Private Company – P.C.

A simpler and more flexible corporate form, namely the Private Company (P.C.), IKE in Greek, has been introduced by Law 4072/2012 (A’86). IKE is a private capital company which has capital and the liability of its members for the company debts, except for those with guarantee contribution, is limited. A private capital company is established by one or more natural persons (founders). Participation to a private capital company requires the acquisition of one or more company shares. The company shares cannot be represented by shares. The company may issue a document for the company shares, which does not have the features of a security.

The P.C. is a relatively new corporate form, which has a legal entity and is also commercial, even if its purpose is not to be commercial. The company with its property is the only one responsible for the corporate obligations. The private company can be incorporated by either one person or become a sole proprietorship. 

The capital of the private company is determined by the partners, without restriction, it can also amount to zero.  The partners participate in the company with capital, non-capital, or with guaranteed contributions.

1. Application– Sworn statement – Authorization to G.E.MI. based on the annex: Form with founder Natural person, Form with founder Legal person
2. Article of association of incorporation original and signed (Standard article of association of P.C.according to G.E.MI.)
3. Two articles of association of the proposed GP, LP, P.C., in printed form, signed by the founders, or by those having special notarial power, and one in electronic editable form (doc).
4. Proof of full payment of capital, which is prerequired by the law in order to establish a company.
5. Proof of registered office: Lease agreement at the Tax Identification Number of the representative, posted on TAXIS.
6. The new start-up form of activities D211
7. Finally, the certificate of incorporation and proof of the Tax Identification Number for the Establishment of P.C.- Incorporation of P.C., are issued

Additional supporting documents that may be needed:

1. Photocopies of police identifications of partners or Passport that is valid for citizens of an EU State Member, Passport and Residence Permit for citizens of non-EU countries,
2. Pre-approval of a health interest permit – Authorization to use the site by the Municipality (If it is required. Mainly for specific professions such as canteens, bakeries, restaurants, hairdressing, etc.)
3. Degree-License for the practice of the profession (if it is required)
4. Bank account of the founders (In case of any amount that has to be returned)
5. Designation of a special representative of the partners with his contact details, in case G.E.MI. needs clarifications or supporting documents,
6. Certificate of registered office inspection (if you do not receive an exemption)

Something that the interested parties need to do at the beginning of the process of establishing a P.C. is the drafting of the article of association of the company.  The article of association can be obtained from a simple private contract and not from a notarial document. The lawyer is the one who drafts the article of association, adapting it according to the needs of the under-establishment P.C. (Private Company).

The Private Companies do not have a minimum funding capital. For the initial capital share of the P.C., the initial expenses and the first investments of the company should be calculated accurately, as the Capital Gathering Tax of 0,5% (PCD) is not imposed on the initial capital share, but on any increase made in corporate fund.

Payment of a refund with an amount of 61,20€ towards GEMI, registration fee of 10,00€. These amounts will not be refunded, even if the incorporation is not completed. The above amounts refer to the cases where the establishment of the P.C. cannot be done electronically and the presence at GEMI is required. In addition, there is the G.E.MI. subscription annual fee:  100,00€ /year.

The OSS checks all the submitted applications and the co-submitted documents for the completeness of their data. In case some document is missing, it sets a deadline for its submission. At the moment that the incorporation of the P.C. is done through conversion by another company, the process is not carried out by the OSS.

The conditions for the registration of the partners in EFKA are not checked, in the process of incorporating the P.C. The partners are obliged to settle outstanding issues with their insurance company. It is also the responsibility of the partners to inform EFKA about the establishment of a new company.

The incorporation of the P.C. can be completed through the electronic platform of the One-Stop-Shop (e-OSS) as well, without going into any public service.

The incorporation of a company is carried out entirely through the internet by the founders themselves, through the special platform of GEMI (https://eyms.businessportal.gr) for the Establishment of the P.C.

As it is not possible to post another article of association, a standard article of association must be registered, filled in through the electronic form with the necessary information, and after checking for the available name for the company.  

The standard article of association of the P.C., with additional content, does not only include the basic elements that are required for the establishment of the company (minimum content of the article of association), but now it is possible to add additional articles, at the discretion of the interested parties, resulting in a more complete article of association. This will adequately meet the needs of the founders, provided that the adding of additional content does not constitute a modification or undoing of the elements of the minimum mandatory content or a violation of the mandatory law provisions.

The cost of the incorporation, of an online business, is lower than what is paid when setting up a company, in the traditional way, since no referral fee is required.

The standard article of association is signed through the internet by the founders of the company. If the standard articles of association are not used, then the company must be incorporated through the classic One-Stop Services of the Chambers.

