The Private Company — IKE is one of the most widely used corporate forms in Greece for new businesses, professional collaborations, family businesses, startups and small or medium-sized enterprises.
Its popularity is not accidental. The IKE combines flexibility in formation and operation, limited liability of partners, the possibility of a single-member company and broad contractual freedom in drafting the articles of association.
This does not mean, however, that setting up an IKE is a purely formal process without risks. The articles of association, the choice of partners, management, contributions, exit terms, tax and social security consequences and the future operation of the company must be carefully assessed from the outset.
An IKE can be set up quickly. The real question is whether it will be set up properly.
What Is an IKE and Why Is It Often Chosen?
The IKE is regulated by Law 4072/2012. It is a capital company with legal personality and commercial status, even if its purpose is not commercial.
As a rule, the company itself is liable for corporate obligations with its own assets, not the partners with their personal assets. This protection, however, should not be presented as absolute. Personal guarantees, tax or social security liabilities, manager liability or cases of abusive conduct may require specific assessment.
A key feature of the IKE is that its corporate capital is determined by the partners without a minimum threshold and may even be zero. In practice, however, choosing very low or zero capital is not always commercially advisable, especially where the company intends to carry out real economic activity, obtain financing or cooperate with third parties.
The IKE allows three types of contributions:
Capital contributions, meaning contributions in cash or in kind that form the company’s capital.
Non-capital contributions, such as work or services, which do not form capital but are valued and correspond to company shares.
Guarantee contributions, through which a partner assumes liability towards third parties up to a specific amount, in accordance with the articles of association and the law.
This flexibility is useful, but it requires careful drafting, especially where not all partners contribute money or where their contribution to the company is of a different nature.
Cost of Setting Up an IKE: What You Should Know
The cost of setting up an IKE depends on the method of formation, the number of partners, the type of articles of association, the need for specific provisions and the additional steps required for the company to begin operating.
In general, a distinction should be made between:
Administrative fees and formation expenses, connected with the One-Stop Service, the General Commercial Registry and the relevant filings.
Operational start-up expenses, such as tax activation, accounting organisation, opening a corporate bank account and practical steps required to begin transactions.
Legal and accounting preparation costs, where tailored articles of association, specific regulation of partner relations, tax assessment or preparation for a future investor are required.
It is not correct to view the IKE merely as a “cheap company”. Formation may indeed be relatively accessible, but the real value lies in the quality of preparation. Poorly drafted articles of association may later lead to partner disputes, management deadlocks, unclear exit terms or difficulties in financing and share transfers.
For the exact calculation of administrative expenses, the applicable fees of the competent platform and the General Commercial Registry should be checked each time, as amounts may change.
The Procedure for Setting Up an IKE Step by Step
Step 1 — Choosing the company name and trade name
Before formation, the company name and, where desired, the trade name must be selected. Availability should be checked in order to avoid conflicts with existing companies, trademarks or distinctive signs.
The choice of name is not merely a formality. For a business that intends to develop a commercial presence, website, brand or international activity, trademark protection should also be considered.
Step 2 — Selecting the corporate purpose and activity codes
The company’s purpose and activity codes must be selected accurately. An incorrect or incomplete choice may create problems in invoicing, tax treatment, licensing, subsidies or future activities.
The corporate purpose should be neither excessively narrow, limiting development unnecessarily, nor excessively broad and vague, creating practical or tax issues.
Step 3 — Drafting the articles of association
The articles of association are the foundation of the company. A standard template may be used, especially in simple cases, but where there are several partners, different contributions, specific management terms or future growth plans, tailored drafting is required.
The articles should clearly regulate:
The partners and company shares.
The type and value of contributions.
Management and representation of the company.
Decision-making procedures.
Admission of new partners.
Transfer of company shares.
Withdrawal or exclusion of a partner.
Valuation of shares in case of exit.
Dissolution and liquidation of the company.
Step 4 — Formation through the One-Stop Service
The IKE is formed through the competent One-Stop Service or electronically, where the relevant requirements are met. Once the procedure is completed, the necessary filings are made with the General Commercial Registry and the company acquires legal personality.
Depending on the method of formation, the type of articles and any legality review required, the completion time may vary.
Step 5 — Tax and accounting organisation
After formation, the company must organise its tax and accounting operation. This includes proper monitoring of income and expenses, compliance with accounting obligations, VAT management where applicable, periodic filings and compliance with tax authority requirements.
An IKE should not be treated as a mere extension of the partner’s personal activity. A clear distinction between corporate and personal finances is required.
Step 6 — Social security issues and management
Social security issues must be assessed from the outset, especially where the manager is also a partner or where the company is a single-member IKE. The capacity of partner, the capacity of manager and the method of remuneration may have different social security and tax consequences.
For this reason, social security treatment should not be assumed, but assessed on the basis of the specific structure of the company.
Step 7 — Banking and practical operation
The company needs a corporate bank account, a clear method for managing payments and receipts, access to electronic services and practical organisation of its daily operation.
Proper operation from the first day reduces the risk of tax, accounting and corporate problems in the future.
Legal Pitfalls to Avoid
Incomplete articles of association
The most common mistake is using a simple template without provisions for real problems that may arise later.
