The Private Company (IKE) is a company with legal personality and limited liability.
Through the recent years since the new law 4072/2012 first introduced the legal type of Private Companies, it had a huge success in terms of illuminating the complexities of setting up a limited capital company in Greece. Since then, thousands Private Companies has been incorporated
GENERAL INFORMATION AND STRUCTURE
A Private Company may be incorporated by several persons (called “members” or “partners”) or by a single person. The members may be either natural or legal persons.
There is no minimum share capital requirement. The members may participate in the company either by capital contributions, non- capital contributions or guarantee contributions. The company is
According to the provisions of the Law, the Articles and any amendments thereto, to the extent that they constitute private documents, as well as any resolutions and minutes of the partners’ meetings, may be drafted also in one of the official languages of the EU. In the relations of the company and its partners with third parties however, the Greek text shall prevail.
The Private company is established for a specific duration, which, unless otherwise determined by the Articles, is 12 years, and may be extended by resolution of the members.
The registered office of the company is determined in its Articles, and the effective management may be abroad. Furthermore, the Private company may transfer its registered office to any other member state of the European Economic Area.
Finally, within a month from its incorporation, the Private company must create a website, featuring certain information prescribed by law.
MANAGEMENT BODIES (DIRECTORS AND GENERAL MEETING)
The members may appoint one or more managers (always natural persons), and in case more than one are appointed, the managers act collectively, unless otherwise determined by the Articles.
The managers represent the company and perform in its name any actions concerning its management, the administration of its assets and generally the pursuit of its objects.
The managers have an obligation of loyalty towards the company and are liable towards the latter in case of breach of the Law, the Articles and the decisions of the members, as well as for failures in the management of the company.
The General meeting (member’s meeting) of the Private company have the authority to resolve on any corporate matter, and further have the exclusive competence to resolve on certain subjects enumerated in the Law.
Meetings may be held at any place provided in the Articles, whether in Greece or abroad, and the articles may provide that the meetings may be held through teleconference.
CAPITAL, CONTRIBUTIONS AND SHARES
There is no minimum requirement in relation to the share capital of the PC.
The contributions of the members may be of 3 kinds:
– Capital contributions, in cash or in kind or
– Non- capital contributions, being assets which are not subject to evaluation (such as the obligation to provide services, for example), and the value of which is defined in the Articles or
– Guarantee contributions, being the undertaking by a partner of a liability against third persons for the obligations of the company, up to an amount determined in the Articles.
The nominal value of each share is at least 1 euro, and must be the same for all corporate shares, regardless of the type of contribution. A share is a form of participation and not a security. The company may issue a document to each member for the share that the said person holds, but such documents are not securities.
Unless otherwise provided in the Articles, there is no restriction to the transfer of the shares, with the exception of a member holding shares which correspond to non- capital contributions or guarantee, which have not been fully paid, and thus is not allowed to transfer them unless such contribution is converted into capital contribution and then fully paid.
The Articles of the Private company may however provide for restrictions in the transfer or encumbrance of shares, and may also provide for rights of pre-emption.
The transfer or encumbrance of shares during the life of a member must be in writing and must be notified to the company. The managers shall then register the transfer or encumbrance of the shares in the book of members, and as of that date it shall be opposable to third parties.
TAX AND SOCIAL SECURITY OBLIGATIONS
The tax regime of the Private company is the following:
– Corporate Income Tax rate: 24 %
– Withholding Tax on Dividends: 5%
Before any distribution of profits, 1/20 of the net profits is withheld by the company for the formation of a reserve, which may either be capitalized or set- off against losses.
Managers of the Private company must register with the social insurance organization (EFKA), it is also compulsory for the sole member, in case the PC is single-membered.
However, persons who are already insured in a public insurance organization of another EU member- state may obtain a relevant exemption (A1 form) from the social contibution payments in Greece.
MAIN ADVANTAGES OF THE PRIVATE COMPANY IN RELATION TO OTHER TYPES OF GREEK COMPANIES
– No capital requirements.
– Corporate documentation may be drafted also in any official EU language.
– Quick establishment and very flexible corporate form with minimum expenses and simplified procedure (directors’ and general meetings can be held through teleconference and abroad, any amendments and changes are made by a private agreement).
– Only the manager and the sole member (in case of a single- membered PC) are subject to compulsory registration at the local social security organization (EFKA)
Our legal team is fully qualified and able to advise you and assist you in connection with the registration of Private company and general establishment of your business in Greece.
For more information on the foregoing, please email us at firstname.lastname@example.org.