The new Law amending the Corporate Law (Gesellschaftsrechts-Änderungsgesetz 2011; GesRÄG 2011) brings important changes to the Austrian corporate law. It affects two main areas. First, it transposes new European standards on corporate restructurings into Austrian law. Second, it aims at improving transparency in Austrian stock corporations. Most changes entered into force on 1 August 2011.
As part of its efforts to reduce administrative burdens the EU has relaxed reporting and documentation requirements for corporate restructurings. The Austrian legislator has transposed the respective EU directive (2009/109/EG) into the new law.
Most notably, the new provisions make mergers and demergers within groups of affiliated companies easier. First, shareholders’ resolutions are no longer needed for the merger of a company into its 100% parent company (100% upstream merger). Shareholders of the parent company holding at least 5% of the share capital can, however, request a resolution. This holds true for 100% upstream demergers as well. There is good news for managing directors and members of the management and supervisory board of transferring companies as well: under the new law, they cannot be held liable by the merging companies in case of 100% upstream mergers.
Further, neither the management nor the supervisory board must report on 100% upstream mergers. The same applies to demergers if the shareholders of the transferring company will hold the same number of shares in the newly formed company (verhältniswahrende Spaltungen zur Neugründung).
Further simplifications apply outside groups of companies as well. It is now generally possible to waive the report of the supervisory board. Moreover, the merger agreement (Verschmelzungsvertrag) or demerger plan (Spaltungsplan) does not have to be filed with the court, nor must a notification be published in the national gazette. It is now possible to opt for the electronic publication of such documents in the edicts bank (Ediktsdatei: www.edikte.justiz.gv.at).
Finally, creditors can go to court and demand security within six months of the notification of the demerger. They must, however, show probable cause that their claim will be jeopardised by the demerger.
Improving transparency in stock corporations
Apart from making corporate restructurings less burdensome, the GesRÄG 2011 seeks to improve transparency in Austrian stock corporations. Under the new law, stock corporations are only allowed to issue registered shares. Companies listed on a stock exchange or plan to go public may still issue bearer shares.
The new law not only modifies the law on corporate restructurings and restricts the possibility to issue bearer shares. Publicly listed companies must now file with the commercial register (Firmenbuch) the fact that they are listed on a stock exchange and the address of their website. The new law also provides significant relief in the conducting of the shareholders’ meeting. It is no longer required to display the documents for the shareholders’ meeting at the company’s headquarters; they may now be published on the company’s website.