Companies incorporated under the Greek law are of the following types:

General partnership, limited partnership. Partnerships require the collaboration of at least two natural or legal persons

Societé Anonyme (S.A.), Private Company (P.C.; in Greek IKE), Limited Liability Company (LLC)

The founders of all the aforementioned company types should meet the following requirements:

Should hold an Identity Card and a TIN number

 

Should hold an Identity Card or valid Passport and a TIN number. Moreover, on a case-by-case basis and as long as they are engaged in a commercial activity in their country, they are obliged to designate a tax representative in Greece

Having a valid passport and a residence permit if they wish to be company’s managers, otherwise, only the passport is enough. Also, where applicable, and if they undertake commercial activities from their country, they should appoint a tax representative in Greece

The founding members may be natural or legal persons. Natural persons should have attained the age of eighteen (18) (according to article 127 of Civil Code, as amended by article 3 of the L. 1329/83)

The main characteristics of the aforementioned companies are the following:

General Partnerships

The establishment of a general partnership requires the collaboration of at least two parties that, according to the law, are mutually obliged in pursuing a common purpose. The partners are responsible for the obligations of the company with their entire personal property with joint responsibility. With the dissolution of the company the partners are absolved of the liability of any existing debts. For the establishment of a general partnership it is not required a notarial deed, on the contrary a private agreement suffices. In addition, the law does not require a specific amount of share capital, as, in any case, the company’s property is that of the partners’, since they are liable for the company’s obligations with their personal property. Each general partner is liable with their personal property.

Limited Partnership

The establishment of a limited partnership requires the collaboration of at least two parties that, according to the law, are mutually obliged in pursuing a common purpose. The partners of a limited partnership fall into two categories: the general and the limited. The general partners bear joint and unlimited liability towards the company’s creditors, while the limited partners have limited liability, which cannot exceed the amount of contribution to the company. For the establishment of a limited partnership it is not required a notarial deed, on the contrary a private agreement suffices. The limited partner bears the same liability as the general in case their personal name is included in the name of the company, as well as he/she is involved in management and representation. The law does not require a specific amount of share capital for the establishment of a limited partnership, as, in any case, the company’s property is that of the general partners’, since they are liable for the company’s obligations with their personal property. Each general partner is liable with their personal property, while the limited partner to the amount of their share.

Societé Αnonyme (S.A.)

Requirements for the establishment: 1. One or more natural or legal persons. The S.A. is managed by the Board of Directors consisting of at least three members. 2. A notarial deed is required for the establishment. (These is pending statutory provision for establishment of society anonyme by a private document, based on a standard articles of incorporation, which is expected to be implemented in 2019). 3. The procedure is completed at the competent service “General Electronic Commercial Registry” (in Greek: Γ.Ε.ΜΗ. – Γενικό Εμπορικό Μητρώο). CAPITAL: Minimum capital of twenty-five thousand (25,000.00€) euro. BOARD OF DIRECTORS’ AND SHAREHOLDERS’ LIABLITIES: The legal representatives are liable with their personal property for the company’s tax and insurance obligations. In addition they are liable against third parties provided that the liability is proved. The shareholders are liable for the tax and insurance obligations provided that they possess a percentage of at least 10%.

Private Company (P.C.)

Requirements for the establishment: 1. One or more natural or legal persons. In case of a sole partner that is also legal person, it is required that a natural person shall be placed as manager. 2. It is not required a notarial deed for the establishment. 3. The procedure is completed at the competent service “General Electronic Commercial Registry” (in Greek: Γ.Ε.ΜΗ. – Γενικό Εμπορικό Μητρώο). CAPITAL: Not required. MANAGEMENT’S AND PARTNERS’ LIABILITIES: The legal representatives are liable with their personal property for the company’s tax and insurance obligations. In addition they are liable against third parties provided that the liability is proved. The shareholders are liable for the tax and insurance obligations provided that they possess a percentage of at least 10%.

Limited Liability Company (LLC)

After the introduction of P.C. in Greek legislation, this company type is not recommended, since, while it possesses the same characteristics with P.C., it requires particular conditions of publication when established, as well as during its activity. Requirements for the establishment: 1. One or more natural or legal persons. In case of a sole partner that is also legal person, it is required that a natural person shall be placed as manager. 2. A notarial deed or a standard Articles of Incorporation for the recommendation is required for the establishment. 3. The procedure is completed at the competent service “General Electronic Commercial Registry” (in Greek: Γ.Ε.ΜΗ. – Γενικό Εμπορικό Μητρώο). The opening of a bank account is required in a Greek banking institution with the company being the account holder. CAPITAL: A minimum capital is not required. MANAGEMENT’S AND PARTNERS’ LIABILITIES: The legal representatives are liable with their personal property for the company’s tax and insurance obligations. The partners are liable for the tax and insurance obligations provided that they possess a percentage of at least 10%. The liability against third parties is limited to the price of their contribution in the company.

Management Liability in Greece

In Greece since 1923 has been established the personal and joint liability of the management of companies – initially the management of societes anonymes and gradually the rest company forms – for the certified corporate tax liability to the State. Today, the liability is regulated by the provisions of the Art. 50 of the Tax Procedure Code (L. 4174/2013, hereinafter referred to as TPC), according to which, essentially, provisions of the previously in force Art. 115 of the L. 2238/1994 were largely transferred and reformulated, expanding, nonetheless, their subjective and objective scope. A basic differentiation of the current law is the establishment of personal liability for the management of any legal person or legal entity and therefor any company type, in contrast to the exhaustive enumeration of specific company types of the previous legislative regime.