After the successful completion of the application, the system of e-OSS:

1. Issues a G.E.MI. number and an Entry Code Number (ECN) of the incorporation
2. It creates an electronic Folder and Shares of the company in G.E.MI.
3. Assigns passwords for the electronic platform of GEMI
4. Transmits the information to TAXIS through the online service of AADE in order for the company to receive a Tax Identification Number and a key number
5. Announces the incorporation of the company

• 56101106 Services for providing food from an entertainment center – mainstream tavern
• 56301009 Services that are provided from an entertainment center – cabaret or nightclub
• 56301010 Services that are provided from an entertainment center – Cafeteria
• 56301011 Services that are provided from an entertainment center – service box
• 56301012 Services that are provided from an entertainment center – discotheque
• 90041009 Concert hall services
• 93211001 Water park services (water slides etc.)
• 93211002 Amusement Park services

The article of association is the legal document of the incorporation of the company but also it specifies all the basic issues concerning the relations of the partners, the management of the company, in issues concerning its lifetime but also its dissolution.

According to the article 50 of Law No. 4072/2012, the article of association of the P.C. must at least contain:

• the first and last name, the residential address, and any e-mail address that the partners may have. If the company is incorporated as a sole proprietorship, the name of the sole partner is submitted to the public through the G.E.MI. (article 43 para. 4)
• the corporate name (article 44)
• the registered office of the company, its purpose, its capacity as a Private Company
• the contributions of the partners by category of contributions and their value (article 77 up to 79)
• the capital of the company, the total number of the company shares.
• the initial number of the shares of each partner and the type of contribution they represent
• the management and the representation of the company (articles 55 up to 64)
• the duration of the company (article 46).

For all of the relevant details, you can address a lawyer, given that every company has its own needs, and possibly their advice might be necessary to you.

The name of the Private Company is formed either by the name of one or more partners or by the object of the activity that it carries out, or by other verbal indications. The name of the company can be rendered in whole or in part in Latin characters.

The name of the private company must contain in each case the words «Private Company» in full, or the acronym «P.C.». For the international transactions, the above words are expressed as «Private Company» and/or as the acronym «P.C.».

If the company is a sole proprietorship, the name of the company, must contain the words «Single Member Private Company» or «Single Member P.C.»  For the international transactions, the above words are expressed as “Single Member Private Company” and/or as “Single Member P.C.”.

The One-Stop Service, through the system of G.E.MI., electronically pre-checks and pre-approves the use of the brand name and the distinctive title. In case the proposed name and the distinctive title of the company that is to be incorporated, collide with an earlier registration, you are obliged to choose another name. To check the brand name and the distinctive title click here.

The Private Company has its registered office in the municipality mentioned in the article of association of the company. The registered office of the P.C., for the establishment of the P.C., can establish branches, agencies, or other forms of secondary establishment, in other places in Greece or abroad.

The duration of the P.C. can now have a certain or indefinite time according to the articles 50 to 55 of Law No. 4872/2021. For those companies that have chosen a fixed duration, the duration will be automatically converted to an indefinite time, unless the partners decide to terminate it.

In each document of the company, what must mandatorily be mentioned is the name of the company, the company’s capital and the total amount of the guarantee contributions of article 79. The number of G.E.MI. of the company, its registered office, and its exact address, as well as whether the company is under liquidation are things that must be mentioned for the Establishment of P.C.- Incorporation of P.C.

The Private Company must, within one month of its establishment, acquire a corporate website (website), where the names and the addresses of the partners must be displayed with the care and responsibility of the administrator, with the category of contributions of each, the person exercising the management, as well as the information in the previous paragraph. Afterwards, this is registered in the G.E.MI.

In the case that the company does not have a corporate website, it is obliged to give or send its information free of charge and without delay to anyone who requests it.

For the establishment of the P.C. – incorporation of the P.C., the incorporation of the private company is done by the registration of the company in the G.E.MI., where they are made public under the article 16 of Law No. 3419/2005 and the amendments of the article of association.

The publication of the annual financial statements in the G.E.MI is completed, with the administrator being the sole party responsible for its completion.

The founders who traded with third parties, in the name of the company before its incorporation, are to be blamed completely and in full. However, only the company is responsible for the transactions that took place during this period, if within three months from its establishment it undertook the relevant obligations with an act of the administrator.

The responsibility of the partners is limited to the amount of their contribution to the capital and does not extend to their individual property.

For the establishment of the P.C.-incorporation of the P.C., the company needs to be managed and represented by one or more managers. An administrator can only be a natural person, partner or not, for a definite or indefinite period of time.

The administrator has the capability to be remunerated for the management, only if this is provided for by the article of association or by the decision of the partners.

The manager is responsible for possible violations of the article of association which may arise on the company’s fault and for the decisions of the partners, as well as for any managerial fault.

