Publicity and Legality Control of Board of Directors Formation Minutes by the General Commercial Registry (G.E.MI.)

Legal Insight

November 2024

Anta Tsogia, LLM (mult.)

Summary: This paper examines the publicity and legality control of acts related to the formation of Boards of Directors (BoD) of Société Anonymes (S.A.) by the competent service of the General Commercial Registry (G.E.MI.), based on the current legislative framework (Laws 4548/2018 and 4919/2022). It highlights the importance of publicity for transparency and the protection of stakeholders, as well as the legal consequences depending on whether the publicity has a constitutive or declaratory nature. The procedure for registering and publishing changes in the management of an S.A., the content and limits of the legality and completeness checks carried out by the G.E.MI. services, and the actions available to interested parties in case of rejection or delay in processing a registration request are also described.

1. Introduction – Nature and Consequences of Publicity in G.E.MI.

Articles 12–14 of Law 4548/2018, as well as Law 4919/2022 on G.E.MI., primarily regulate the publicity of the information and acts of S.A.s. The publicity system contributes to promoting transparency in corporate affairs, aiming mainly to protect third parties (shareholders or others) who transact with the company. Within this context, public access is provided to significant information concerning the S.A. and its corporate acts (e.g., statutory provisions, personal details of those who represent and bind the company, financial results, and the company’s assets, as well as significant events like capital increases/decreases, changes in its structure and organization, etc.).

Depending on whether the publicity of an act/information is designated by law as having a constitutive or declaratory (confirmatory) nature, different legal effects arise (Articles 17–19 of Law 4919/2022). When publicity is constitutive, the publication is necessary for the validity of the relevant act. In cases where publicity is merely declaratory, failure to publish does not affect the validity of the act. However, it is essential for the S.A. to invoke the act against third parties (unless it proves that third parties knew of it despite the lack of publication) and for third parties to rely on the published information against the S.A., which cannot dispute its validity.

2. Publicity of Changes in Company Management/Representation and Their Consequences

According to Article 12 § 1(c) of Law 4548/2018, publicity in G.E.MI. is mandatory for, among other things, "the appointment and termination for any reason, with identity details, of persons who: (a) manage the company, (b) have the authority to represent it jointly or individually...".

In practice, the minutes of the BoD formation are published in G.E.MI., along with personal identity details (Article 33 § 2 of Law 4919/2022) and the position of each member (e.g., chairperson, vice-chairperson, BoD member, executive director, etc.). Changes to these roles must also be publicized. It is noted that the term "managers and representatives of the company" includes not only BoD members but also all persons to whom general managerial and representative authority has been delegated as substitute bodies (Article 87 of Law 4548/2018). Furthermore, upon termination of these individuals (excluding the expiration of their term, which has already been published during their appointment/election), the termination reason (e.g., resignation, dismissal) must be published.

Publicity in cases of changes in company management/representation is declaratory (Articles 17–19 of Law 4919/2022). As such, the acts of election, appointment, or termination of these persons are valid even without registration and publication in G.E.MI. Therefore, even if registration and publication have not yet occurred, these acts (e.g., a General Assembly decision electing BoD members) are valid, with legal consequences arising concerning their effect on third parties. Practically, individuals assume their positions immediately upon election or appointment without requiring the formalities of publicity to be completed. A notable case is Decision No. 47/2020 of the Piraeus Single-Member Court of Appeal, which held that a lawsuit on behalf of an S.A. was validly filed by the elected BoD, even though the General Assembly's decision and the BoD formation minutes had not yet been published in G.E.MI.

3. Legality Check – Scope of Review

Under Article 26 § 2 of Law 4919/2022, "From the automatic registration and publication of acts and information... are excluded... the registration applications regarding the appointment of BoD members of S.A.s and the designation of its legal representatives." Despite the declaratory nature of publicity in such cases, the competent G.E.MI. service conducts a legality and completeness check before proceeding with publication (Article 25 of Law 4919/2022).

The "legality check" is limited to verifying compliance of the content of acts, information, and declarations with the provisions of the company’s Articles of Association and mandatory provisions governing S.A.s (Article 3(b)(i)(z) of Law 4919/2022). Notably: a) The legality check does not extend to other laws beyond the mandatory provisions governing the legal entity (S.A.).

b) Issues of invalidity of the relevant acts are not reviewed.

c) Legality review must not become a review of appropriateness.

d) Though accuracy and clarity are not explicitly listed as criteria for registration, contradictory or vague records may be deemed illegal.

The "completeness check" ensures that the application is accompanied by all required supporting documents without examining their content.

4. Registration, Publication, and Review Process by G.E.MI. Services

a) Submission of Application

Obligated entities (the S.A.’s BoD) must submit a registration application to the competent G.E.MI. service, attaching proof of authorization and the required supporting documents, along with the prescribed fees (Article 49 of Law 4919/2022). Applications must be submitted within 20 days from the decision necessitating publicity.

b) Processing

Upon receiving the application, the G.E.MI. service must, without undue delay (and within ten days), log the application, check deadlines, and conduct completeness and legality reviews.

c) Request for Clarifications

If deficiencies are found, the G.E.MI. service may request clarifications, corrections, or supplementary documents within seven days, temporarily suspending the review process.

d) Consequences of Non-Compliance

If the deadline passes without compliance or submissions remain incomplete, the application is automatically canceled, and fees are forfeited.

5. Rejection and Legal Remedies

In cases of rejection or inaction by G.E.MI. services within the statutory 21-day limit, obligated parties may: a) Seek judicial protection (Article 32 of Law 4919/2022).

b) Submit a request to the Department of General Commercial Registry and One-Stop Services.

6. Conclusion

Publicity and legality control in G.E.MI. are crucial for transparency and security in transactions involving S.A.s, particularly regarding lawful representation. However, these processes must be conducted promptly within statutory deadlines and limited to the legally required scope to avoid unnecessary operational delays.