Corporate & Company Law

That depends on liability, capital requirements, the shareholder group, tax burden and planned growth. In Austria the GmbH is the standard vehicle for entrepreneurial activity with limited liability; the OG and KG are partnership-based and possible without minimum capital; the FlexKapG (FlexCo), introduced in 2024, is aimed primarily at start-ups with employee participation; the AG is an option for larger structures with proximity to the capital markets. We review the options together with your tax adviser so that the legal and the tax perspective align.

Since 1 January 2024 the minimum share capital of a GmbH has been EUR 10,000, at least half of which must be paid in cash. The previously available founding-privileged GmbH has consequently been abolished. For existing companies, an amendment of the articles of association may be advisable – we assess whether this creates a need for action in your case.

A managing director owes the company the diligence of a prudent businessperson (§ 25 GmbHG). Personal liability arises above all from a breach of this duty of care, from filing for insolvency too late, from unpaid taxes and social security contributions, and from breaches of the rules on capital maintenance. A clear allocation of responsibilities, documented decisions and suitable D&O insurance noticeably reduce the risk.

The articles of association are publicly available in the Austrian companies register (Firmenbuch) and set out the basic constitution of the company. A supplementary shareholders' agreement (syndicate agreement) remains confidential and can cover matters that have no place there: voting arrangements, pre-emption and tag-along rights, non-compete undertakings, succession and exit scenarios, and rules for the event of conflict. It is precisely such precautionary clauses that prevent costly disputes later on.

Succession touches company law, inheritance law and tax law at the same time. Points to clarify include the transferability of shares under the articles of association, call-option and settlement provisions, financial protection for the person handing over the business, the employment law consequences of a transfer of the undertaking, and alignment with the will and the compulsory portion. We recommend setting up the process several years before the intended handover.

Yes. The single-member GmbH is permissible and common: one shareholder, who can also be the managing director, establishes the company by notarial deed; under certain conditions the simplified electronic formation is available as well. Points to consider are the issue of self-dealing in transactions with yourself, social insurance as a managing shareholder, and whether a GmbH is actually the better choice compared with a sole proprietorship in tax and organisational terms – we work that out together with your tax advisers.

Beyond the mandatory content, above all provision for the situations nobody wants to think about at formation: transfer restrictions and call options for when a shareholder wants or has to sell; a valuation clause that makes the settlement price calculable; tag-along rights and obligations; rules for deadlock situations and for removing managing directors; non-compete undertakings; and a procedure for the event of a dispute. Without this, the default statutory provisions apply – and these almost never fit the actual circle of shareholders.

Shares in a GmbH are inheritable – without contractual provision, the heirs suddenly find themselves in the company, possibly a community of heirs with no knowledge of the industry. The articles of association can steer this: with call options for the remaining shareholders against a settlement payment, succession clauses in favour of specific persons, and valuation rules. What matters is alignment with the will and the compulsory portion – the articles of association and the will must not contradict each other. In practice, this alignment is what is missing most often.

There is no general statutory right of withdrawal – the route is the sale of the share, which requires a notarial deed and is often tied by transfer restrictions to the consent of the co-shareholders. Beyond that, the call and termination rights provided for in the agreement come into consideration, and in exceptional cases withdrawal or exclusion for good cause through the courts. How smoothly the exit runs is decided almost always by what was agreed at formation – or was not.

If the articles of association make no provision, the only option is an action for exclusion for good cause – a lengthy route with high requirements for reasoning and evidence. Robust articles of association therefore set out call options together with trigger events such as insolvency, death, serious breach of duty or loss of a professional licence, plus a valuation procedure and the payment terms. Anyone who only negotiates these points once conflict has broken out negotiates from the weaker position.