Cyprus inaugurates the Limited Liability Shipping Company (LLSC)
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New legislation has been passed in Cyprus, providing for the opportunity for ship-owners to establish a Limited Liability Shipping Company (LLSC).
The Law on the Limited Liability Shipping Company (LLSC) Law of 2022 was adopted by the Cyprus Parliament on 7 October 2022. Primarily, it establishes a new type of corporate entity, described as a ‘Limited Liability Shipping Company’ (LLSC), which operates as a limited liability company with the sole purpose of owning and operating Cypriot vessels. The Limited Liability Shipping Company Law regulates issues relating to LLSCs, from their establishment to their liquidation, and establishes the institution of the Registrar of LLSC’s as the competent authority to deal with these matters. In addition, it regulates the creation of a one-stop-shop framework for ship-owning companies and their shareholders to deal with all matters currently handled by the Registrar of Companies. The ultimate objective is to create a coherent and efficient framework for ship-owning companies and their shareholders within the Deputy Ministry of Shipping so that it can facilitate all matters which currently fall within the competence of the Registrar of Companies.
The main provisions of the new law
The new law includes the following main provisions:
Provisions which regulate the establishment of the institution of the Registrar of LLSCs, as the competent authority for the registration of LLSCs and for any other matters which relate to corporate law and relate to them, in a manner which is commensurate to the current practices of the Registrar of Companies, with the purpose of promoting a one-stop-shop service.
Provisions which regulate the establishment and maintenance of the Register of LLSCs by the Registrar of LLSCs.
Provisions which regulate the incorporation of an LLSC, its share capital, its management, encumbrances as well as the transfer to the Register of LLSCs of companies which are currently registered in the companies register maintained by the Registrar of Companies.
Provisions that confer to the Registrar of LLSCs the power to approve the use of electronic signatures in relation to documents that are required to be submitted to the Registrar of LLSCs or which are issued by the Registrar of LLSCs.
Provisions which confer to the Registrar of LLSCs the power to impose an administrative fine in the event of violation of specific provisions of the law and a process of the administrative challenge of such decisions.
The new legislation is modeled on the core provisions of the Cyprus Companies Law so that there are safeguards concerning its alignment with European company law. At the same time, it contains simpler provisions (compared to the equivalent provisions of the Cyprus Companies Law in a number of aspects, such as the incorporation of the LLSC, the amendment of its memorandum of association, the reduction of its capital and other areas, so that the legal framework is more attractive for the purpose of registration of shipping companies in Cyprus.
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