Reasons of dissolution per corporate type:
S.A. which stands for Société Anonyme (in Greek “Α.Ε.”, “Ανώνυμη Εταιρεία”):
- Expiration of the company’s term (unless the company is of indefinite term).
- Decision of the General Meeting of Shareholders, taken by increased quorum and majority and submitted as means of publication before the General Commercial Registry (GEMI). The Articles of Association may provide for further means of publication (e.g. in newspapers etc.).
- Declaration of bankruptcy.
- In case of rejection of the bankruptcy application due to insufficient assets to cover the costs of the bankruptcy procedure.
- Court decision.
- By court decision following application of any person with vested interest when (i) the principal capital was not paid within the ambit of the incorporation of the company and remains unpaid at the time the application at Court is filled, or, (ii) the company does not have the minimum capital prescribed by law, or, (iii) the company has not submitted before GEMI the financial statements of at least two consecutive accounting years, approved by the General Meeting of Shareholders.
- By court decision following application of the shareholders who represent at least one-third (1/3) of the paid-up capital, if there is a material reason, which makes it, in a profound and permanent way, impossible for the company to continue.
L.L.C. which stands for Limited Liability Company (in Greek “ΕΠΕ”, Εταιρεία Περιορισμένης Ευθύνης”):
- Declaration of bankruptcy.
- Decision of the General Meeting of Partners taken by a majority of two-third (2/3) of all partners, representing 2/3 of the company’s capital, unless the articles of association stipulate otherwise.
- Court decision following application of the shareholders who represent at least one-tenth (1/10) of the company’s capital.
- In any other case provided for by law or the articles of association.
P.C. which stands for Private Company (in Greek “Ι.Κ.Ε.”, “Ιδιωτική Κεφαλαιουχική Εταιρεία”):
- By decision of the General Meeting of Partners, taken by increased majority of two-thirds (2/3) of the total number of company’s parts (i.e. shares), unless the articles of association provide for more stringent majority threshold.
- Declaration of bankruptcy.
- In any other case provided for by law or the articles of association.
PERSONAL COMPANIES, i.e. G.P. which stands for General Partnership (in Greek “Ο.Ε.”, ”Ομόρρυθμη Εταιρεία”) & L.P. which stand for Limited Partnership (in Greek “Ε.Ε.”, ”Ετερόρρυθμη Εταιρεία”):
- Expiration of the company’s term (unless the company is of indefinite term).
- Decision of the partners.
- Declaration of bankruptcy.
- Court decision following a partner’s application, provided there is a material reason.
- In case the company remains with only one partner and there is no publication at the commercial register of the entry of a second partner within 4 months.
- Any other reason that the articles of association provide.
The liquidation procedure
In most corporate types, liquidation is governed by the following principles. This phase begins immediately after the dissolution of the company has been published (typically, when registered by the General Commercial Registry). The liquidator(s) (who are appointed by the shareholders/partners resolution of dissolution or by a relevant provision of the articles of association or by law) have the obligation to draw up the liquidation opening balance sheet and to take the inventory of all company’s assets, rights and obligations. Actions in the context of liquidation must always aim to complete the process quickly, to collect the company’s claims and pay its obligations. The company’s claims, which cannot be collected, may be struck off its books, whereas claims against the company can be collected by contributions of the partners, liquidation of its assets, or, through the continuation of its activity and therefore its profits. The activity of the company can continue during the liquidation only for the purposes of the liquidation, i.e. to make profit for meeting in a timely manner of the company’s obligations.
As soon as the necessary liquidation activities are carried out, the final balance sheet is drawn up at the end of the liquidation, which is published in the commercial register and the product of the liquidation is distributed to the shareholders/partners and if the partners/shareholders agree it is possible that the company’s existing assets are distributed as such to the partners/shareholders according to their participation/shareholding in the company.
At this point it is worth mentioning that the dissolution of personal companies (i.e. GP or LP) is followed by liquidation unless the partners have agreed otherwise in accordance with the articles of association. Therefore, in such corporate types, it is possible to omit the liquidation procedure, in which case only the final balance sheet will be drafted and submitted to GEMI.
Acceleration and termination plan of liquidation
In the SA, LLC or PC corporate types, if the process of liquidation is delayed for more than 3 years, the liquidator has the obligation to convene a General Meeting of the Shareholders/Partners in which he submits an acceleration and termination plan of liquidation. This plan includes a report about the actions of liquidation that have been completed until then, the reasons for the delay and the proposed measures for its termination.
If the plan is approved, the liquidator completes the process according to the predicted plan. If the plan is not approved, the liquidator or the shareholders/partners of the company representing more than 1/20 of the company’s shareholding, may ask the court for the approval of the plan or the fixing of other appropriate measures.
Deletion of the Company
Once the liquidation is completed, the Company is finally terminated and deleted from the commercial registry. In the S.A. corporate type, the liquidation is considered as completed following 5 years from its commencement.
Revival of a company
If the company had assets or obligations which were omitted within the ambit of the liquidation procedure, then the company may be revived. Revival of the company may also take place in specific instances for the SA, LLC and PC corporate types.
May 2024
Disclaimer: this article is provided for informative purposes and shall not be perceived as legal advice.