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Establishment of a LTD Company in Greece

A Limited Liability Company called in Greek Law "etairia periorismenis efthinis (E.P.E.) (Mainly Law 3190/1955, Presidential Decree 419/1986) has the features of a partnership and a corporation. It constitutes a convenient form of organization for both small and medium-size enterprises. The liability of the participants is limited to the amount of their contribution.


An EPE may be formed by one, two or more natural persons or legal entities, however a natural person or legal entity, may not be a single-partner of more than one EPE. The structure and operation of the EPE is ruled by the Articles of Association (Statute) which must be executed before a notary public, constitutes a registered public document and must state the following:

• Founders/shareholders: full name, profession, domicile and nationality.
• The company name: the company name of the EPE must either be formed by the name of one or more of its shareholders or by the business object and in all cases must include the additional designation "Limited Liability Company".
• The registered office: must be established within the area of a Greek municipality or community.
• The object of the company: i.e. the kind of business that it will conduct. A Limited Liability Company may not carry on business that according to the law is conducted only by another type of company, i.e. banking and insurance business is provided by companies in the form of S.A. only.
• The equity capital: the minimum required equity capital amounts today to Euros 18,000 paid in full, either in cash or other assets as long as it is an asset viewable in the Balance Sheet. However, at least 50% of the capital must be paid in cash. If assets are contributed, their value must be officially appraised by a special committee according to the provision of Art. 9 of Law No. 2190/1920. The company's capital is represented by company shares of a nominal value of Euros 30 or multiples thereof. The shares of a Limited Liability Company are not negotiable instruments, in principle they are freely transferable and inheritable. The company's capital should be fully paid upon the signing of the Articles of Association. If the partners are not Greek nations, natural persons or legal entities then, it must be certified with a "pink slip" issued by a bank, that the amount corresponding to the contribution of the partners, has been officially imported into Greece, prior to the deed of formation of the company.
• The duration of the company: The company is formed for a fixed period, as stipulated in the statute.
• The contribution of each founder.

Registration and Publication Procedures

• Within one month after the signing of the notary deed containing the Articles of Association, the company is registered in the Companies' Registry of the local First Instance Court (where the company's registered office is located). The competent Secretary registers the agreement in the Limited Liability Companies Registrar.
• An announcement of the registration and a summary of the deed containing the names of the partners, the company name, the registered office, the object of the company and the capital, the way of representation of the company etc. must be published, under the supervision of the partners or the managers, in the Government Gazette, "Bulletin of Corporations and Limited Liability Companies". The company acquires legal personality, only after completion of the above-mentioned procedure and the publication date of the Gazette is deemed as the date of incorporation of the company.
• Upon establishment, the company is required to register with the Tax Office and procure accounting and company books stamped by the Tax Authorities and also register with the Local Chamber of Commerce.

Operational Structure

A Limited Liability Company operates on the basis of the Partners Meeting and the Administrator.

a) Partners Meeting Major corporate issues may only be decided at a meeting of partners, which is characterized by the law as the "supreme corpus" of the company. These include amendments to the articles of association, the appointment or removal of administrators, the approval of the balance sheet, the distribution of profits, the commencement of legal proceedings against the administrators of the company or its members and the extension of its duration, amalgamation or dissolution of the company. Each partner has at least one vote at the meeting. If a partner holds more than one share, the number of his votes is equal to the number of his shares. A meeting of the partners must be convened at least once every year and within three months following the completion of the company's accounting period. The resolutions to be adopted at the meetings are generally passed with a majority of more than one half of the partners representing more than one half of the total capital of the company. However, a resolution involving an amendment to the articles of association, including the increase or decrease of the capital (which should take place in the presence of a notary public), requires a majority of at least three quarters of the partners representing at least three quarters of the company's articles of association. Notice: Limited by Shares companies may be transformed into a Limited Liability company.

b) Administrator The management of a limited liability company may be entrusted under the articles of association or by a resolution adopted at partners meeting, to one or more administrators who may or may not be partners. This type of company does not have a board of directors.

Cost of Establishment of a Limited Liability Company (EPE)

Currently, the cost is determined by the following factors:

• Capital concentration fee: 1% of the equity capital.
• Lawyers' Social Funds: (5.80 + 0.30%)
• Government Gazette fee: Euros 290.
• Registration with the Chamber of Commerce (Euros 30 for prevalidation and Euros 372 for registration).

Public Private Partnerships in Greece

Agency & Distribution Agreements under the E.U.

