[ESTABLISHING A BUSINESS ENTITY IN AUSTRIA]
40
partnerships, residents and non-residents, Austrian and foreign citizens, as well as foreign corporations. The GmbH is represented externally by one or more managing directors who are bound by the shareholders' instructions. The contract between two or more founders of a limited liability company is called Articles of Association ( Gesellschaftsvertrag ). In the case of a sole-shareholder company, the articles are referred to as Declaration of Establishment ( Errichtungserklärung ). Both documents must be certified by a notary public by means of a notarial deed. The Gesellschaft mit beschränkter Haftung ( GmbH ) comes into legal existence upon its registration in the Commercial Register ( Firmenbuch ). Since January 1, 2024, the minimum share capital of a limited liability company is EUR 10,000 (no longer EUR 35,000). At least half of the share capital (EUR 5,000) must be paid in cash when the company is founded (exception: going concern and contributions in kind). Since the transfer of shares in a GmbH is more difficult (a notarial deed is required) than that of stock in a stock company ( AG ) the GmbH is less suitable if a widespread ownership or the frequent transfer of shares is desired. The legal form of the GmbH is very similar to that of the FlexCo, which was only recently established by the legislator on the basis of the GmbH (re FlexCo see below). However, due to its long existence, the GmbH has a large body of case law and is therefore still of interest to many entrepreneurs as a “classic” company form. 2.2 Joint-stock company (AG) The joint-stock company or Aktiengesellschaft ( AG ) is similar to the Gesellschaft mit beschränkter Haftung ( GmbH ) and the second legal form of a limited company in Austria. The Aktiengesellschaft ( AG ) is an independent legal
entity and possesses rights and obligations of its own. The shareholders of an AG are only personally liable for unpaid share capital, or in the case of malevolence of the shareholder. In comparison to the GmbH , the establishment of a joint-stock company is more complicated and more expensive. An AG may be set up by one or more natural persons or legal entities. In the case of a sole founder, it is required to register the sole- shareholder’s name in the Commercial Register ( Firmenbuch ). The Articles of Association must be certified by a public notary by means of a notarial deed. The formation procedure is subject to stricter formal requirements compared to the GmbH . The minimum stock capital of an Aktiengesellschaft ( AG ) is EUR 70,000. At least one quarter of the said amount must be paid in during the company’s formation. The AG comes into legal existence upon its registration in the Commercial Register ( Firmenbuch ). In comparison to the GmbH, the AG is structured after a so-called dualistic model. This means that the General Meeting ( Hauptversammlung ) appoints a Supervisory Board ( Aufsichtsrat ) with at least 3 members and the Supervisory Board appoints the Board of Directors ( Vorstand ). The directors are appointed for a maximum term of 5 years but may be reappointed after their term has ended. Contrary to the managing directors of a GmbH , members of the Board of Directors ( Vorstand ) of a joint-stock company ( AG ) are not subject to instructions by the General Meeting or the Supervisory Board in their normal course of business. The most significant advantage of the Aktiengesellschaft ( AG ) compared to the GmbH is the easier transferability of company shares and their tradability on the stock market.
ILN Corporate Group – Establishing a Business Entity Series
Made with FlippingBook Ebook Creator