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Latest amendments in the legal framework for Limited Liability Companies and Societes Anonymes

31/07/2013

Law 4156/2013, effective May 31, 2013, introduced a significant amendment with regards to the representation of private entities and the assumption of liabilities by them.
 
More specifically, before the enactment of the aforesaid Law, a private entity was legally bound by the signature of its legal representative in addition to the company’s seal.
 
By virtue of article 3 par. 12 of Law 4156/2013 the corporate seal is no longer obligatory, as the signature of the legal representative, his/her name, and the description of his/her capacity are sufficient in order for a private entity to be legally bound.
 
It is clear that the aforementioned provision promotes flexibility over legal certainty, something which might ultimately be proven to be to the detriment of transactions.
 
As far as limited liability companies are concerned, Law 4156/2013 abolished the minimum capital requirement, which practically means that the partners of the company may define the capital of the same at any amount whatsoever, without any restrictions. In the past, a minimum capital of Euros 2.400 was required for the establishment of a limited liability company.
 
Furthermore, Law 4156/2013 has abolished the minimum value requirement for each share part (participation unit), which was formerly set at Euros 30. In case the contributions in kind have a value lower than the minimum value of each share part, as this is defined in the company’s Articles of Incorporation, the balance is covered in cash by the partners.
 
With regard to Societes Anonymes the amendments introduced mainly refer to listed companies. More specifically:
 
The Board of Directors of listed companies may not assign powers relating to the adoption of resolutions concerning the company’s transactions to persons connected with the company, as defined in the International Accounting Standards 24.
 
In addition, listed companies may not enter into any agreements with the persons defined in the International Accounting Standards 24 nor may they conclude any agreements of a value higher than 10% of their assets, even if such agreements are within the everyday transactions with third parties, without a special permit to be granted by the General Meeting of Shareholders.
 
Last but not least, Law 4156/2013 introduced an obligation for members of the Board as well as third persons having been assigned with duties of the Board to reveal to the members, in a timely and sufficient manner, all personal interests as well as any conflicts of interest that might arise upon execution of their duties, including conflicts of interest with an affiliated to the company entity as defined in article 42e par. 5 of Law 2190/1920.
 
In case of conflict of interest, the person involved may not vote for the adoption of the respective resolution by the company’s competent body.
 
Athens, July 31, 2013
Avramopoulos & Partners
 
For further information please contact:
 
Barbara Angelopoulou
Avramopoulos & Partners Law Firm
Email: b.angelopoulou@avralaw.gr
Tel.: +30 210 6912200
Fax: +30 210 6911211
 
Important Note: The information contained in this newsletter is provided for your information only and should not be regarded as a legal advice.