The responsibility of a P.C. administrator towards the company concerns the faulty violations committed by the administrator in terms of his compliance with the law governing the corporate operation of the P.C. (Law No. 4072/2012) and its article of association. The issue is complex and complicated. The P.C. administrator may be liable personally and jointly and severally with his personal property, in certain cases.

The P.C. administrator, regardless of whether they are also a partner of the P.C., is personally responsible to the Tax Authority and in solidarity for the payment of the taxes, regardless of the time of their certification. Fines or any administrative sanctions that may be imposed on the company, which relate to overdue debts from the term of the administrator, were not paid to the State due to the administrator’s own fault. The exact same thing is true of the administrator’s responsibility rate for the payment of the insurance contributions and the claims of third parties.

If a natural person is deemed as the P.C.’s administrator, but in reality, another person manages the company, they can go to court for abdicating this responsibility.

A Private Company can be dealt with, in a court of law, in terms of liability and borrowing, as a sole proprietorship. This can happen in companies that operate under a single natural person (an entrepreneur), as is the case of the Single Member P.C.

For the maximum transparency in the financial transactions, the manager must mandatorily comply with:

1. Double-entry book-keeping surveillance system (Category of books C’, keeping of cash register, drawing out a balance sheet)
2. «The Partner’s Book», in which the names of the partners, their addresses, the number of shares held by each partner, the type of contribution representing their shares, the date of their acquisition and transfer, and the special rights provided by the article of association to the partners are registered.
3. «A single book of practical decisions of the partners and decisions of the management». All the decisions of the partners and the decisions of the management that are taken by more than one manager are recorded in this book.

A partners’ decision is required for the approval of the annual financial statements and the distribution of profits.

At least 5% of the net profits must be retained each year, before each distribution of profits, in order to form a regular reserve. This reserve can only be capitalized or offset by losses. Additional reserves may be provided for, in the article of association or be decided by the partners.

The distribution of profits for the P.C is not obligatory. The partners decide whether to distribute profits, which should be derived from the annual financial statements.

Supporting documents for the Establishment of the P.C. – Incorporation of the P.C., activity code number. KAD is the activity code number that must be declared by each professional or company. The code number should match the real object of the activity and the image of the company as much as possible. You must necessarily declare the main KAD and then as many secondary ones as you want, without any problem if one is completely different from the others. You have the right to engage in as many activities as you wish.

You have to be very careful here as each code may require additional supporting documents such as an operating license from the Municipality or a license to practice the profession, different accounting monitoring, or a specially designed space. Unfortunately, these codes have been in force since 2008 and have not been adjusted to modern data. If you do not find the exact name, you will choose a close one, along with the simultaneous approval of the tax office.

• Single Tax Rate: 22% regardless of the number of earnings for income of 2021, reduced by 2% (24% until 2020).
• The tax advance is paid in the first year and then every year following, the tax is paid back and pre-paid for the next use. Therefore, after the first year, if the income remains stable, the charge is not perceived.
• The percentage rate is reduced from 100% to 80% for incomes dated in 2021 and beyond.
• These percentages are reduced by fifty percent (50%) for new legal persons during the first three (3) financial years from the declaration of commencement of operations.
• The fee of the manager is taxed as an income of a worker.

The Private Companies have a distribution of profits tax, with the tax rate reduced from 10% to 5%. However, the distribution of profits is not mandatory. The distribution rate of the money is decided by the partners.

The profits are also subject to a rate of formation of a regular reserve on profits after taxes of 5%.

• 800 euros per year, for legal persons that are operating a commercial business and have their registered office in tourist locations and in towns or villages with a population of up to 200,000 inhabitants.
• 1000 euros per year, for legal persons that are operating a commercial business and have their registered office in cities with a population of over 200,000 inhabitants.

You should pay special attention to monitoring the tax, and the bureaucratic obligations and responsibilities that a business has.

A very small mistake, even out of ignorance, can certify fines from 100€ up to 10.000€ and impose several sanctions mainly on a tax inspection.

The approach of a business requires responsibility, training, and constant updating. You need to find a reliable partner such as TKC Consulting & Finance who can take on the tax obligations as well as the new ones that are constantly being created.

A good accountant works for your benefit in a human and stable partnership that is based on trust and chemistry between you. Not everyone fits with everyone! They support you throughout your business career, whether you are starting a sole proprietorship or the establishment of a general partnership, or the incorporation of a P.C. or any other kind of form of company.

You can get accounting support only for the keeping and updating of your books or for submitting applications. This option has a low cost for your business because the cooperation is not monthly and does not provide counsel and communication, which is why it allows you to pay for each job separately.

 Only in the full monthly accounting support, there is the possibility of direct communication and as a priority, the counsel in the company, the immediate information for new laws, the support in tax inspections, and the guidance for maximizing profit. In order to receive the best possible accounting support with all the benefits, both the accountant and the entrepreneur must be associated with respect and appreciation!