Appointment of a sole director (instead of a Board of Directors) in Greek S.A. companies
A significant innovation of Law 4548/2018 is Article 115, which for the first time provides for the possibility of managing a public limited company by a single-member administrative body for small and very small enterprises that do not have shares on the regulated market, instead of the existing institutional framework, which stipulated that the sole administrative body of a public limited company was a board of directors with three-members as a minimum.
For the definition of “micro,” “small,” “medium,” and “large” enterprises, the provision of Article 2(k) of Law 4548/2018 refers to the entities of Law 4308/2013 and specifically states that “For newly established companies and until the first balance sheet is drawn up, ‘micro’, ‘small’ and ‘medium-sized’ companies are those whose capital does not exceed €100,000, 500,000 and 1,000,000 euros, respectively, while ‘large’ companies are those whose capital exceeds 1,000,000 euros.”
Specifically, the scope of Article 115 of Law 4548/2018 is limited to small and very small companies that are not listed on an organized market.
Therefore, according to the provisions of paragraphs 2 and 3 of Article 2 of Law 4308/2013, “Small entities are entities which, on the date of their balance sheet, do not exceed the limits of at least two of the following three criteria: a) Total assets (property): €450,000, b) Net turnover: €900,000, c) Average number of employees during the period: 10 persons”, while “Small entities are entities that are not small entities and, on their balance sheet date, do not exceed the limits of at least two of the following three criteria: a) Total assets: €5,000,000, b) Net turnover: €10,000,000, c) Average number of employees during the period: 50 persons.”
According to paragraph 1 of Article 115, single-member management is possible provided that the company’s articles of association provide for the existence of such a body. This administrative body, which is always a natural person, is called a “managing director”.
Pursuant to the provisions of Article 115(2) of the above law, the appointment, the conditions of eligibility, the term of office, the powers, duties, and responsibilities, the appointment of a substitute managing director, civil and criminal liability, the remuneration of the Director-Manager and related matters are governed by the rules applicable to the Board of Directors, to the extent that these are compatible with the nature of the Director-Manager as a single-member body. Therefore, the rules concerning the Board of Directors as a collective body that are not compatible with the nature of the Managing Director as a single-member body, such as the provisions concerning the convening of members to meetings, the meetings themselves, decision-making, quorum and majority, the election of members on the basis of lists or the possibility of direct appointment of some of them by the minority, do not apply.
With regard to the obligation of each member of the Board of Directors to inform the other members, given the absence of other management members, the obligation to inform the liable Director-Manager is transferred, based on the provision of paragraph 3 of Article 115, to the shareholders of the company, either in the context of a general meeting or individually to each of them, in accordance with the principle of equal treatment.
In the event of contracts being concluded between the Managing Director and the public limited company, decisions (pursuant to Article 99) are taken and approvals are given by the General Meeting (Article 115(3)), instead of the Board of Directors, which does not exist in this case. Board of Directors, which does not exist in this case.
It should be noted that the decisions of the Managing Director that do not concern matters of current management or constitute acts to be registered in the General Commercial Registry (G.E.M.I.) are recorded (Article 115(4)) of the law in the relevant minutes book (Article 93), which of course may also be kept electronically, as is the case with the Board of Directors.
Based on the above, from 1.1.2019 (and subject to the relevant provision in the articles of association), small and micro-enterprises, as well as companies not listed on an organized market, have the option of entrusting their management to a single person.
This option of single-member management offers significant advantages, including the reduced cost of employing a single executive, more direct and rapid staffing of the management of small and very small public limited companies, especially “family” public limited companies, and greater flexibility in the day-to-day handling of their transactions. At the same time, the range of persons who may be involved in legal disputes and exposed in any way to legal risks is automatically reduced.
The information is accurate to the best of our knowledge as at the time of writing. We have no obligation to update it. We accept no responsibility against any third party who is not a client of the firm and has not signed the terms of our engagement.