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Private Capital Company

efm post ΙΚΕ Private Capital Company

[stm_sidebar sidebar=”527″][stm_post_details]Maria Georgoulopoulou – Accountant – Tax Specialist Α’ Class
Panagiotis Kanellos – Accountant – Tax Specialist Α’ Class
Accountants – Tax Specialist Α’ Class

In a few words

Law 4072/2012 (Government Gazette A86 – Articles 43-120) introduced a new corporate form, the “Private Company” or “PC”. This new form was designed to function as a Capital Company and can be commercial, even if its purpose is not commercial. It is more targeted at small and medium-sized enterprises and is a more flexible variation or evolution of the existing corporate form of Limited Company (as established by Law 3190/1950), since its establishment costs less than the ‘outdated’ Limited Company (LTD) and is more flexible in terms of both its capital and its partner relationships, it is fully capable of adapting to new market conditions. See below for all the details on PC from the EFM Accounting Office.

Basic features

The characteristics that make PC stand out from the LTD and other corporate forms are the following:

  • It may be composed of one or more natural or legal persons. If the recommendation is made by a natural or legal person, then we are talking about single-member PC. According to article 58 of Law 4072/2012 the manager can be a natural person. If it is a partner that is a legal entity, then it should designate a natural person as the manager.
  • The articles of association may be a simple private document, without being required to be in the form of a notary document, unless the partners wish so for some reason or in case the contribution of one or more of the partners is in kind, the transfer of which requires a notary act.
  • It has a fixed duration, which, unless otherwise specified in the Articles of Association, can reach a maximum of twelve (12) years. The company’s specified period of duration (12 years, although failure to indicate its duration shall not constitute grounds for annulment of the company).
  • There is no obligation to publish the amendments of the Articles of Incorporation to the Government Gazette. All amendments are published through General Commercial Register or the corporate website.
  • Mandatory insurance in the single social security costume is covered by the PC Managers and its sole partner in the case of a single person. There is no single social security costume insurance obligation for the other partners, who may voluntarily insure if they wish so.
  • The minimum paid-up capital may be one (1) euro, whilst enabling non-equity contributions to be additional either out of equity or guaranteed.
  • 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.
  • Offshore are contributions in the form of, for example, the provision of partner services to the company. Such contributions should be described in detail in the Articles of Association and executed for a specific or indefinite period, as specified in the Articles of Association each time. The value of these contributions will also be determined in the Articles of Association.
  • Guaranteed contributions, which are the liability of one or more partners towards third parties for the debts of the company, but up to the amount specified in the articles of association.
  • 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.

Establishment procedures

In order to set up a PC company, anyone interested should contact the One Stop Shop.The authorities of General Electronic Commercial Registry (GEMI) operating in Chambers, and Citizens’ Service Centers (KEP) which have been certified to act as one-stop shops.

In specific cases where a notarial deed is required in order to draft the company’s Articles of Association, the certified Notary Public who will draft the notarial deed of establishment shall act as a one-stop shop.

So getting started for General Commercial Register you will need:

  • The statute of the company, which will contain at least the ones defined in accordance with article 50 of Law 4072/2012.
  • Statement that will state the address of the company establishment with the original signature of the legal representative.
  • Tax information for all founders and members of PC. If there is no possibility of tax information for one or some of the members or managers, then the company cannot be established, at least with this composition.


The founders of the companies or their representative should submit the following documents (as set out in model 2 of Annex I to K1-802 / 2012 Government Gazette B ‘470 / 24.03.2011).

For natural persons:
  • Police identity card for Greek citizens, ID card or passport for foreigners within the EU, passport and residence permission for foreigners outside the EU.
  • Residence permission for pursuing an independent economic activity or an exact copy thereof, in the case of non-EU nationals designated as managers in PC.
  • Completed forms M1 (Tax Return Statement / Individual Change of Return) and M7 (Taxpayer Relation Statement), for the issuance of a tax ID to any founder member who may not have.
For domestic legal entities:
  • Exact copy of company codified statutes.
  • Decision of the Assembly of Partners to participate in PC, as long as it concerns an LTD company.
  • Official Gazette of the Company and the decision of the Board of Directors to participate in PC, as long as it concerns a company SA.
  • Authorization of the representative of the company that will act on its behalf on the procedures for establishing PC.

The aforementioned supporting documents may be submitted by a designated representative of the founders, with an authorization bearing the authenticity of their signature. By submitting them, a bank account should be made known to General Commercial Register, in which case, if the company is not set up due to glitches, the amounts paid to General Commercial Register will be refunded, except for the Company Cost Statement we will see below. In addition, a written mandate and authority should be filed with One Stop Services (according to Model A of K1-1084 / 24-5-12), which will give the One Stop Service the right to do all actions needed to set up, for example, a request to register with the relevant chamber, a request to provide copies of tax information to the founders, for those who do not exist, etc.

At this stage, the deposition of the documents by the founders or their authorized representative, will have to be paid to General Commercial Register by the Company Costing Letter which costs seventy (70.00) euro for up to three (3) founders and beyond of three, five (5.00) euros shall be added for each additional member-founder.

The General Commercial Register One Stop Shop will then review all supporting documents no later than the next business day and, if it finds any problems, will contact a representative of the founding members to let them know. Thereafter, within two (2) to ten (10) days, as the case may be, the delegate must correct the errors to continue the process. If this time has elapsed and no corrections have been made, then the establishment process is canceled and an application for PC establishment and supporting documents should be re-filed.After successfully completing the verification of the documents, the following should be paid:

  • Taxed fund capital, which corresponds to 1% of the amount of capital indicated in the Articles of Association.
  • Registration fees with GEMI (€10)
  • A €5.80 duty paid to the Lawyers Welfare Fund (Athens)
  • Duty paid to the Lawyers Welfare Fund 0.5% to capital contribution.
  • Fee in favor of the Athens Bar Provident Fund, which is five euros and eighty cents (5.80).

Upon payment of the above, the One Stop Shop registers in the General Commercial Register system the company data, which grants the General Commercial Register number of the company and the Registration Code. The One Stop Shop then transmits to the Ministry of Finance the company’s General Commercial Register number, registration code number, proof of payment of the Fund and the company’s supporting documents. The UAE also forwarded to the Regional Office a statement on the formation of the company and details of the founding members and managers of their actions.

How to tax profits

PC presents the same tax treatment as LTDs. According to Law 4110/13 (Government Gazette 17A / 23.01.2013)

  1. For 2019, twenty-four percent (24%) will be taxed on their income.
  2. 2020 is subject to a 20% tax rate (20%) on the income earned.
  3. While dividend distribution is subject to profits from 2019 and then a 5% tax.

Supposing Alpha & Beta IKE reported net profits before tax for the fiscal year 2019 of € 100,000, it decides to distribute profits. What will be the tax that will be incurred in each case?


The corporation tax for the year 2019 is calculated as follows:

100.000,00 x 24% = 24,000.00 (which will be paid either as a single tax return filing, or in eight (8) installments, with the first being paid upon filing the filing and the rest up to last working day of each following month).

In addition, 5% dividend tax will be paid

So, 100,000.00 x 5% = 5.000.00 (which should be paid as a lump sum within the next month from the one withholding)[stm_post_bottom][stm_post_about_author][stm_post_comments]

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