On the 7th of May, 2015 a new legislation was published in the Official Gazette of the Republic of Cyprus, that of Insolvency Consultants Law of 2015 (64(I)/2015 (the “Law”).
This has been the result of the Memorandum signed between the Republic of Cyprus, International Monetary Fund, European Commissioner and European Central Bank regarding a reformation which introduces well-regulated legislative framework for the insolvency of legal and natural persons, including the regulation of the profession and licensing of the Insolvency Consultant and/or Practitioner.
This new legislation outlines the criteria for qualification, regulation and monitoring of persons that have the role of insolvency consultant.
Due to this new Law, the liquidator which is now named Insolvency Consultant, has to be authorised by the Relevant Authority (as defined below) to act as such. Article 14 of the Law sets out the said criteria for obtaining such license:
- The candidate must be a member of the Relevant Authority (as defined below) which grants the license which does not include the Official Receiver.
- Is the holder of a Bachelor Degree or equivalent qualification.
- Has minimum 3 years of professional experience (preceding the application) as: Lawyer, Legal Advisor, Chartered Accountant, Auditor, Actuary, Officer or Examiner of the Official Receiver and/or equivalent experience in the financial sector.
- Has relevant professional experience in matters of insolvency (which precedes the application form) of 2 years or of 600 hours of work within the period of 2 years or has experience in 10 cases out of which the half does not include voluntary liquidations within the period of 2 years. Important note here is that the person has to be able to prove such experience.
- Has been successful in the exams of professional competence which have been organised and recognised for the purpose of the Law.
- Has a valid professional indemnity insurance which meets the minimum requirements in accordance to the relevant Regulations in accordance to section 22 of the Law.
The exams as mentioned above shall ensure the level of the required theoretical knowledge that is related with the procedure of insolvency and the ability of the candidate to apply them in practice. The exams will cover such topics as will be decided by Regulations in accordance to section 22 of the Law.
The person to whom the license of the Insolvency Consultant is granted, has to attend to seminars of continued education for the necessary knowledge, professional skills and high level. There will be sanctions in accordance to Article 22 of the Law for the person who fails to attend to such seminars.
For the purposes of the Law, Relevant Authority means (i) the Official Receiver (the Registrar) AND (ii) the Recognised Professional Body in accordance to section 4 of the Law (such as Cyprus Bar Association and the relevant body of the accountants as per section 6 of the Auditors and Obligatory Audit of Annual and Consolidated Accounts Law (as amended) OR the professional body which received approval by submitting a relevant application to the Registrar.
On the 22nd of May 2015 the Minister of Commerce, Industry and Tourism issued an order which waives the provisions regarding the experience and success in an examination of professional competence and in particular the above requirements from 3–5 (inclusive) until the 2nd of October, 2015, provided that the person to whom the temporary license was granted during the transitional period complies with the following requirements:
- Has at least 8 (eight) years of experience as a Lawyer, Legal Advisor, Chartered Accountant, Actuary, Officer or examiner of the Official Receiver and/or professional of the financial sector.
- Has acquired proven experience in matters of insolvency (which precede the date of the application) for 5 years or for 1800 hours within the period of 5 years or has worked and has experience in 20 cases out of which the half do not concern voluntary liquidation within 5 years.
- Has completed an approved training seminar of 40 hours duration and pass relevant exams within 5 (five) months after receiving the said license and submit the relevant certificate. Has completed an approved training seminar of 40 hours duration and pass relevant exams within 5 months after receiving the said license and submit the relevant certificate.
The content of this article is intended to provide a general guide to the subject matter. Our experts at Eltoma Corporate Services are able to help you liquidate your company. Please contact us to obtain a professional advice and quotation based on your specific circumstances.