Joint holders, nominees and trusts in a Cyprus register of members

Most Cyprus company files have at least one shareholding that is not simply "Mr A holds 100 shares": two people together, a nominee for someone who prefers not to appear, or a trust. This is where record-keeping goes wrong, and it is also where the accepted rules in Ekvi's rule book say least. The article therefore sets out what is settled, what Ekvi records, and what you should put to your adviser.

What is settled

Every entry has the s.105 particulars. Section 105(1) lists the name and address of each member, the shares held and amount paid, the date the person was entered and the date they ceased to be a member. Whoever is entered as a member needs an entry with those particulars.

A company cannot be a member of its holding company. A body corporate cannot be a member of a company which is its holding company, and an allotment or transfer of shares to the company's own subsidiary is void (s.28(1)). Ekvi refuses to record a holder that is the company itself or its subsidiary.

The register shows shares, not instruments. Options, SAFEs, ASAs and convertible notes are not shares before conversion and are not entered, whoever holds them.

The beneficial owner is a separate question. The beneficial-owner register asks for a natural person who directly or indirectly owns or controls more than 25 per cent of the shares, of the voting rights or of the ownership interest. The holding is measured on issued shares and voting rights, so options and convertibles do not count. The first filing is due within 90 days of registration, a change within 45 days of the company learning of it, and an annual confirmation falls between 1 October and 31 December.

The 50-member limit of a private company (s.29(1)(b)) excludes present employees who are members and former employees who became members while employed and stayed members. It is counted on members, which is why the way a joint holding is counted matters (see the guide on the 50-member limit).

What Ekvi records

• A joint holding is a holder of its own, with at least two persons named behind it. It is one line of the register against the one holding, with all the holders named.
• A nominee or trustee is entered as the holder with its own name, address and, for a company, its registration number. The register lists the holder as entered. Who stands behind a nominee is not one of the s.105 particulars.
• An entity as holder. A holder that is a legal entity can have the owners behind it recorded with their percentages ("ownership declared"), which Ekvi follows through the chain to the natural persons when it assesses beneficial owners, and flags where the information is missing.
• Options held by someone else's nominee sit in the plan or instrument records, not in the register.

A worked example

A founder, Maria, wants 200 shares held by an administrator, X Nominees Ltd, for her. The register shows X Nominees Ltd: its name, address, 200 shares, the amount paid, the date entered. Nothing in that entry says Maria. Separately, the beneficial-owner filing has to name the natural person; how that person is determined where a nominee is involved should be confirmed with the company's adviser, because it is not settled in the rules Ekvi has accepted.

If X Nominees Ltd later transfers the shares, the transfer is registered, HE57 follows within 14 days of that entry, and the beneficial-owner details are updated within 45 days of the company knowing.

What to ask your adviser

• Whether the company's articles let it acknowledge a trust in writing without entering it on the register.
• How joint holders vote, receive notices and transmit shares on death.
• Whose details the beneficial-owner filing needs where a nominee, a company or a trust stands in the chain.

Summary

Record the member as the member, completely. Keep the instruments outside the register. Treat the beneficial owner as a separate record. Put the open points to a Cyprus corporate secretary.

Ekvi is a record-keeping tool and does not provide legal or tax advice.