According to the 50 (1) of the TPC, the individuals who are managers, presidents, administrators, managing directors, chief executives to the management and liquidators of the legal persons and the legal entities at the time of their dissolution or merging, bear a personal and joint liability for the tax payment, the interests and the penalties, for which the legal persons and legal entities are liable, along with tax withheld, regardless the time of their assessment. In the eventuality that two legal entities merge, the entity that conglomerates the other or the new legal entity established by the merger bear joint liability along with the aforementioned individuals, for the payment of the liable taxes, as mentioned in the previous paragraph, of the dissolved legal entity, regardless the time of their assessment. Consequently, the above mentioned liability is established initially at the dissolution or the merger of the legal entity. The concept of the winding-up of a company, in line with the settled case-law with reference to the relevant, previously in force, provision of the Art. 115 (1) of the L. 2238/1994, is referred to the dissolution of a company.

Nonetheless, the personal and joint liability of the company management, with regards to the latter’s tax liabilities, is not only restricted to the dissolution or the merger of the company, but it is also established during its operation. Specifically, as defined in the Art. 50 (2) of the TPC, the individuals referred to paragraph 1 are personally and jointly liable for the withholding tax, the VAT and all the attributable taxes, during the operation activity of the legal entity that they represent, as follows: a) If tax was withheld, all the individuals bearing one of the aforementioned positions from the expiry deadline of the tax attribution and after. b) If no tax was withheld, all the individuals, having one of the aforementioned position at the time that there was the obligation of withholding tax.

It is concluded, based on the aforementioned provisions, that, during the dissolution or the merger of a company, the liability of the company management concerns any type of taxes and penalties, as regulated by the TPC, as well as the proportionate interests. On the contrary, the management’s liability, during the operation activity of the company, is limited to the withheld taxes, the VAT and all the attributable taxes, and, consequently, the liability is limited with regards to the objective scope. Essentially, this differentiation has a historical origin, as the Legislator already by 1923 has established the corresponding liability only for the case of the dissolution of the company, justifying it on the need on behalf of the State to ensure, as far as possible, the collection of the legal entity’s tax, before its “disappearance”. In the course of time, the growth of the tax evasion along with the usual inadequacy from the part of the company to cover its tax debts from its own assets, has led to the expansion of the liability of the company management also during its operation, nonetheless, only for the aforementioned types of taxes, which due to their nature are subject to special “punishment”.

In addition to the above, the legal representatives of the companies, liable to single property tax (SPT, in Greek: ΕΝ.Φ.Ι.Α.), but also the liquidator or the temporary manager of the company, which has been wound up or is under mandatory management, are fully responsible along with the liable individuals for the payment of the interests and the penalties due to their actions or omissions (Art. 50 (5) of the TPC)[2]. The aforementioned joint liability of the legal representatives of the companies concerns only the interests and the penalties, resulting from the non-payment or late payment of the SPT (ΕΝΦΙΑ) or other relevant infringements, and it is applied during the operating activity of the company. In contrast, the joint liability for the payment of the SPT (ΕΝΦΙΑ) due by the company, arise at the stage of the dissolution of the company, according to Art. 50 (1) of the TPC. A substantial differentiation of the paragraph 5, in relation to the other paragraphs of the Art. 50 of the TPC, is the additional condition of the causal link between the imposition of the said interests and penalties on the company and the actions or omissions by its legal representatives, liquidator or the temporary manager.

The jointly liable individuals along with the company, may exercise any right that the company would have, against the Tax Administration authorities, according to the aforementioned provisions of the Art. 50 of the TPC. This could be accepted as a case-law, even without the adoption of the aforementioned provision, nonetheless, with this provision it is strengthened and becomes indisputable, a fact of particular importance given the heavy liability established by the provisions said.

With art. 41 (6) of the L. 1640/1919 (“code of laws for the proceeds of taxation”, as it was included to the aforementioned law with its amendment by the art. 19 (1) of the Statutory Order  of the 19th of March 1923

As this provision was added to the Law with Art. 9 (3) of the L. 4223/2013.

The joint liability of the company management for the insurance debts of the company was already provided for by 1999. It is intended, with the new provisions of the L. 4321/2015 (Gov. Gazette 32/21.3.2015) for the relaunching of the economy, the regulation of the ever increasing overdue tax and insurance liabilities. In the framework of the aforementioned provisions it was reintroduced the joint liability of the management of the company and for the first time the joint liability of the shareholders and partners for the insurance debts of the companies.

Thus, according to the provision of the Art. 31 (1) of the L. 4321/2015, the individuals, who are legal representatives, presidents, managers, managing directors, chief executives to the management and liquidators of the company at the time of the dissolution or the merging, are personally and jointly liable for the payment of the insurance debts, additional charges, increments and other charges, that the company is liable to the Institutions of Social Security, regardless the time of their assessment. In fact, on the express dictate of the law, the personal and joint liability of the individuals, bearing the aforementioned professional titles, for the payment of the insurance levies, additional charges, increments and other charges, is established also for the period of time that the company is active.

Further on, amongst others, the company management, bearing personal and joint liability for the debts of the company to the Institutions of Social Security, may repay or independently regulate the insurance liabilities of the company that accrued, when entering upon their duties, according to the existing provisions concerning the regulation of debts, along with the liabilities accrued during their mandate, regardless the time of assessment (art. 31 (3) of the L. 4321/2015). With this regulation the jointly co-liable individuals repay or independently regulate the corporate debts, exempting the company as well as themselves from the consequences that entails the establishment of personal liability for the insurance debts. Moreover, the jointly co-liable individuals for the payment of the corporate insurance debts may exercise, along with the company, any right, that the company would possess, against the Institutions of Social Security, mutatis mutandis to the provision of the Art. 50 (7) of the TPC with respect to the tax liabilities.