What is the main source of law authorising this entity form?

Austrian Act on Limited Liability Companies (GmbH Gesetz).

Give a brief summary of the entity form:

Does the entity possess separate legal personality?

A GmbH is a legal person.

(Maximum) period of existence

There is no maximum period of existence; usually the GmbH is incorporated for an indefinite period, but a limited period may be determined in the Articles of Association.

Governing document(s)

A GmbH is governed by its Articles of Association.

Liability of incorporators / shareholders

The shareholders in general are not personally liable for the liabilities of the company. There are exceptions for the payment of the shareholders' own capital contribution and a joint liability for the contribution of the other shareholders, [and]/[or] the refund of the contribution and gross undercapitalisation in cases of insolvency.

(Governing) bodies

The governing bodies are the shareholders' meeting (Generalversammlung), managing directors (Geschäftsführung) and the supervisory board (Aufsichtsrat) (legally required only under certain conditions but may be established voluntarily).

Other particularities

Can this type of entity be involved in international transactions and restructurings (e.g. cross border mergers, asset acquisitions and divestitures, equity acquisitions, conversions etc.)?

Yes, this entity can be involved in the acquisition of assets and equity etc. abroad.

International restructurings are subject to specific legislation (mergers within the EU) or pursuant to jurisdiction of the European Court of Justice (e.g. cross border relocations with change of legal form).

Can this type of entity be publicly listed or held, or its securities be issued to members of the public?

No.

Can this type of entity be used for a non-profit or charitable organization?

Yes.

Give a brief summary of the process of incorporation, formation, or organization, including:

Main documents required

Articles of Association;

Resolution [of?] appointing at least one (1) managing director;

Documents for registration at the Austrian Commercial Register (Firmenbuch); and

Shareholders frequently enter into a shareholders' agreement that sets out certain rights and obligations in relation to their shareholdings in the company.

Involvement of notary, company register, governmental authorities

The Articles of Association must be signed in the form of an Austrian notarial deed;

The GmbH must be registered with the Austrian Commercial Register (Firmenbuch) but comes into existence upon execution of the Articles of Association (notarial deed). The application to the Commercial Register must be notarised; and

Possibility of a simplified incorporation without the requirement of a notary if (i) there is only one (1) shareholder who must be a natural person and who is at the same time appointed as sole managing director of the company and (ii) the share capital is exactly EUR 10,000.

Timing (estimate)

Incorporation takes between a few days and a few weeks, depending on the complexity of the shareholder structure and the workload of the Commercial Register.

Main costs, including registration and similar fees (excluding legal fees)

The main costs are the lawyers/notaries fees. The company registration fee is about EUR 400.

Is a description of the anticipated business or purpose of the entity required for incorporation, formation or organization?

The corporate objects/purpose must be stated in the Articles of Association.

Minimum number of incorporators / shareholders and residency requirements

Minimum of one (1) shareholder, no residency requirements.

Minimum number of directors (or other applicable officers) and residency requirements

Minimum of one (1) managing director, no residency requirements.

Minimum share capital, or equivalent, and payment requirements (including opening a bank account)

Minimum share capital of EUR 10,000, of which at least 50% must be paid-up in cash upon incorporation. Contribution in kind is possible.

Is the physical presence of incorporators/directors/shareholders required in the jurisdiction for incorporation, formation, or organisation?

For the execution of the Articles of Association (notarial deed), the Shareholders must be either physically present or represented by notarised (and in case legalised, e.g. by an apostille) power of attorney. Alternatively, it is possible to execute the Articles of Association electronically using an electronic communication facility, i.e. video conference, attended by all signatories and the notary.

Managing director(s) must personally sign the registration application in notarised form; they cannot sign by proxy or otherwise have an agent sign on their behalf. However, it is possible that the managing director(s) sign abroad (in front of a foreign notary to certify the signature).

Is a tax identification number, or equivalent, required? If so, how is it obtained?

A tax identification number will be provided by the relevant tax authorities on incorporation. A VAT-ID will be provided by tax authorities upon request.

What is the title of the applicable company registry?

Commercial Register (Firmenbuch).

