Unless the business structure needs to be complex, it is usually best to opt for a Sole Proprietorship or partnership. A Sole Proprietorship falls under the Partnership and Business Names Law, being essentially similar to the English sole partnership. It is subject to broadly the same rules as a General Partnership. A sole proprietor has unlimited liability for his debts, is taxed under the personal income tax regime, and any business name (other than his own) must be registered with the Registrar of Partnerships.
A General Partnership must be registered with the Registrar of Partnerships within one month of formation, giving name, purposes place of business, full particulars of the partners and so forth. There are no restrictions on foreigners being part of a partnership. A general partnership may contain between 2 and 20 partners. There is no requirement for a general partnership to file accounts or to have audits carried out. Each partner has unlimited liability for the partnership’s debts and obligations.
A Limited Partnership may have one or more general partners with unlimited liability and one or more partners whose liability is limited to the amount declared in the partnership agreement.
For either form of partnership, it is advisable to have a partnership agreement drawn up and this should be notarised and translated into the language required by the authorities (Greek or English).
Other business forms (likely to be of less interest to a individual small business or entrepreneur, however) include:
- Private Limited Company limited by shares;
- Public Company Limited by shares;
- Company Limited by guarantee. (This type of business structure is normally associated with charitable or non-profit making entities, as is the case in the UK.)
- Branch of an Overseas Company.
The Terms 'Freelance', 'Sole Trader' and 'Self-Employed'
The term self-employed normally refers to small traders, either a sole proprietor (sole trader) or those who are members of a partnership. Freelance workers are also normally self-employed, but can work under term contracts for companies. For purposes of tax, the terms are interchangeable. The difference from a tax point of view would be where the business is incorporated, representing a separate tax entity.
This article is an extract from Personal Business Tax Guide , dated 4th January 2011, for the latest version please click here .