2.6 Flexible Company (FlexKapG/FlexCo) Currently there are plans to establish a new legal structure, the Flexible Company ( FlexCo ). The law is going to come into force as of November 1, 2023. This new legal form is fundamentally based on the GmbH law but has additional structuring options - for example in the area of capital measures - which in the past were reserved for joint-stock companies. Therefore, the FlexCo can be seen as a hybrid form of the limited liability company ( GmbH ) and the joint-stock company ( AG ). Further information is not known yet. 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. All applications to the Commercial Register ( Firmenbuch ) must be notarized. The limited liability company demands a minimal amount of stock capital of EUR 35,000 (in the case of a Privileged Formation, EUR 10,000) and the joint-stock company EUR 70,000. Furthermore, there are certain criteria as to how the stock capital must be composed. Generally, a company comes into legal existence upon its registration in the Commercial Register ( Firmenbuch ). Sole proprietorships do not have to be registered unless they exceed a certain business turnover of more than EUR 700,000 in two consecutive years or more than EUR 1.000,000 in one year. Insurance Requirements: Within the first month the managing directors ( Geschäftsführer ) ( GmbH ) or partners ( OG, KG ) must be registered with the Commercial Social Insurance Fund. Before employing anyone, a notification must be sent to the Regional Medical Insurance Company ( Gebietskrankenkasse ). Also, within the first month the commercial activity must be reported to the local fiscal authorities to receive a taxpayer identification number.

ILN Corporate Group – Establishing a Business Entity Series

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