, to attend and be heard at all meetings of the board of directors and all general meetings.
The Act provides that the Examiner may certify liabilities of the company incurred during the protection period. Liabilities so certified are treated as expenses properly incurred under the Act.
Unlike liquidations or receivership, the directors remain responsible for the day-to-day management of the company. The principal task of the Examiner is to “examine” the company’s affairs and formulate a compromise or scheme of arrangement.
In practice, the Examiner will work closely with the directors to re-assure creditors, employees and staff.
What happens if an Examinership is not successful?
If the Examinership is not successful, then the Company will be placed into liquidation. Un such an even, it is possible that the company’s bankers may appoint a Receiver.
How can we Help
We can provide the following services:
- Advise on the suitability of Examinership.
- Act as the Examiner.
For further information please contactus at firstname.lastname@example.org or 22-264455.
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