Private Company (P.C.): the most flexible business entity in Greece

In the recent years, there has been a great development of Private Companies (Ιδιωτική Κεφαλαιουχική Εταιρεία «ΙΚΕ»), also known as “companies of one euro”. These companies were introduced by virtue of Greek law n. 4072/2012 as amended by law n. 4155/2013 and make Doing Business in Greece” easier and more effortless.

Due to the minimum cost required for their establishment and simplified operation, they are designed to meet needs of SMEs by establishing a more flexible and simple corporate type of company.

The main features of the IKE company that make it a popular choice for those who wish to establish a company in Greece are the following:

 

How many people are needed to establish a private company (PC)?
A private company is established by one or more natural or legal persons (founders). However, the company can be established by only 1 (one) natural or legal person (Single Member PC). In this case the name of the single partner shall be submitted for publication in the General Electronic Commercial Register (GEMI). The members of the PC must have completed 18 years of age.
What are the main features of a PC?
A PC is a capital company with a legal personality and it has a commercial nature even if it is not established for commercial purposes. Only the company shall be liable for its obligations with its assets with the exception of the liability primarily assumed by the partner who participates with a guarantee contribution . The capital of a PC is determined by the partner(s) without restrictions. The capital contribution can be zero. However, it is possible for partners to participate and acquire shares by using different kinds of contributions: non-capital (Art. 78) and guarantee contributions (Art. 79) whose value cannot exceed 75% of the amount of the liability assumed by the partner towards the company’s creditors.

Other main features:

  • The company’s specified period of duration (12 years, although failure to indicate its duration shall not constitute grounds for annulment of the company).
  • The establishment of the company shall be submitted for publication either in the website or GEMI,
  • The company shall be established and amended by virtue of a private document which shall be submitted for examination by the authorities of GEMI (i.e. no notarial deed is required).
What is the liability of partners?
Partners are liable up to the amount of the capital invested. The company itself and not the partners shall be liable with its assets. The only exception is the partner who participates with a guarantee contribution, who shall assume liability for any company debts towards third parties, if so required by those parties, up to the amount of his or her contribution.

Whom should you contact in order to establish a PC?

You can contact with us in order to inform you, guide you and take care of all the incorporation procedures in order to establish a new PC company in Greece.

What is a one-stop shop?

The authorities of GEMI operating in Chambers, and Citizens’ Service Centers (KEP) which have been certified to act as one-stop shops and are responsible for establishment of new companies.

We also provide a One Stop Tax and Business Solution for establishing a Private Company in Greece  and we facilitate you in every step on your way of the Incorporation Procedures.

 

What capital is needed?

One of the main advantages of the IKE during these times of financial crisis and inability to locate sources of funding, is that the only capital needed for the establishment of the company is the sum amount of one (1) euro.  However,  we believe that the new company must need capital for a least a year’s expenses.

 

Where can the company seat be located?

IKE is headquartered at the place referred to in its. Ιt is possible for the IKE to have its seat of administration in Greece and develop its financial activity (real seat) in another country.

 

Who can be an administrator of the company?

IKE’s administrator can only be a natural person who does not necessarily have to be a partner of the company.

What are the necessary contributions from the partners?

The contributions of the partners of IKE can be of three kinds: (a) capital contributions in cash or goods, (b) non-capital contributions which are services that are to rendered. These services must be specified in the Statute and executed for a definite or indefinite period. The value of the contributions undertaken either at the moment of the establishment of the company or at a later moment are also specified in the Statute, (c) guarantee contributions, which consist in undertaking liability against the company creditors for the company debts, up to the amount which is specified in the Statute. The value of any guarantee contribution should be specified in the Statute and cannot extend beyond 75% of the liability undertaken by the partners against creditors of the company.

The diversity of how contributions are paid is one of the main innovations of IKE and introduces an exception to the present obligation that exists with other corporate forms of Greek companies where contributions can only be made in cash and in assets.

See also the How to set up a Greek Private Company in Greece”

 

Giorgos Kalfas

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