New Legal Form for Startups in Austria

Things are moving in Austrian corporate law.

The recently presented startup package introduces the flexible company, or #FlexKapG, as a new form of limited liability company in Austria, with the aim of making Austria a more attractive location for founders.

The draft was published on 30 May 2023 and is expected to enter into force on 1 November 2023.

We have summarised the key changes for you below:

• Reduction of the minimum share capital of a GmbH from EUR 35,000 to EUR 10,000, of which at least EUR 5,000 must be paid in cash upon formation.
• Corporate-law employee participation through a new class of shares. The reform opens the door to issuing company-value shares amounting to up to 25% of the share capital. These shares confer participation rights, but no voting rights in the general meeting. Key features of employee equity participation include a flat tax rate, as well as benefits regarding social security contributions and ancillary wage costs. A “startup employee participation” arrangement requires, among other things, that the company remain below a certain size:
  • no more than 100 employees;
  • turnover of no more than EUR 40 million;
  • less than 10 years old.
• Facilitation of circular resolutions: the articles of association may provide that unanimous consent of all shareholders is not required for written voting and that compliance with text form is sufficient.
• Capital measures comparable to those available for stock corporations: conditional capital increases and authorised capital.
• Transfers of shares and subscription declarations may also be made by attorney’s deed.
• The acquisition by the company of its own shares will now be permitted up to one third of the share capital.
• Simpler conversion into a stock corporation or a GmbH.