UPDATE: Flexible Capital Company (FlexKapG) / Flexible Company (FlexCo)

In May, we already informed you about the then ministerial draft of the Corporate Law Amendment Act 2023. The ministerial draft provided, in particular, for a new form of company, the Flexible Corporation, which was actually supposed to come into effect on November 1st, 2023. The government bill is now available (after a short delay). It is to be passed in the National Council during the last plenary session of the year (12/13/2023,12/14/2023). The current scheduled effective date is January 1st, 2024.

The Flexible Corporation is a new (capital) company form (based on the GmbH; limited liability company) that will be of particular interest to start-ups and companies with employee shareholdings. The Flexible Corporation (also referred to as FlexCo) has two types of shares:

• “Classic” business shares and
• “Enterprise value shares”: These allow third parties (e.g., employees) to participate in the company. Enterprise value shareholders are thus entitled to their share of the balance sheet profit and the liquidation profit. However, (with a few exceptions) they have no voting rights in the General Assembly.

There have been no further changes to the main innovations of this company form.

In summary, the key points of the FlexKapG:

• Expected entry into force on 01/01/2024.
• Compared to the GmbH, “form-free” transferability of shares:
• No notarial deed is required for the transfer of “classic” business shares. A deed drawn up by a lawyer is sufficient for a transfer.
• For the transfer of enterprise value shares, the written form is sufficient (neither the form of a notarial deed nor a lawyer’s deed are required).
• More “informal” capital increases:
• The government bill provides that in the case of a capital increase, the exercise of subscription rights no longer necessarily requires a notarial deed, but (like the transfer of shares) a deed from a lawyer is sufficient.
• Minimum share capital of EUR 10,000.00 (also applies to the GmbH in the future).
• Minimum nominal amount of shares of the enterprise value shares is one cent.
• For each capital deposit to be paid in cash, only an amount of EUR 1.00 must be paid (as opposed to the EUR 70.00 for the GmbH).

The advantage for you is, among other things, that a more flexible legal form is expected to be created on January 1st, 2024, in which share transfers and capital increases can be carried out in a time-efficient and more cost-effective manner. This will be of particular interest for the start-up sector.

Are you interested in the Flexible Corporation? Would you like to find out more about this type of company? Our Commercial and Corporate Law team will be happy to assist you.

Disclaimer

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.

 

28. November 2023

 

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