What types of information must be filed at the (company) register, and which of them will it be publicly available, e.g.: Articles or other formation document, Articles or other formation document, Group structure, Share capital, Directors, Accounts, Insolvency, good-standing, liquidation, Liens and encumbrances on the shares, Liens and encumbrances on assets of the entity, Other (e.g. litigation, tax matters)

• Legal form, recording that the entity is a GmbH.
• Registered office and the business address for deliveries.
• A short description of the GmbH’s business.
• Total amount of the issued share capital (Stammkapital).
• Effective date of annual financial statements (Stichtag für Jahresabschluss), which corresponds to the last day of the financial year.
• Articles of Association.
• Managing directors and their representation power.
• Other representatives of the GmbH (authorised signatories; Prokuristen), if any.
• Names of shareholders and their capital contributions.
• Insolvency proceedings.
• Liquidation.
• In addition, ultimate beneficial owners of Austrian legal entities (with some exceptions) must be registered with the Austrian UBO Register (Register der wirtschaftlichen Eigentümer) according to the provisions of the Austrian UBO Register Act (Wirtschaftliche Eigentümer Register Gesetz – WiEReG). The GmbH is obliged to identify and verify its ultimate beneficial owners and report the requested data to the register.

What is the title of the executive body and its members? What are their main duties, tasks and responsibilities?

Managing director(s) jointly or severally represent the company. Managing directors are responsible for all matters and obliged to act diligently and in the interests of the company in accordance with the objects as provided in the articles.

How are the members of the executive body appointed, dismissed and replaced?

Managing directors are appointed by shareholders' resolution (in a shareholders' meeting or by way of written resolution) or directly in the Articles of Association. They may be dismissed by shareholders' resolution.

Is it possible to appoint corporate directors or must all directors be natural persons?

No. All directors must be natural persons.

Is there a requirement to have non-executive directors? How are they appointed, dismissed and replaced? Do non-executive directors serve on a separate body (two-tier structure) or can a one-tier board (with executive and non-executives) be appointed, or is some alternate structure used?

It is possible to voluntarily appoint a supervisory board (Aufsichtsrat). However, that does not change the responsibility of the managing director(s). Depending on the number of employees, a supervisory board (including employee representatives) may be required.

What is the title of the body of owners / shareholders / members, and what are the main tasks / responsibilities / powers of that body?

The shareholders' meeting (Generalversammlung) has all rights and responsibilities provided to it by law and the Articles of Association and which are not imposed upon the managing directors or other bodies within the company. The shareholders may pass resolutions regarding the amendment of the articles, appointment and dismissing of managing directors, adoption of the financial statements, profit distributions, measures regarding the share capital (e.g. capital increases/reductions) and liquidation of the company. The shareholder's meeting has the right to instruct the managing directors but is not entitled to represent the company.

What are the majority and quorum requirements for decisions by the shareholders? Can they be varied or changed?

In general, resolutions of the shareholders' meeting can be passed by simple majority (>50% of the votes cast). Some measures require higher approval thresholds (e.g. 75% for the amendment of the articles of association). Different approval thresholds may be stipulated in the Articles of Association. Resolutions may also be passed outside of the shareholders' meeting by way of written (circular) resolution, if all shareholders (100%) agree to such resolution in writing.

Any special governance regimes (e.g. depending on size, being listed at a stock exchange, or other criteria)?

There is a legal obligation to appoint a supervisory board (Aufsichtsrat) if (i) the share capital exceeds EUR 70,000 and the number of shareholders exceeds fifty (practically rare) or (ii) the GmbH has more than 300 employees.

What are the periodic accounting obligations incumbent upon the entity? To whom must those accounts be submitted?

Annual financial statements must be arranged by the managing directors, and in case of mandatory audit requirements, audited, and approved by the shareholders (within eight (8) months after the end of the fiscal year). The financial statements must be filed with the Commercial Register.

Is the entity permitted to determine its own financial year?

Yes, to be determined in the Articles of Association.

Is the entity subject to any statutory (external) auditor obligations?

Yes, depending on the balance sheet total, turnover and number of employees.

Requirements to appoint other persons (officers, secretary, internal auditor / accountants). If so, what are their functions? Are there any residency requirements?

In order to carry out a trade (Gewerbe), the company must appoint a manager pursuant to applicable trade laws (Gewerberechtlicher Geschäftsführer). The manager is responsible for ensuring compliance with the applicable trade law provisions, as well as the professional conduct of its business.

Citizenship requirements: Austria, EEA signatory states, Switzerland, and other third countries with residence permit.
3 Residency requirements: Austria, Switzerland, or any EEA signatory state.

Depending on the industry in which the company operates, further responsible officers may be appointed (e.g. Data Protection Officer, Security Officer, Fire Safety Officer).

What is the title designated for 'ownership interests' (e.g. shares, quota, interests, membership)?