Greece has come to Public Private Partnerships relatively late amongst the older nations of Europe. Recognising that it will face stiff competition for resources in what is becoming an increasingly globalised market, the PPP Unit of the Ministry of Finance has taken care to plan a programme to excite interest at home and abroad. The success of this approach can be judged from the number of companies from beyond the borders of Greece attending the recent conferences to promote the PPP programme. Contractors, investors, senior lenders (including, very importantly, the European Investment Bank) and advisers from across Europe and beyond have been actively assessing opportunities.

There are 32 projects in the first wave across a wide range of sectors including government buildings, schools, hospitals, defence, leisure, security and waste. The projects range in size from €16 million to €342 million both NPV (in each case plus 20% for insurance and heavy maintenance). Some of the smaller projects fall below what would be regarded in some countries as suitable for a PPP and it will be interesting to see how the market responds to these smaller deals. One common feature of PPPs is that the bidding stages are expensive for both the procuring authority and the bidders relative to conventional procurement.

Perhaps in recognition of the cost issue, the PPP Unit has so far adopted restricted procedure for tenders for the few PPP projects that have so far come to the market. This should have the effect of simplifying and accelerating the process compared to countries where competitive dialogue is used for PPPs. There will, however, be a price to be paid by the Greek government for using restricted procedure, in terms of reduced scope for the private sector to introduce innovative solutions. It also seems possible that a single round bidding process will not yield the level of price competition that is achieved when bidders have to refine their prices through several bid rounds. It remains to be seen whether the use of restricted procedure will deliver the same value for money as is seen in PPPs elsewhere.

Historically there have been certain cultural features of tendering for public works in Greece that may have tended to deter foreign companies from becoming involved. The PPP Unit has been very open in recognising the need to address this issue head-on and its adoption of restricted procedure for all procurements so far under the PPP programme (the advisory appointments as well as the project themselves) is at least in part designed to ensure that all tenders are awarded on strictly objective and verifiable grounds. Nobody should be in any doubt as to the criteria that will be applied to select the preferred bidder and how they are going to be applied and there should be little or no scope for argument after the event.

At the time of writing (early June 2008) only two PPP projects have reached the stage of having a short-list of pre-qualified bidders and only one of those (7 new fire stations for the Hellenic fire brigade) has issued tender documents to the bidders. It was already known that the PPP Unit intended to learn from the experience of countries with more established PPP programmes, especially the UK. The fire stations Partnership Agreement very closely follows the standard form of Project Agreement published in the UK by the 4Ps, which in turn conforms to version 4 of the guidance on standardisation of PFI contracts published by HM Treasury in the UK, commonly known as SOPC4. Minimal changes have been made to convert the standard from English to Greek law. This should be comforting for everyone concerned, but especially any international participants, as the risk allocation between the public and private sectors represented by SOPC4 has been thoroughly tested and has been shown very many times to be bankable in the project finance market.
There are some areas of concern, where we must all await developments with interest. Although there have been several large BOT projects in Greece, there is relatively little experience of project finance and the disciplines that it introduces. Of necessity, there are lessons that will have to learned here.

There is almost no facilities management industry in Greece. It is an essential feature of PPP projects that there is a competitive industry able to provide the long term operation and maintenance of the facilities procured through PPPs. These projects will typically last for 25 years or more with the construction phase being complete within the first two or three years of all but the very largest projects. Most of the long term risks, therefore, arise in the operation and maintenance phase. The majority of those risks will need to be subcontracted to the facilities management or operations subcontractor, who will be locked in at a fixed price (other than indexation for inflation) for the duration of the project. One of the essential protections for the funders (senior debt and equity) is the ability to remove the facilities management subcontractor if the project is running into problems and appoint a replacement. The funders have to be confident that there will be a competitive market to which they can turn to find the replacement at a reasonable price. In many other countries there is a thriving facilities management industry quite apart from PPPs. It is reasonable to expect that the Greek PPP programme will prove to be the catalyst for the growth of such an industry in Greece and there looks to be a real gap in the market here, ripe for exploitation. Without it, the PPP programme may struggle.

The PPP Unit is promising that it will bring a first wave project to the market more or less every month. They have recognised that deal-flow is one of the keys to ensuring healthy interest from investors, senior lenders, contractors and advisers. It is also clear that there is a recognition on the public sector side that profit is not a dirty word. Private sector businesses exist to make profits and they must be allowed a reasonable opportunity to make a fair return if the PPP programme is to be a success. There is strong international competition for money, expertise and other resources for PPP projects. Greece has understood this and gone out of its way to make its PPP programme attractive. There are sure to be some hiccups along the way and doubtless things will not go quite as quickly as the government might hope, but all the signs are that the Greek PPP programme is going to be a great success.

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