What happens if a partner wants to leave? If the partners disagree on management? If a partner stops providing work although they received shares for a non-capital contribution? If a new investor is to enter? If someone wants to transfer their shares to a third party?
If these issues have not been addressed, the company may reach a deadlock.
Incorrect regulation of contributions
Contributions in an IKE are not a simple formality. Capital, non-capital and guarantee contributions have different legal and financial significance.
A non-capital contribution must be described clearly, especially where it consists of work or services. A guarantee contribution must be fully understood by the partner assuming it, because it may involve personal liability up to a specific amount.
Unclear management and representation
The choice of manager is critical. The articles must define who represents the company, with what powers, whether approvals are required for specific acts and which matters must be decided by the partners.
In companies with several partners, it is often necessary to provide for increased majorities for important decisions, such as borrowing, transfer of assets, change of activity, admission of a new partner or transfer of shares.
Incorrect activity codes or incomplete corporate purpose
The wrong choice of activity codes may create problems in the company’s daily operation, licensing, subsidies, tax treatment or contracts with third parties.
Similarly, a poorly drafted corporate purpose may require amendment very early, with additional time and procedural cost.
Mixing company and personal finances
The IKE has its own legal personality and assets. Using company funds for personal needs, unexplained withdrawals, lack of supporting documents and mixing personal and corporate transactions may create serious tax, accounting and legal problems.
Limited liability should not be understood as permission for informal operation.
Insufficient regulation of manager remuneration
The manager’s remuneration, especially where the manager is also a partner, must be assessed from a tax, social security and corporate perspective. It should not be confused with profit distribution, nor treated casually as a simple withdrawal of money from the company.
Proper regulation from the outset reduces the risk of future tax or social security issues.
Ignoring accounting and publication obligations
The IKE has obligations regarding accounting records, preparation and publication of financial statements, filings with the General Commercial Registry and proper recording of corporate decisions.
Failure to comply may lead to fines, problems in transactions with third parties and difficulties in transfers, financing or corporate restructuring.
Why Legal Review Matters Before Formation
The possibility of setting up an IKE quickly does not mean that every IKE should be formed in the simplest possible way.
Legal review before formation helps answer critical questions:
Which corporate form truly fits the activity?
How should company shares be allocated?
Who will be the manager and with what powers?
How will the entry or exit of a partner be regulated?
How will the company be protected in case of disagreement?
How will the company be prepared for an investor, financing or transfer?
Which tax and social security consequences should be examined from the beginning?
Proper formation is not only about the first day of operation. It concerns the stability of the company for the years ahead.
Frequently Asked Questions About Setting Up an IKE in Greece
What is the minimum capital for an IKE?
Today, the capital of an IKE is determined by the partners without a minimum threshold and may even be zero. In practice, however, the amount of capital should be assessed in light of the company’s needs and commercial image.
How long does it take to set up an IKE?
The time required depends on the method of formation, whether standard or tailored articles are used, the number of partners, the completeness of the information and any specific legality issues. In simple cases, formation may be completed relatively quickly, while more complex cases require more preparation.
Is a notary required to set up an IKE?
Not always. An IKE may also be formed by private document, unless there is a specific reason requiring a notarial deed, such as a contribution of an asset whose transfer requires notarial form.
Can I set up a single-member IKE?
Yes. A single-member IKE is permitted and frequently used. The sole partner may also be the manager, but social security, tax and organisational consequences must be carefully assessed.
How is an IKE taxed?
The profits of an IKE are taxed at the level of the legal entity under the applicable corporate income tax rate. If profits are distributed to partners, the applicable tax treatment for dividends applies.
Taxation should not be assessed in isolation. Manager remuneration, social security contributions, profit distribution, business expenses and the overall structure of the activity must also be considered.
What if I want to add a partner later?
A new partner may enter through a transfer of company shares or another corporate act, depending on the company’s structure and articles of association. If the original articles do not contain clear rules on admission of new partners, share transfer and valuation, the process may become more complex.
Is an IKE always the best choice?
Not necessarily. The IKE is flexible and often suitable, but it is not the right form for every activity. Depending on the nature of the business, the partners, the tax profile, financing needs and future plans, other forms such as a general partnership, limited partnership, limited liability company or société anonyme may also need to be considered.
Work with an Experienced Corporate Law Firm in Greece
Setting up a company is not a simple administrative formality. It is the legal foundation on which the business activity, partner relations, management, liability and future development will be organised.
Our firm provides specialised legal support in matters involving IKE formation, corporate law, drafting of articles of association, transfer of company shares, corporate restructurings and legal organisation of businesses.
We assist with the assessment of the appropriate corporate form, the drafting or review of articles of association, the regulation of relations between partners, legal support during the formation procedure and the creation of a secure corporate structure from the first day of operation.
In cooperation, where required, with accountants and tax advisers, we ensure that the company is not merely formed quickly, but organised with clarity, foresight and legal certainty.
This article is for informational purposes only and does not constitute legal advice. Each case requires an individual assessment, based on its specific facts and the applicable legal framework. For tailored legal advice, please contact our office.
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