Joint and Several Liability for Company Debts under Recent Greek Council of State Case Law

The personal and joint and several liability of company officers, members of management bodies and partners for corporate debts is one of the most important issues in the field of tax, social security and business disputes in Greece. In practice, chairpersons of boards of directors, legal representatives, managers, former general partners, or individuals who have at some point held a form of corporate representation may find themselves facing individual payment notices, tax collection assessments and enforcement measures for debts that were not incurred by them personally, but by the company.

The judgments of the Greek Council of State in cases CoS 2474/2025 and CoS 2482/2025 are of particular interest. Both concern related issues of personal liability for company debts and confirm that such liability cannot be extended without limits. On the contrary, personal liability requires a clear statutory basis, a specific legal capacity of the individual concerned, and a strict interpretation of the provisions that allow corporate debts to be pursued against third parties.

Liability of General Partners for Social Security Contributions and Limitation Periods

In CoS 2474/2025, the Greek Council of State examined a case concerning the liability of former general partners for a company’s social security contributions.

The appellants had been general partners in a Greek general partnership for a short period of time and were subsequently converted into limited partners. Many years later, they received individual payment notices from the Greek Centre for the Collection of Social Security Debts (KEAO) requiring them to pay the company’s outstanding social security contributions, on the basis of their former capacity as general partners.

The key legal issue was whether, in such circumstances, the special five-year limitation period under Article 64 of the Greek Commercial Law applied, and whether that limitation period could be interrupted by acts concerning the company itself or another partner.

The Council of State held that the personal liability of a general partner for debts owed by the company to a social security fund is not independently founded on social security legislation. Rather, it derives from the rules of commercial law governing the liability of general partners. Accordingly, the special protective provision of Article 64 of the Greek Commercial Law, which provides for a five-year limitation period, also applies.

According to the Court, that five-year period begins from the withdrawal of the general partner or, as the case may be, from the conversion of that partner’s status into that of a limited partner. Equally important, the interruption of the limitation period must have occurred specifically in relation to the particular partner concerned. It is therefore not sufficient that the company entered into a debt settlement arrangement, or that enforcement measures were taken against another partner.

This finding is of substantial practical significance for former general partners who are pursued, many years later, for social security or other company debts. Previous participation in a partnership does not mean that liability remains unlimited in time, especially where corporate changes, withdrawal from the partnership or a change in the partner’s legal status have intervened.

Chairperson of the Board of Directors of a Greek Société Anonyme and Joint Liability for VAT Penalties

In CoS 2482/2025, the Greek Council of State dealt with a different, but related, form of personal liability for corporate debts. The case concerned the chairperson of the board of directors of a Greek société anonyme, who had been called upon to pay company debts arising from VAT penalties imposed in connection with allegedly fictitious invoices.

The issue was whether the capacity of chairperson of the board of directors, combined with the assignment of duties to represent the company before the tax authorities, was sufficient to establish personal and joint and several liability.

The Council of State answered this question in the negative. It held that provisions imposing joint and several liability must be interpreted strictly, because they constitute an exception to the principle of the separate legal personality of the company and to the general rule that each person is liable for their own debts, not for the debts of another.

According to the judgment, chairpersons of boards of directors of Greek sociétés anonymes are not, by that capacity alone, included in the exhaustively defined category of persons who may be held jointly and severally liable for VAT debts and related penalties. In order for personal liability to arise, the individual must hold a specific statutory capacity, such as that of director, manager, managing director, liquidator or legal representative, as specifically provided by law.

Of particular importance is the Court’s finding that the assignment of specific representation duties before the tax authorities is not, in itself, sufficient to render the chairperson of the board personally liable for the debts of the company, unless it is established that one of the exhaustively listed capacities giving rise to joint and several liability had in fact been assigned to that person.

Common Direction of the Judgments: No Automatic Extension of Personal Liability

The two judgments concern different factual circumstances and different types of companies. The first concerns general partners and social security contributions, while the second concerns the chairperson of the board of directors of a société anonyme and VAT penalties. Nevertheless, they convey a common message: personal liability for corporate debts cannot be imposed automatically.

The administration — whether the tax authority or the social security authority — must establish with precision:

• the statutory basis of the personal liability;
• the exact legal capacity of the individual concerned;
• the period during which that capacity existed;
• whether the relevant claim has become time-barred; and
• whether specific acts interrupting or suspending the limitation period have taken place.

A general reference to a person as a “member of management”, “chairperson”, “representative” or “former partner” is not sufficient. Personal liability for company debts must be based on a specific statutory provision and on specific, proven factual circumstances.

Practical Significance for Entrepreneurs, Directors and Partners

The judgments CoS 2474/2025 and CoS 2482/2025 are highly relevant for entrepreneurs, board members, company managers, legal representatives, former general partners and individuals who have participated in corporate structures in Greece.

In practice, the service of an individual payment notice or the issuance of a tax collection assessment does not automatically mean that the claim is lawful or that the individual is indeed personally liable. In many cases, serious issues must be examined, including:

• whether the individual actually held the capacity relied upon by the administration;
• whether that capacity existed at the relevant time;
• whether the company debt relates to a period during which the individual bore responsibility;
• whether the limitation period has expired;
• whether there has been a lawful interruption or suspension of the limitation period; and
• whether the acts of the administration are specifically and sufficiently reasoned.

This is particularly important in cases involving tax penalties, VAT, allegedly fictitious invoices, social security contributions, debts to the Greek e-EFKA, individual payment notices, tax collection assessments and compulsory enforcement measures.

Legal Approach

Defending against acts by which corporate debts are pursued against individuals is often a matter of detail and timing. The company’s articles of association, amendments to those articles, minutes of board meetings, the actual exercise of management powers, the date of withdrawal or change in corporate capacity, notifications, debt settlement acts and enforcement measures may all be decisive.

For this reason, every individual payment notice relating to company debts should be reviewed immediately and with specialist legal attention. Timely legal assessment may lead to the annulment of the act, recognition that the claim is time-barred, or limitation of the individual’s personal liability.

Conclusion

The judgments CoS 2474/2025 and CoS 2482/2025 point towards a reasonable limitation of personal and joint and several liability for company debts in Greece.

The capacity of chairperson of the board of directors, previous participation in a partnership, or the assignment of certain representation duties is not always sufficient to establish personal liability. Instead, an individualised assessment is required, covering the statutory basis of liability, the relevant corporate capacity, the time at which the debt arose and the applicable limitation rules.

As part of its work in complex business disputes, Papatriantafyllou & Thanasenari closely monitors developments in Greek case law concerning the personal liability of company officers, partners and entrepreneurs. The firm provides targeted legal support in complex personal liability disputes arising from corporate, tax and social security debts.