Forced sale orders on the grounds of unfair prejudice and shareholder oppression

Introduction In leading case O’Neill v Phillips, Lord Hoffmann compared shareholder petitions of unfair prejudice to divorce petitions. Indeed, these shareholder disputes tend to carry the same level of acrimony, especially when courts are faced with the option of deciding the sale of one shareholder’s shares to another. Fairness is at the heart of the…

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Requisition of an extraordinary general meeting

Shareholders of a Cyprus company have the right to request that the directors convene an extraordinary general meeting (EGM), and the directors are legally obliged to do so within a specified time. The procedure, known as the requisition of an EGM, is governed by Section 126 of the Companies Law Cap 113. Requesting an EGM…

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Structuring an exit from investment

Shareholders’ excitement over a new joint venture can be overshadowed when issues concerning the available options for exit from the investment arise for discussion. It is prudent for shareholders to address the full spectrum of their investment as early as possible, including the start-up stage and the operation of and exit from the investment. Company…

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New financial reporting provisions introduced

Introduction On September 23 2016 Law 97(I)/2016 – the third amendment to the Companies Law (Cap 113) – took effect. Law 97(I)/2016 substantially amends the information which must be included in a company’s financial statement reports. The director’s report has effectively been replaced by a broader management report, which aligns with the increased transparency required…

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Derivative actions – protection of minority shareholder rights revisited

Introduction There are many reasons why Cyprus courts refrain from interfering in the internal affairs of limited liability companies. At the core of the courts’ approach lies the commercial reality that these matters are better understood and applied by a company’s governing bodies (ie, its board of directors and shareholders) at the general meeting. However,…

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