{"id":4428,"date":"2026-05-20T15:54:35","date_gmt":"2026-05-20T12:54:35","guid":{"rendered":"https:\/\/pathlawfirm.gr\/en\/?p=4428"},"modified":"2026-05-20T15:55:17","modified_gmt":"2026-05-20T12:55:17","slug":"business-transfer-corporate-veil-piercing-greece","status":"publish","type":"post","link":"https:\/\/pathlawfirm.gr\/en\/business-transfer-corporate-veil-piercing-greece\/","title":{"rendered":"Court Victory in a Commercial Dispute Involving Business Transfer and Piercing of the Corporate Veil"},"content":{"rendered":"\t\t
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Business Transfer and Piercing of the Corporate Veil as Bases for Liability in Commercial Debt Claims<\/h2>\n\n

Papatriantafyllou & Thanasenari secured a significant court victory in a commercial dispute concerning unpaid debts arising from successive commercial transactions, the transfer of a business to another corporate entity, and the personal liability of an individual due to the misuse of the corporate form.<\/p>\n\n

The case is of particular importance for businesses, suppliers and creditors facing situations where a debtor transfers its business, as an economic unit, to another company. In practice, such cases may involve the transfer of the assets and operational elements that constitute a business, including key assets, organisational structure, clientele, goodwill, know-how and ongoing commercial activity.<\/p>\n\n

In such circumstances, substantially the same business may continue through a different legal entity. This does not necessarily mean, however, that the obligations of the company which transferred the business cannot also bind the acquiring company, nor does it mean that the creditor is left without legal protection.<\/p>\n\n

Background of the Case<\/h3>\n\n

Our client held claims arising from commercial transactions involving the sale of goods. The original debtor company received the goods but failed to fully settle the outstanding amounts owed.<\/p>\n\n

To protect our client\u2019s interests, we brought proceedings not only against the original debtor company, but also against the company which acquired the business, as well as against the individual who was substantively connected with the operation, management and control of the corporate entities involved.<\/p>\n\n

The Single-Member Court of First Instance of Piraeus, Greece, accepted the legal and factual basis of the claim and recognised the liability of the company that acquired the business. The Court also examined the issue of the individual\u2019s personal liability in light of the misuse of the corporate form.<\/p>\n\n

Liability of the Acquiring Company<\/h3>\n\n

A central issue in the case was the continuity of business operations. In practice, a debtor cannot simply transfer its commercial activity to another corporate vehicle and leave behind the obligations connected with the operation of that business.<\/p>\n\n

The Court accepted our argument that the company which acquired the business effectively continued the same commercial activity as the original debtor. The evidence identified, submitted and connected by our firm played a decisive role in this finding. This evidence included the similarity of the commercial activity, the continuation of operations, and the use of the goodwill, clientele and know-how of the previous business.<\/p>\n\n

On this basis, the Court held that the business of the debtor company had been transferred to the co-defendant company and that the latter was liable towards our client for the commercial debts of the transferor company, jointly and severally with it.<\/p>\n\n

Piercing the Corporate Veil and Personal Liability<\/h3>\n\n

The case was also particularly significant as regards the liability of an individual standing behind the corporate structures involved.<\/p>\n\n

As a general rule, a company has its own legal personality and separate assets. This means that its obligations are not automatically transferred to its shareholders, partners, directors or managers.<\/p>\n\n

However, separate legal personality is not protected where the corporate form is misused. Where a company is used as a means of avoiding obligations, frustrating the rights of third parties or creating an artificial separation without genuine economic independence, the issue of piercing or disregarding the corporate veil may arise.<\/p>\n\n

In the present case, the Court accepted our submissions and held that the individual exercised de facto control over the original debtor company, directed its commercial activity and managed the financial benefits arising from it.<\/p>\n\n

The Court also accepted that, through the company which acquired the business and in which that individual was the sole participant, the same commercial activity continued, and that the individual represented the company in a binding manner in its dealings with third parties.<\/p>\n\n

In light of these circumstances, the Court held that the use of the separate legal personality of the two companies was abusive and contrary to good faith in commercial dealings. The purpose of this structure was found to be the continuation of the commercial activity while avoiding personal liability towards third parties.<\/p>\n\n

Accordingly, the Court held that the principle of separate corporate personality had to yield, confirming the personal liability of the individual, jointly and severally with the two companies, for our client\u2019s claims.<\/p>\n\n

Importance of the Decision for Businesses and Creditors<\/h3>\n\n

This court victory is important for businesses, suppliers and creditors seeking to recover commercial debts.<\/p>\n\n

In many cases, a debtor may appear to cease its activity, transfer its business to another corporate structure, or continue the same economic activity through a different legal entity.<\/p>\n\n

This does not mean that the creditor is left without protection. On the contrary, where there are indications of a business transfer, continuity of business operations or misuse of corporate structures, it is essential to examine whether liability can be established against persons and entities other than the original debtor company.<\/p>\n\n

Our Firm\u2019s Approach<\/h3>\n\n

Papatriantafyllou & Thanasenari<\/strong><\/a> handled the case with the aim not only of obtaining judicial recognition of our client\u2019s claim, but also of expanding the circle of liability to the persons and business entities that were substantively connected with the continuation of the commercial activity.<\/p>\n\n

The case is a clear example of how careful analysis of the facts, corporate links and business continuity can lead to effective creditor protection and successful recovery of commercial debts through litigation.<\/p>\n\n

This court victory falls within the core of our practice in commercial and corporate disputes<\/strong><\/a>, where a strategic litigation approach is often decisive for the effective protection of the client\u2019s interests.<\/p>\n\n

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