DOWNLOAD Corporate Law LEGAL OVERVIEW Company Forms and Formation of Companies in Greece November 2020 www.piliosandpartners.com Company Forms and Formation of Companies in Greece This is a brief legal overview regarding For exactly these reasons, partnerships the existing company forms and the are only in exceptional cases of interest formation of companies in Greece, in- to foreign investors. Therefore we fo- cluding incorporation procedure and cus in the following on giving a few key costs required. data on capital companies. At this point it should be noted that the information on joint ventures, 1. Legal forms and general categoriza- which are also legally classified as a tion personal companies, due to their im- There is a numerus clausus of company portance especially in the construction forms, which means that founders of sector, is provided in a separate infor- companies must use one of these ex- mation sheet. isting company forms according to Greek law, additional ones cannot be created. 3. Capital companies Among the existing company forms, a There are existing three forms of capi- distinction is made between personal tal companies in Greek Corporate Law companies and capital companies. Societe Anonyme (Company Limited by shares) 2. Personal companies Private Capital Company (IKE) The most important personal compa- Limited Liability Company (EPE) nies for commercial purposes are the General Partnership (O.E.) and a. Societe Anonyme Limited Partnership (E.E.) The legal form of the Societe Anonyme In both company forms the partners (SA) is widespread in Greece and even are in the main focus. The manage- among smaller businesses a very com- ment is carried out by one or more of mon legal form. This can be explained the partners. They also represent the due to the increased reputation of this partnership vis-à-vis third parties. No legal form in the Greek market, but external managing director can be ap- also due to the fact that SAs have been pointed. Partners are personally liable given preferential on the allocation of for all of the partnership's obligations grants in the past. The SA has been the (with the exception of limited partners longest established form of legal entity in a limited partnership). extensively covering all corporate legal matters in relation to the operation of a company and is governed by the re- 2 cently fully revised Greek Law on Soci- b. Private Capital Company (IKE) etes Anonymes (4548/2018). The IKE form of legal entity was first The Greek Law for Societe Anonyme introduced in the Greek Market in 2012 was extensively reformed in 2018 and by the Greek Law 4072/2012 accom- made much more flexible. The new modating the needs of a more flexible law has been revised to adapt to the business company scheme with zero establishment and operational needs amount to be paid in establishment of the SA of the current business do- capital. Even though the law provides ing inter alia in relation to the use of for flexibility in the operation and cor- technology for GM an BOD meeting porate relations between members as well to intercompany relations and administration, the IKE form is not (rights and obligations of directors) governed is such detail as regards the thus creating a more investment total spectrum of business doing as friendly corporate vehicle. the SA and in addition to this there is less case law and theory literature of Key facts: this type of company than the SA. Capital Large corporations and company 25.000 € minimum capital re- groups continue to prefer setting up quirement the more established and “prestigious” form of entity of an SA than the Capital must be paid in newer one being IKE which is more Shareholders contribution in commonly used for medium and cash or in kind smaller size companies. Capital is divided into shares. Key facts: Shares are registered. Capital Nominal value of each share No minimum capital require- equal and not less than 0,04 € ment (1 €) nor more than 100 € Capital must be paid in One person (natural or legal) Cash, in kind or in guarantees can hold all the shares Corporate bodies Single-member IKE is possible Corporate bodies Board of Directors (at least 3 members or exceptionally one One or more General Directors person). (note: All directors General Meeting of Partners should be registered with the Greek Tax Authorities) Liability General Assembly of Share- The IKE is responsible for its holders debts with its assets Liability Partners are not personally li- able and their liability is limited The SA is responsible for its to the amount of their invest- debts with its assets ment Shareholders are not person- ally liable and their liability is limited to the amount of their investment 3 c. Limited Liability Company (EPE) Legal persons: Since 2012, when the more modern Certified copy of the and flexible legal entity of the IKE was Incorporation Deed including introduced, less and less EPE are the Articles of Association founded. In 2018, the percentage of Legalisation documents of the newly established EPEs was less than 2 founding entities including a percent of the total. The percentage resolution of the relevant of newly established IKE on the other corporate body regarding the hand was over 50 percent. formation of the company We no longer consider the formation of a EPE to be appropriate and, unless Notarial Power of Attorney in special circumstances exist, we advise case the notarial deed for the our mandates to establish either an IKE incorporation is not signed by or a SA. an already authorized legal Recommendation: representative of the founding entity The selection of the form of company should also take into consideration the In addition to the above, a lease respective corporate tax provisions as Agreement for the housing of the regards the capital increase of the registered seat as well as a pre– company, the profit accumulation, the registration of the trade name for the dividend distribution etc. and there- company under formation are also fore it is recommended that prior to required deciding a relevant tax advice should be obtained. The typical time required for the incor- poration is 2 to 5 working days. The founders receive a certificate with the 4. Establishment Commercial Registry and a Tax Regis- Establishing a capital company in tration Number of the new company. Greece is quick and easy, provided that all the required documents are avail- able, and the process is assigned and 5. Incorporation Fees and Costs completed by an One-Stop-Service. Notary fees of approximately The One-Stop-Service for SA is a no- 1.000 € depending on the com- tary public and for IKE either the Gen- pany‘s starting capital eral Commercial Registry or a notary Various company registration public. fees of aprox. 100 € The following documents are required Our legal fees for the incorpo- to proceed with the incorporation de- ration on request (a fixed fee pending on whether the founder is a can be agreed) natural or a legal person: Natural Person: ID or Passport 6. Our services (for the incorporation) For Non-EU country citizens Drafting the Articles of Associ- further documents (Visa, ation according to clients’ resident permit etc.) needs in Greek and English Drafting the Power of Attorney in Greek and English 4 Review of all the required sup- Additional legal advice (e.g. executives porting documents of the employment agreements, sharehold- founders. ers/ partners arrangements/ agree- ments, regulatory matters, corporate Coordination of the process governance) are not included in the with the notary public and the fixed fee and an hourly rate is charged. Commercial Registry Trade name pre registration 5.