By the current Law 4072/2012, a new corporate form has been introduced into Greek legislation, namely the private company (idiotiki kefaleouchi etairia – I.K.E.). The purpose of this new corporate form is to enable commercial activity in a form that provides both limited liability of the members and a simplified and flexible formation procedure.
The basic features of this new corporate form, which in other countries is known as a “Private Company” (P.C.), essentially correspond to the features of the Greek corporations GmbH (EPE) and AG (AE). For the formation of the private company, a minimum capital of only one euro (€1) is required. The background is that the members can make capital contributions, non‑capital contributions or contributions in the form of guarantees/sureties. Capital contributions are the otherwise “usual” forms of contribution known from a GmbH and AG in cash or in kind, which are directly attributed in value to the company’s share capital.
The law also provides for the formation of a single‑member I.K.E., whereby either one of the members or a third party may be appointed as managing director.
Forms of contributions in the private company IKE
Non‑capital contributions are performances that cannot be directly valued, such as obligations to perform, to carry out work or to render services, etc. Although these contributions are predominantly encountered in practice in partnerships, they do not change the corporate nature of the I.K.E., even if its share capital should consist exclusively of them.
A special form of contribution found in the I.K.E. is the provision of guarantees/sureties. This involves assuming liability vis‑à‑vis third parties for the company’s obligations (surety), namely up to the amount provided for in the articles. The member who is liable in this way declares bindingly that they are able and will exhaust every effort to ensure that they will at any time in the future be able to pay the company’s liabilities up to the aforesaid fixed amount. In this way, the formation of a company is made possible without the contribution of share capital but by valuing future profits.
Formation and taxation of the private company IKE
For the formation of the I.K.E., a notarial form of the articles is not required unless desired by the members or assets are contributed for which the transfer of rights requires a notarial form (real estate as a contribution). The formation procedure is relatively simple and rapid in accordance with the provisions of Law 3853/2010 (formation of a company in the one‑stop shop procedure). In practice, the duration of the formation procedure should be approximately 3–4 days, provided all necessary documents have been collated.
With regard to annual financial statements, the law refers to the provisions of the law on Greek public limited companies. The financial statements essentially include the balance sheet, the profit and loss account, the appropriation of profits statement and the appendix. Publication of the annual financial statements takes place within three months after the end of the first financial year at the competent authority (GEMI).
For tax purposes, the private company is treated like a Greek GmbH. The law provides that the statutory provisions on Greek GmbHs apply mutatis mutandis to private companies.
(Status: May 2012. All information without guarantee.)