- 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
- An application is made to the Cyprus Registrar of Companies for approval of the name (before any applications for its registration)
- 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:
- Name of the partnership and business activity
- Details of Partners
- Start date and termination date
- Declaration that the partnership is a limited partnership
- Details of share distribution and capital paid
- 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
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