Although Law 2190/1920 has been amended repeatedly, there were still many issues which needed to be revised, abolished or introduced in order to establish an efficient legal regime in line with the economic environment.
In light of this environment, the new law introduced a number of European directives, including EU Directive 2017/828 for the encouragement of long-term shareholder engagement, EU Directive 2013/34/EU on annual financial statements, EU Directive 2007/36/EC on the rights of shareholders of listed companies, and EU Directive 2017/1132, which relates to certain aspects of company law.
Furthermore, the new law clarified certain ambiguities regarding corporate practice. It confirmed that:
- Share capital may be paid by offsetting claims of a (potential or existing) shareholder against the company;
- A shareholders pre-emptive right may be abolished by a Board of Directors (BoD) resolution on certain conditions;
- Third parties may attend general shareholders meetings on certain conditions; and
- The share capital may be reduced and dividends may be paid in kind following valuation by a certified auditor.
Furthermore, the new law provides new types of titles that may be issued by a société anonyme, such as warrants and combined titles, while de-materialised shares may also be issued by non-listed SAs.
Bearer shares are also abolished and all shares must be registered, which is in line with the goals pursued by EU Directive 2015/849.
The minimum share capital is set at €25,000 ($28,000), while the minimum nominal share value has decreased from €0.30 to €0.04 in the interest of flexibility. The payment of the share capital must be verified by a certified auditor, although certain exceptions are provided (in which case the certification is made by the BoD).
It is further noted that any amounts deriving from the issuance of shares higher than the nominal value may be offset with losses from company losses (in certain conditions). However, they may not be distributed as dividends.
Furthermore, the new law clarified in detail what profit amounts may be distributed as dividends, in order to ensure that they correspond to realised profits as opposed to goodwill.
Finally, it is noted that issuance and/or partial transfer of a title (i.e. with only part of the rights incorporated), is prohibited without prejudice to joint rights, usufruct, pledge, and the transfer of autonomous proprietary rights (e.g. the right to dividends).
Overall, the New Law is a significant step toward efficiency, flexibility and modernisation of the legal regime of SAs, and is capable of contributing to the development of entrepreneurship and attraction of investment.
The views reflected in this article are the views of the author and do not necessarily reflect the views of the global EY organization or its member firms.