The title of the ownership interest is 'Share (Geschäftsanteile)’. Each shareholder is only entitled to hold one share in the company. The share of each shareholder is determined by the amount of the subscribed nominal share capital. In the event a shareholder subscribes for additional nominal share capital after incorporation of the company, the existing share of this shareholder will be increased by the additional subscribed nominal amount.

Are different classes of ownership interests possible? If so, what are some examples of different classes?

Not legally regulated but can be determined on a contractual basis (e.g. preferred shares, share participation rights etc.).

What documentation is required for the transfer of ownership interests?

Share purchase/transfer agreements to be executed in the form of a notarial deed.

Are there any additional formal requirements required for the transfer of ownership (notary, approvals, stamping, filings, corporate records)?

Approval by the shareholders may be stipulated in the Articles of Association.

SPA must be signed in the form of a notarial deed, otherwise the share transfer is void.

The share transfer must be filed with the Commercial Register; however the registration is just for information purposes and has no impact on the legal effectiveness of the share transfer.

Are there any applicable stamp duties imposed when transferring ownership interests?

No.

How are shares issued? (including information on payment obligations, registration requirements)

New shares are issued by way of capital increase, which requires a resolution of the shareholders and the execution of a subscription declaration by the acquirer of the new shares (notarial deed).

The capital increase is effective upon registration with the Commercial Register. No physical issuance of shares is required.

Further information on equity contributions, e.g., non-cash payments on shares, (share premium) contributions without issuances of shares, can partially paid shares/ownership interests be permitted and what are the restrictions on them?

Contributions in kind are possible.

Shareholders' contributions into the capital reserves are possible without issuing shares.

Any requirements with respect to share cancellation, share repurchase and other capital reductions

Share cancellations and repurchases are not possible.

Share capital can be decreased by formal proceedings.

Any requirements with respect to distributions to shareholders?

Shareholders only have a claim to the balance sheet profit based on the financial statements. Any other usage of a company's capital for the benefit of shareholders is prohibited unless:

• such use of capital is part of an authorized capital reduction; or
• Payment or other performance by the company is made pursuant to an agreement between the company and its shareholders at arm's length.

Can the owners or shareholders adopt a restrictive or governing agreement among themselves such as a Shareholders Agreement?

Yes.

Which are the typical annual maintenance costs of maintaining the existence and legal good standing of such an entity (excluding legal fees)?

The main costs that arise are for the preparation of the annual financial statements. Costs for filings are negligible.

What are the general corporate tax rates? (Specify if there is a national versus local distinction).

For 2024 and 2025: Corporate income tax (Körperschaftssteuer) of 23% on taxable income. In 2023 the tax was 24%. A 'minimum corporate income tax' of 5% of the statutory minimum share capital of EUR 10,000, a total therefore of EUR 500, applies.

Summary of any specific matters, e.g. recent or prospective major legal developments

Since 2024 a new (additional) legal entity form called Flexible Company (Flexible Kapitalgesellschaft) or ‘FlexCo’, exists in Austria. In principal, the provisions of the Austrian Act on Limited Liability Companies (GmbH Gesetz) apply to the FlexCo, with some deviations as provided for in the Austrian Act on Flexible Companies (FlexKapGG).

The main differences to the GmbH are:

• Reduction of notarial acts, e.g. share transfers are possible without notarial deeds (a lawyer's deed is sufficient). However, in the course of the foundation of the FlexCo the Articles of Association still need to be executed in the form of a notarial deed.
• Possibility to issue different classes of shares with different rights and obligations. Each shareholder may hold and dispose of different classes of shares separately.
• Possibility to create a special share class (company value shares) without voting rights, which can be issued to employees or service providers of the company. The nominal amount of such company value shares issued must be filed with the commercial register.
• In addition to ordinary share capital increases further capital measures are possible:
• Authorised capital (Genehmigtes Kapital) pursuant to which the Board of Directors is authorised by the shareholders' meeting to increase the share capital under certain circumstances; and
• Conditional capital (Bedingtes Kapital) pursuant to which the capital increase resolved by the shareholders' meeting is conditional upon certain criteria.
• The company may acquire and hold treasury shares.
• Repurchase of shares by the company is possible if the requirements under statutory law are met.
• In addition to the rules governing the mandatory appointment of a supervisory board in a GmbH, a supervisory board must also be appointed in a FlexCo if two of the following indicators are met: (i) a balance sheet total of more than 5 million, (ii) a turnover of more than 10 million, (iii) more than 50 employees.
• Special tax relief for the issuance of shares (in particular company value shares) to employees and service providers of the company.