Entrepreneurship is not an impulse. It is a choice of structure, responsibility, and perspective.
You have decided to take the next step and start your own business.
You have settled on the field of activity and, most likely, you have already identified the place where you will conduct your professional activity.
Before you proceed with starting operations, it is necessary to have complete and substantial information, so that you can choose the correct legal form.
This choice is not a formality; it is decisive for the tax burden, the operation, and the future development of your business.
In the Greek context, the main forms of businesses you can choose from are the Sole Proprietorship, the Partnerships (General Partnership and Limited Partnership), and the Capital Companies (Private Company, Private Capital Company, and Public Limited Company).
Each choice has different characteristics, obligations, and levels of risk.
- Sole Proprietorship The sole proprietorship is the most flexible and simple form of business activity. The tax rate is progressive and starts at 9% for the first €10,000 of net profits, reaching up to 44% for income over €40,000. With Law 5073/2023 the minimum imputed net income (ΕΤΚΕ) was established, which amounts to at least €10,920, a fact that significantly affects very small businesses, with specific exceptions – among them newly established ones. The tax prepayment amounts to 55%, and there is no longer a business duty fee as it has been abolished. The sole proprietorship is mainly suitable for activities with low to medium profitability, as it offers fast decision-making and low establishment and management costs.
- Personal Partnerships (O.E. – E.E.) Personal partnerships place emphasis on the partners themselves. General partners are liable without limit and jointly and severally with their personal assets towards third parties, suppliers, and the State. For this reason, the choice of partners is critical and requires a high level of trust and harmony. The tax rate is 22%, with an 80% tax prepayment, while the minimum imputed income is not applied. For their establishment, a partnership agreement is required with clear terms regarding the partners’ rights and obligations. General and limited partnerships acquire legal personality upon their registration with the General Commercial Registry (G.E.MI.), in contrast to the silent partnership, which does not have legal personality.
- Capital Companies (E.P.E – I.K.E – A.E) Capital companies are based on capital and not on persons. The partners or shareholders, as a rule, are not liable with their personal property for the company’s obligations, with exceptions concerning debts to the State and Social Security Funds when they participate in management. Taxation amounts to 22%, with an 80% tax prepayment, while the minimum imputed income does not apply. Keeping double-entry books is mandatory. For incorporation, articles of association are required, which in the case of a PC may also be a private document. This specific form is usually chosen by businesses with high profitability, investment plans, or prospects of inclusion in development and financing programs.
