Reorganisation of Companies in Greece
The need to transform a company often arises for various reasons. For example, a change of legal form may be advisable for tax reasons, or in the case of the takeover of a company that is to be integrated into another existing one, the necessity of a merger may arise. Furthermore, a new company may emerge from the combination of several companies. The spin-off (division) of a branch of a company may be necessary for various reasons, for example, to operate a new business line independently as a “spin-off,” or to sell or otherwise contribute this part of the company. The options and instruments provided by transformation law are diverse.
Unfortunately, transformation law in Greece is not uniform, as is the case in Germany, for example, where it is codified in a single transformation law. Therefore, individual regulations and provisions are found in various laws, particularly the Greek Limited Liability Companies Act (GmbHG) and the Stock Corporation Act (AktG), with further regulations found in other laws. Some transformations are not explicitly regulated in Greek law, but are nevertheless permissible. Under Greek law, the transformation of a legal entity can occur through a change of legal form, merger, and division (splitting and splitting up).
All “true” transformations have in common that the company’s business activity and productivity are continued in the form of a new economic entity, and existing liabilities are transferred to the new entity. This is particularly important for the rights of existing creditors and employees, but also for the partners and shareholders.
In the aforementioned cases, we speak of a “true” conversion. In contrast, there is also an “abusive conversion,” which occurs, for example, through the dissolution and liquidation of the existing companies and the subsequent transfer of the assets to a newly established company. This distinction can have serious legal and tax consequences.
In connection with the merger or combination of companies, competition law issues may also arise, which is why there is an obligation to register and report.
Law 2578/98 on the taxation of cross-border transfers of ownership of companies and shareholdings transposed EC Merger Directive 90/434 EEC into Greek national law.
