The “Austrian Limited” – a revolutionary put to the test
In order to make Austria more attractive as a business location for start-ups and foreign (start-up) investors in international competition, the government program 2020-2024 provides for the creation of a new type of corporation. It is known under the working title “Austrian Limited”. An “unbureaucratic foundation” including “flexible allocation of shares” is planned. The planned reform of corporate law is therefore just around the corner – although further details have yet to be discussed.
Quick, easy and inexpensive
The foundation of the “Austrian Limited” is to be “quick, easy and inexpensive”. In order to facilitate access to the “Austrian Limited” for international founders and investors, a digital foundation will also be possible. The minimum nominal share capital will be EUR 5,000, with at least EUR 2,500 paid in cash upon incorporation. The rest can be provided through contributions in kind or services. So far so good. Apart from the fact that it is difficult to run a company with EUR 5,000 equity, services are hardly suitable contributions in kind.
Written agreements between the parties are sufficient for the assignment of shares (as is already the case under Swiss GmbH law). More flexible capital measures (which are to be welcomed) are also planned, so that the “Austrian Limited” has both authorized and conditional capital at its disposal.
The waiving of formal requirements is completely new territory: Formation is to be possible without a notarial deed, and the contents of the articles of association are no longer to be reviewed by the Commercial Register Court. In general, simple written form will be sufficient for all documents, declarations, resolutions and applications to the commercial register. Circular resolutions will no longer be only permissible if everyone agrees to them or takes part in them; an e-mail to all shareholders concerning the announcement of the initiation of a written resolution is to suffice here. The “Austrian Limited” is to be entered into the commercial register, but not its shareholders; instead, a share register with the relevant data is to be kept. Since this affects the legal certainty, this point in particular has met with massive criticism and also represents a contradiction to the government program, which stipulates that Austrian transparency standards be maintained.
It is also remarkable that all applications to the commercial register as well as the articles of association can be written in English. In view of international competition, this is certainly interesting, but currently not in line with Art 8 (1) B-VG, according to which German is the national language.
Outlook: Austrian Limited and much more
Some points of the envisaged “Austrian Limited” have already met with criticism. It would be desirable if some rules, which are considered good, were also adopted for the regular GmbH. It is certain that there will be more extensive changes in company law – the details remain to be seen. However, the “Austrian Limited” is only one of several new company forms currently under discussion. Also a ” KG mbH” as the successor to the GmbH & Co KG (which is intended to smooth the transition from partnerships to corporations) as well as an unlisted “Flex AG” (a combination of the lean and flexible structure of the GmbH on the one hand and the simple share transfer of the AG on the other) are being discussed.
This article is for general information only and does not replace legal advice. Haslinger / Nagele Rechtsanwälte GmbH assumes no liability for the content and correctness of this article.
5. July 2021
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