The main objective of appointing a receiver in a Cyprus company is to recover the debt of a secured creditor of the Cyprus company. The appointment of a receiver does not bring the existence of the company to an end in the same way that liquidation does.
Typically, an instrument creating a charge affords a creditor with the right to appoint a receiver on default of the Cyprus company’s repayment obligations to the creditor.
Where the charge is a floating charge over the assets of the Cyprus company, the creditor can appoint a receiver / manager over the assets on which the floating charge crystallises at the time of default.
During the period in which a receiver is appointed, the directors’ inherent powers of management over the charged assets cease and the receiver is vested with powers to manage the charged assets. Within seven days of the appointment of a receiver, the appointer must notify the Registrar of Companies.
A receiver controls the assets over which they have been appointed, for the duration of their appointment. If the appointment lasts for more than a year, the receiver must comply with certain compliance requirements, including the submission of annual accounts of receipts and payments to all parties concerned at each anniversary.
Contact us at corporate@amc.law for any further information.