For sole traders and small businesses, a registered business name is often the simplest way to trade in Cyprus under a brand of their own. Understanding how it works, and what the law requires, is the first step to using it to your advantage.
What is a business name?
A business name (also called a trade name) is a name you trade under other than your own legal name. It is governed by the General and Limited Partnership and Business Names Law, Cap. 116, and registered with the Registrar of Companies.
Why trade under a business name?
For sole traders, a registered business name combines a professional brand with the simplicity of self-employment:
- Your own brand. Trade, invoice and advertise under a distinctive name rather than your personal name. You can even run more than one brand, each under its own registered name.
- Quick and inexpensive to set up. Registration is far simpler than incorporating a company: no share capital, no constitutional documents, no directors or company secretary.
- Lighter ongoing compliance. There is no annual return to file with the Registrar, and audited accounts are required only above a turnover threshold.
- Personal tax treatment. Profits are taxed as the owner’s personal income, and the first €22,000 of taxable income each year is tax-free. VAT registration becomes mandatory only once taxable turnover exceeds €15,600 over the previous 12 months, or is expected to exceed that amount within the next 30 days.
- Credibility and enforceability. A registered name appears on the public register, so clients and suppliers can see who stands behind it. A properly registered name also keeps your contracts enforceable in court.
- Easy to wind down. If you stop trading, you notify the Registrar and the name is struck off. There is no liquidation process.
Do I need to register?
If you have a place of business in Cyprus, registration is mandatory in two cases:
- you are a sole trader using anything other than your surname (with or without your first names or initials);
- you are a company trading under anything other than your registered name.
The deadline is one month from the day you start trading under the name.
How is a business name registered?
Registration involves two stages: approval of the name by the Registrar, and then an application to register it. Each step has its own requirements, and non-EU citizens face additional conditions.
Will my name be accepted?
The Registrar can refuse a name for several reasons:
- it is too close to an existing name or a registered trade mark;
- it is misleading or purely generic;
- it uses certain restricted words. Some words also require regulatory consent.
A search of the Registrar’s online register is a useful first step, but it will not reveal registered trade marks or another business’s established reputation. More importantly, a name the Registrar accepts can still infringe someone else’s rights. A proper clearance check before you invest in signage, a website and marketing is far cheaper than a forced rebrand.
Business name, company or trade mark?
These are often confused, and choosing the wrong one can be expensive:
- A business name lets you trade under a brand quickly and at low cost. It is not a separate legal entity: the owner answers in full for the business’s debts, which for a sole trader means unlimited personal liability. It also gives no exclusive rights to the name.
- A limited company is a separate legal entity that can shield your personal assets, in exchange for more formalities, annual filings and corporate taxation. If you are going into business with others, a business name is not an option: you will need a partnership or a company.
- A trade mark gives you exclusive rights to your name or logo and the means to stop others using it. Without one, stopping a copycat usually means proving an established reputation in a passing-off claim, which is much harder.
Key legal considerations
- Trading unregistered. While a business name is unregistered, or a change has not been reported on time, you cannot enforce your rights under the business’s contracts in court. In practice, you may be unable to sue a client over an unpaid invoice unless the court grants relief, which is discretionary and normally at your own expense. Your clients, meanwhile, can still sue you, and fines, including daily fines, also apply.
- Ongoing obligations. Changes must be reported within deadlines as short as seven days, certain details must appear on your business documents, and the Registrar can strike off names that fall out of compliance.
- Buying or selling a business. A business name cannot be transferred, which needs to be addressed in any sale.
Planning to trade under a new name in Cyprus? Safeguard your rights from the outset.
