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Private Company (IKE or PC)

A new simpler and more flexible corporate form, i.e. the Private Company (IKE) is introduced by Law 4072/2012. IKE is a private capital company, i.e. it is a company not subject to public listing that has capital and the liability of its members for the company debts, except for those with the guarantee contribution, is limited. It is a legal entity and considered a commercial company even if the business scope is other than trading. It is certainly a solution which should be taken into consideration before registering a company.

The main characteristics of the Private Company (IKE) are the following:

The first basic characteristic is that unlike the other known capital companies in Greece (EPE and AE) the minimum capital provided is one (1) Euro (whereas the minimum capital of limited liability company currently amounts to EUR 4 500). The minimum capital is a novelty at this new corporate form and follows other European states which have already regulated the formation of companies with similar minimum capital. The members however can decide on a bigger capital either when forming the company of at a later stage, by increasing the capital.

The second basic characteristic, intertwined with the minimal capital consists of the disengagement of the company participation and shares from the capital. The company shares are defined not with the capital as the sole denominator, but rather with the value of the total contributions. Pursuant to articles 35-38, the contribution may be in capital (monetary or in kind) as well as in non-capital or guarantee, i.e. they can consist of assets not subject to evaluation (article 9 of codified law 2190/1920) which include the provision of services or the assumption of liability towards third parties (which may to intervene 75% of the total amount of liability) on behalf of the company (whereas in limited liability companies partners participate only with contributions in cash or in kind). In principle only the company with its assets is liable for the company’s obligations. The new law provides an elaborate presentation of the different kinds of contribution.

The third characteristic is that IKE may only be of a definite duration. In case no such duration is provided in the articles of incorporation, then the duration is defined, by law in twelve-year. The duration can be extended if the majority of the members so decide. If the decision to extend the duration does not provide the duration of the extension, again it is deemed to be twelve years.

The fourth characteristic is that as the law provides that the articles of incorporation, and their amendments, in case they are private documents, as well as the company minutes, may be drafted in any of the official languages of the European Union. Thus, in order to facilitate foreign transactions the incorporation and operation of IKE does no longer follow the rule that the company documents is only kept in Greek. However, the Memorandum and Articles of Incorporation may only be in Greek or in English and the Greek version of documents always prevails against any other language.

IKE can be formed with a private document, unless a notarial deed is required either in case assets contributed to the company require a notarial deed for their transfer (e.g. real estate property) or the parties so prefer. IKE has its company seat in the municipality provided in the articles of incorporation and may transfer its seat to any other member state of EEA without the company being dissolved. The company's name may consist of the name of one or more members or the business activity the company will engage in or be an imaginary name (provided of course that it is not already used by another entity); the law affords the interested parties significant leverage, however, the corporate name must state the company form, either abbreviated or in full and clearly include it when a single member company.

The minimum provisions of the articles of incorporation are provided in said law i.e. (a) the name and the address of the members (b) the company name (c) the company seat (d) the business scope (e) the type of company “private company” (f) kind and value of the members' contribution and corporate capital (g) total number of the company shares (h) the number of initial shares of each member and the kind of contribution each share represents (i) management and representation of the company (j) the duration of the company. Issues related to the company’s administration and its corporate bodies are sufficiently regulated whereas issues related to the company’s financial statements, consolidation of accounts and audit requirements are regulated by direct reference to the provisions of Law 2190/1920. IKE is established at One Stop Shop and registered in the National Commercial Registry (GEMI). The establishment procedure is provided by addition of article 5a in Law 3853/2010. It is advised to know the differences between setting up a limited company and a private company.