[ESTABLISHING A BUSINESS ENTITY IN AUSTRIA]
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company's liabilities (“ principle of separation”). The provisions of the GmbH law apply as far as possible to the formation of a flexible company. The Articles of Association ( Gesellschaftsvertrag) must be certified by a notary public by means of a notarial deed. The flexible company comes into legal existence upon its registration in the Commercial Register ( Firmenbuch ). The minimum share capital for a flexible capital company (as for a limited liability company) is EUR 10,000, in which the shareholders each make at least one contribution. The amount of the contribution can be set independently and has no effect on the size of the shareholding. Accordingly, the capital contributions of the individual shareholders must amount to at least EUR 0,01 or EUR 1 and may not be reduced below this amount (in comparison, the capital contributions of the individual shareholders in a GmbH must be at least EUR 70). In the case of a GmbH, a notarial deed is required for the transfer of shares. This is not the case with FlexCo. It is sufficient for a notary or lawyer to draw up a deed of “transfer”. The introduction of company value shares represents a significant novelty in the company form ( Unternehmenswert-Anteile ). These are intended to create a so- called “corporate participation of employees” in the company's success. This is a special form of share capital. Company-value-shareholders only have very limited rights (comparable to shareholders of non-voting preference shares). They have no voting rights but are entitled to their share of the net profit. The written form is sufficient for the transfer of company value shares. Company value shares can only be issued to an extent that does not reach 25% of the share capital. Company value shares for employees are also tax-privileged to a certain extent.
2.7 Branch offices of foreign companies Foreign legal entities (i.e. sole proprietors, partnership entities and limited companies) may do business in Austria by establishing so- called branch offices ( Zweigniederlassungen ). This possibility is available to every foreign legal entity, also business entities from non- European countries. Although branch offices ( Zweigniederlassungen ) of foreign legal entities are required to be registered in the Commercial Register ( Firmenbuch ), they do not enjoy a separate legal personality. All obligations and liabilities of the branch office ( Zweigniederlassung ) constitute obligations of the respective foreign legal entity (business owner). If a branch office ( Zweigniederlassung ) is established for a foreign limited liability company or joint-stock company with its registered seat outside the EU/EEA, it is required to appoint a “permanent representative” for the Austrian branch. The “permanent representative” is obliged to have his ordinary/main residence in Austria. 3. Steps and Timing to Establish The necessary steps to establish any company form in Austria are similar in many ways, but there are a few differences for each type of business entity. The principal step of any formation proceeding is the conclusion of the so-called Articles of Association ( Gesellschaftsvertrag ) which determine inter alia the name, the seat of the company, its purpose as well as the rules governing the interaction of its shareholders. The company’s name must be suitable for its identification and must have a distinctive character. As already mentioned, for the foundation of a limited liability company and a joint-stock company a notarial deed is required.
ILN Corporate Group – Establishing a Business Entity Series
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