[ESTABLISHING A BUSINESS ENTITY IN AUSTRIA]
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meeting in compliance with the Articles of Association of the company and the applicable laws. They must not disclose sensitive and confidential information to third parties, and they may be held personally liable for all damages caused by breaches of these obligations. Moreover, they usually must abide to a non-competition clause, which is normally part of their employment contract. As already mentioned, for joint-stock companies ( AG ) a dualistic model is compulsory. 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 Board of Directors ( Vorstand ) must also prepare the financial statements, which must be approved by the Supervisory Board ( Aufsichtsrat ) and then presented to the General Meeting ( Hauptversammlung ). 4.2 Audit requirements In the first five months of the financial year, limited companies and hidden limited companies ( GmbH & Co KG ) must prepare and submit the annual financial statements, together with the accompanying notes, a management report and, if applicable, a corporate governance report (e.g. large joint- stock companies) and a report on payments to government agencies for the preceding financial year, to the members of the Supervisory Board ( Aufsichtsrat ) (if there is one). In the following cases a statuary audit is mandatory:
Joint-stock companies
•
Banks,
insurance
companies
and
•
investment funds
• Large and medium sized limited liability companies In comparison, small and very small companies are only obliged to submit limited financial information to the Commercial Register ( Firmenbuch ). A company is considered “ small ”, if at least two of the following criteria are met:
• Total assets are lower than EUR 5 million
Turnover is below EUR 10 million
•
• Average number of employees is less than 50 A company is considered “ medium-sized ”, if at least two of the following criteria are met: • Total assets are between EUR 5 million and 10 million • Turnover is between EUR 10 million and 40 million • Average number of employees is between 50 and 250 A company is considered “ large ”, if two of the above-mentioned criteria are exceeded (total assets exceed EUR 10 million, turnover exceeds EUR 40 million and average number of
employees exceeds 250). 4.3 Minority shareholder
rights
and
protection The rights of minority shareholders shall be briefly outlined in this chapter on the basis of the legal framework regarding the limited liability company ( GmbH ). Shareholders are entitled to the following minority rights, depending on the percentage of equity held:
ILN Corporate Group – Establishing a Business Entity Series
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