Idiotiki Kefalaiouchiki Etairia (IKE)
Greek start-ups usually choose the legal form of the IKE. It offers the advantages of low formation and maintenance costs, limited shareholder liability and flexibility regarding the shareholder contributions to be made. It combines the characteristics of partnerships and corporations, which is why there is no clear equivalent in German law.
PE/VC Funds may not participate in the Board of Directors. Instead, the shareholders may reserve the right to approve certain management decisions.
One or more directors, who form a Board of Directors, manage the IKE. There is no separate supervisory body to monitor the management. For certain management tasks the approval of the shareholders' meeting can be reserved.
Investors monitor their investment either by appointing one or more directors or by determining the decision-making competence of the shareholders' meeting on particularly important questions of the company which lie within the scope of management.
A direct participation of a PE/VC Fund in the Board of Directors is not permitted. Investors often monitor their investment by appointing a director who is independent of the PE/VC Fund. In addition, certain management decisions may be subject to the approval of the shareholders' meeting. Regarding the scope of the restriction, it must be examined on a case-by-case basis whether this still leaves sufficient room for the Management to make decisions.
Anonymos Etairia (AE)
At a later stage, between the seed- and the Series A-financing rounds, start-ups usually convert their legal form from IKE to AE.
A direct participation of a PE/VC Fund in the Board of Directors is not permitted. As with the IKE, reservations of approval may be granted to the shareholders' meeting.
The information in our toolbox provides managers of private equity or venture capital funds with an initial overview of certain framework conditions in the respective country. It does not provide advice on the law of any country, neither does it substitute such advice. Before taking over a board seat in a portfolio company, it is at all times necessary to seek expert advice. Our team is happy to assist you with all questions at any time.
In collaboration with: Zepos & Yannopoulos
Sources: Wegen/Spahlinger/Barth, Gesellschaftsrecht des Auslands 2. EL Januar 2018