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Family Businesses

Family businesses are the oldest form of entrepreneurial activity and, at the same time, the backbone of both the Greek and the global economy. They combine entrepreneurial dynamism and strategic decision-making with the values of family legacy, creating a unique—yet often complex—model of operation and governance.

The challenges arising in this context are multi-dimensional: balancing the interests of the family and the business, succession planning and transfer of ownership interests, shareholder conflicts, and other issues that may threaten the company’s stability and long-term sustainability, particularly as the business passes from one generation to the next.

Our Law Firm has specialized experience and in-depth expertise in corporate law, with a particular focus on family-owned companies, addressing issues that arise from imbalances of power among shareholders.

Indicative matters that may adversely affect a business and require sound legal guidance include the following:

Breach of the Duty of Loyalty: Shareholders—whether majority or minority—are required, in exercising their shareholder rights, to act in furtherance of the company’s corporate purpose. This includes refraining from actions such as competitive activities, breaches of confidentiality, conflicts of interest, or the initiation of unfounded legal proceedings.

Loan Tunneling: This refers to the unlawful extraction of company funds by a controlling shareholder, disguised as “temporary financial assistance” or similar arrangements.

Misappropriation / Breach of Trust by a Shareholder: Cases where a shareholder unlawfully appropriates company profits without a resolution of the General Meeting, or engages in management actions detrimental to the company’s assets and interests.

Shareholders’ Agreements: Agreements that supplement the company’s articles of association and regulate critical aspects of the company’s operation, such as non-compete obligations, allocation of roles, exit rights, and other governance matters. Unlike the articles of association—which govern the relationships of all shareholders—shareholders’ agreements bind only the contracting parties, thereby adding a personal and tailored dimension to the governance of a family business.

Defective Resolutions of the General Meeting: Both the law and the articles of association set strict requirements for the convening, composition, and decision-making process of General Meetings. Failure to comply may render resolutions invalid or voidable.

Minority Shareholder Rights (Ordinary and Enhanced): The exercise of rights such as requests for information or the appointment of a special audit, aimed at transparency and the protection of minority shareholders’ interests.

Conflict of Interests and Appointment of Interim Management: Situations where shareholders’ interests conflict with those of the legal entity itself, creating a risk of potential harm in connection with specific decisions or actions. In such cases, the court may, upon application, appoint interim management to ensure the company’s smooth and proper operation.

The Business Judgment Rule (BJR): Every corporate decision must constitute a reasonable business judgment, serving the company’s best interests and made in accordance with the principle of good faith. If this standard is not met, the company may bring a corporate action against a partner or shareholder for any act or omission that constitutes a breach of their duties.

Remuneration of Board Members: For family businesses in particular, it is essential to clearly separate the company’s finances from the personal finances of the entrepreneur. Accordingly, the establishment of a transparent remuneration policy and its formal approval by the General Meeting is of paramount importance.

Holding of General Meetings: Strict compliance with statutory and constitutional (articles of association) rules governing the convening and composition of General Meetings is crucial.
A common issue concerns the presence of a nominee or fictitious shareholder, who is not entitled to exercise shareholder rights or transfer shares. Participation of such a person in the General Meeting may render its resolutions defective or invalid.

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Family Businesses

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