Merger, split, change of legal form

The merger, division and change of legal form of companies in Greece have, since 2019, been governed by the unified Law 4601/2019 on company transformations, which replaced the rules previously scattered across the Stock Corporation Act, the GmbH Act and several individual statutes. The law covers all three types of transformation – merger, division and transformation (change of legal form) – and now, in principle, also permits them between companies of different legal forms.

1. Merger of Capital Companies

In a merger, a company transfers its entire assets either to an already existing company (merger by absorption) or, together with one or more other companies, to a newly formed company (merger by formation of a new company, Art. 6 et seq. of Law 4601/2019).

A draft merger agreement (Art. 7 of Law 4601/2019) is first required, which must contain, among other things:

• the legal form, company name and registered seat of the participating companies, together with their companies-register (ΓΕΜΗ) numbers,
• the exchange ratio of the shares and any cash payment,
• the date from which the new shares carry an entitlement to profits,
• the merger reference date, from which the acts of the transferring company are deemed to have been carried out for the account of the acquiring company,
• rights granted to individual holders of shares or special rights,
• special advantages for members of the corporate bodies or auditors of the participating companies.

The merger agreement must be published under Art. 8 of Law 4601/2019; the management bodies of the participating companies must, in addition, prepare a detailed written report explaining the agreement from an economic and legal perspective and, in particular, commenting on the adequacy of the exchange ratio (Art. 9 of Law 4601/2019); for smaller companies, or with the consent of all shareholders, review by independent experts may be waived. To protect creditors, the law provides that creditors whose claims – not yet due – arose before completion of the publicity formalities may, within 30 days of their completion, demand adequate security, provided the economic situation of the participating companies makes such security necessary as a result of the merger.

The merger resolution generally requires an increased majority of the general meeting or shareholders’ meeting of each participating company. Additional special provisions apply to mergers involving a GmbH (EPE) or an IKE (including Chapters F and G of Law 4601/2019). The merger takes effect upon registration with the General Commercial Register (ΓΕΜΗ); separate approval by a prefecture or the Ministry of Commerce, as previously required, is no longer necessary.

2. Division of Capital Companies

Division – today possible for all company forms covered, no longer only for stock corporations – is governed by Art. 58 et seq. of Law 4601/2019 and may take place by way of absorption, formation of a new company, or a combination of both:

• In a division by absorption, the divided company transfers its entire assets, upon dissolution without liquidation, to several already existing companies.
• In a division by formation of a new company, the transfer is made to companies formed simultaneously for that purpose.
• Also possible is the split-off of an individual part of the business (partial division, or hive-off of a business branch), in which the divided company continues to exist.

A written division agreement must likewise be prepared for a division (Art. 59 of Law 4601/2019) and published (Art. 60 of Law 4601/2019); the management bodies must prepare a detailed report (Art. 61 of Law 4601/2019), the agreement must, where applicable, be reviewed by experts (Art. 62 of Law 4601/2019), and employee and creditor rights must be safeguarded accordingly (Art. 64–65 of Law 4601/2019) – the principles essentially correspond to those applicable to mergers.

3. Company Transformation by Change of Legal Form

A change of legal form – for example from a GmbH (EPE) to a stock corporation (AE), from an IKE to an EPE, or from a partnership (OHG/KG) to a capital company – is today likewise uniformly governed by Art. 104 et seq. of Law 4601/2019. The formation requirements of the new legal form apply, in principle, correspondingly to the change of legal form (Art. 105 of Law 4601/2019); here too, the management bodies must prepare a detailed written report on the intended change of legal form (Art. 106 of Law 4601/2019), which must be made available for inspection by the shareholders or shareholders’ meeting (Art. 107 of Law 4601/2019).

The resolution on the change of legal form generally requires an increased majority of the shareholders’ meeting or general meeting and must be notarially certified where the new legal form requires notarial articles of association (e.g. in the case of the AE). This is generally preceded by a valuation of the assets and liabilities of the company changing its legal form. Partners with unlimited personal liability in an OHG or KG that changes its legal form into a capital company generally remain liable for liabilities incurred before the change of legal form until completion of the statutory publicity requirements.

The change of legal form likewise takes effect only upon registration with the General Commercial Register (ΓΕΜΗ).

Tax Treatment

For the tax treatment of mergers, divisions and changes of legal form, the new, unified system of tax incentives under Law 5162/2024 has applied since 5 December 2024 (see, in more detail on this, the article on Tax Advantages on the Transformation of Companies).