Cyprus Limited Liability Partnership ("LLP")

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Cyprus Limited liability partnerships (Cyprus LLP) with a share capital, are popular for investment purposes and can be incorporated in Cyprus.  The Cyprus LLP a partnership structure similar to other jurisdictions such as in Poland (SKA) and Luxembourg (SCSp). Cyprus LLPs are often used for investment and commercial transactions involving Polish Closed End Funds (FIZ), which are subject to Polish Corporate Income Tax.

Overview

General Partnership:

  • All partners are liable jointly and severally for an unlimited amount of the debts and obligations of the partnership.
  • Upon becoming a partner into an existing partnership/firm a person becomes liable to it’s creditors from the date of appointment
  • Upon retirement, a partner remains liable for partnership debts and obligations incurred uo tp the date of retirement

Limited [Liability] Partnership (LLP)

  • At least one partner must have unlimited liability for the partnership obligations
  • Remaining partners may have limited liability
  • Partnership is divided by shares.  An LLP partner contributes to the share capital and shares are allotted to him depending on the amount contributed.
  • Liability of the limited partners is limited up to the amount that remains unpaid. Limited Partners shall enjoy limited liability in the same manner as shareholders in a limited company.

Conditions for the Existence of a Partnership

  • The partnership must carry out a business for the purpose of obtaining profit
  • The minimum number of partners (corporate entities or natural persons) is 2.  The maximum number is 100, unless the partnership undertakes banking activities in which case the maximum is 10
  • Partnerships are not legal entities
  • A Partnership Agreement is required and shall govern partnership relations, including; interests of the partners; property; entitlement to capital and profits; contributions towards losses; participation in the management of the partnership, and; duration of the partnership

Registration Procedure

  1. An application is made to the Cyprus Registrar of Companies for approval of the name (before any applications for its registration)
  2. Within a month of its establishment a written statement in a prescribed form is submitted to the Registrar signed by all the partners containing the following information:
    1. Name of the partnership and business activity
    2. Details of Partners
    3. Start date and termination date
    4. Declaration that the partnership is a limited partnership
    5. Details of share distribution and capital paid
    6. Names of the General Partner/s

After registration, changes to the partnership must be notified to the Registrar within 7 days. If the partnership ceases to operate the Registrar must be notified within 28 days.

Taxation and Financial Reporting

  • Accounts must be kept
  • Annual audit (financial statements) submitted at the end of each financial year where the partnership taxable income exceeds 70,000 euro
  • Limited Partnerships are NOT subject to Cyprus tax, however the partners must account for own taxation liabilities accordingly