Business Succession in Greece

Abstract

As is usually the case when dealing with the relationship between two specific fields of law, addressing the issue of the reciprocal influence between company law and law of succession is of particular importance. This is all the more important under Greek law, considering the leading position that small and medium-sized enterprises hold in Greek economy. For the SMEs choosing the right successor and preparing the company for a transfer is just as important as an optimal transition in the field of company succession. This is because in a company the death of a partner can cause a number of issues. For example, the deceased’s share may pass to beneficiaries who do not subscribe to the company’s business plan and vision or who lack business experience. Equally, even if the remaining partners/shareholders wanted to purchase the deceased’s shares, they may not have sufficient funds to do so. The challenges arising from a partner’s death are proving to be capable of meaningfully impacting on the continuation of the company, leading often even to its dissolution, all the more so since the purposes of inheritance law (that is establishment of testamentary freedom, protection of testator’s family) are hardly reconcilable with the principle of company law to promote the interests of the company. This is most clearly discernible within companies dominated by the intuitu personae. This is why the Greek company legislator (S. 4072/2012) took the initiative to mitigate the consequences of the death of a partner on commercial partnerships. Henceforth, the death will not bring about the automatic dissolution of the commercial partnership but its continuation with the rest of the partners. The new legislative orientation is in accordance with the general principle of supporting any measures aiming at keeping the company operational and alive.