Legal obligations for businesses: What you need to know
Understanding the fundamental legal requirements is essential for every entrepreneur. Compliance with the law protects your business from fines, ensures its long-term sustainability, and facilitates smooth operations.
1. Business registration & Legal structure
Starting a business requires specific legal steps, from registering with the General Commercial Registry (GEMI) to selecting the appropriate legal form.
Business formation
Registration with GEMI: Mandatory for all businesses.
Tax identification number (ΤΙΝ, known as AFM in Greece): Issued by the relevant tax office and required for all business transactions.
Declared business address: Can be physical or virtual, depending on the business type.
Business bank account: Necessary for transactions and tax compliance.
Choosing the right legal structure
Sole proprietorship (SP): Ideal for freelancers and small businesses with low startup costs but full personal liability.
General partnership (GP): Requires at least two partners, who share unlimited liability for business debts.
Limited partnership (LP): A mix of partners with unlimited and limited liability.
Limited liability company (LLC):
Suitable for small-to-medium enterprises, offering limited liability.
Private capital company (PCC): Offers flexible capital requirements and limited liability.
Public limited company (PLC): Designed for larger businesses with shareholder capital and limited liability.
Tip: Choose your business structure based on its size, tax implications, and risk exposure.
2. Tax obligations
Tax compliance is crucial for smooth business operations and protection from fines or legal consequences.
Filing tax returns
All businesses must file an annual income tax return (by June 30).
Value Added Tax (VAT) – registered businesses must submit monthly or quarterly VAT returns depending on their tax regime.
Accounting records
Single-entry bookkeeping: Suitable for small businesses, tracking income and expenses.
Double-entry bookkeeping: Required for businesses with an annual turnover exceeding €1.5 million, ensuring detailed financial reporting.
Social security contributions
Self-employed individuals and employers must pay social security contributions to the Greek Social Security Fund
(EFKA, Greece’s national insurance system), calculated based on income.
Special tax considerations
Withholding tax for payments to contractors or suppliers.
Industry-specific taxes (e.g., tourism, tobacco, alcohol).
EU cross-border transaction reporting
for businesses trading within the EU.
Tip: Work with an accountant or tax advisor to ensure compliance and take advantage of tax incentives or subsidies.
3. Employment law compliance
If you hire employees, you must adhere to specific legal obligations regarding contracts, wages, working hours, and social security.
Employer responsibilities
Employment contracts: All agreements must be in writing and filed with relevant authorities.
Salaries & leave: Wages must align with legal requirements and collective agreements.
Working hours & overtime: Must be recorded and properly compensated.
Employee insurance: Registration with EFKA and contribution payments are mandatory.
Workplace health & safety: Compliance with legal safety standards, including mandatory health and safety officers in some industries.
Tip: Effective HR management improves workplace culture and prevents legal disputes.
4. Environmental regulations
Environmental compliance is not just a legal requirement—it promotes sustainable business growth and enhances your company’s reputation.
Key environmental responsibilities
Waste management: Businesses must properly collect, store, and dispose of waste in accordance with regulations.
Energy efficiency: Companies should adopt sustainable practices to reduce energy consumption.
Permits & licenses: Certain business activities require environmental permits.
Tip: Compliance with environmental regulations can unlock funding opportunities and green investment benefits.
5. Data protection & GDPR compliance
Under the General Data Protection Regulation (GDPR), all businesses handling personal data must follow strict privacy and security protocols.
Key GDPR requirements
Lawful data collection & storage: Businesses must obtain user consent and provide clear data usage information.
Data security: Measures like encryption, restricted access, and firewalls must be in place to prevent breaches.
- User rights: Individuals have the right to access, correct, and delete their data.
Tip: Non-compliance with GDPR can result in severe fines and reputational damage.
6. Managing legal disputes
Despite best efforts, legal disputes may arise with customers, suppliers, or business partners. Preventative measures can help mitigate risks.
Best Practices for legal protection
Written contracts: Ensure all agreements are documented in detail.
Alternative dispute resolution: Consider mediation or arbitration before pursuing legal action.
Legal counsel: Consult with a business lawyer to proactively address legal risks.
Tip: Proper legal planning minimizes costly disputes and safeguards your business.
Industry-specific licenses & Regulations
Depending on your business sector, you may need special licenses to operate legally.
Food & Hospitality: Health permits, fire safety checks, and hygiene compliance.
Healthcare & Wellness: Professional practice licenses and regulatory compliance.
Manufacturing & Trade: Product labeling standards, quality controls, and safety certifications.
Tip: Research licensing requirements in advance to avoid delays and legal complications.
Useful Business Templates
A template used to identify the difference between the current and the desired state, identifying improvement actions.
A template for evaluating employees' performance, recording skills, achievements, and areas for improvement.
A structured plan outlining how your business will promote, sell, and deliver its products or services to meet revenue goals.
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