On March 22 2013 a draft of the new act was revealed by Minister of Justice Beatrix Karl and Minister of Economy Reinhold Mitterlehner. The act, which is expected to come into force on July 1 2013, aims to facilitate the establishment of an Austrian limited liability company (GmbH) by making the process easier and cheaper.
In a series of landmark decisions, the European Court of Justice (ECJ) has provided for the cross-border mobility of companies within the European Union. Fearing competition from foreign legal entities, many European countries have consequently reformed their corporate laws. The proposed act will draw a line - at least temporarily - under discussion of the matter in Austria.
Minimum share capital
The minimum share capital will be reduced from €35,000 to €10,000. Out of the share capital to be paid up in cash, at least €5,000 must be paid up when establishing the company.
Corporate income tax
The minimum corporate income tax is dependent on the minimum share capital. Thus, the reduction in the minimum share capital will automatically lead to a reduction in the minimum corporate income tax, from €1,750 to €500 a year.
Attorney and notary fees
The rates of both attorney and notary fees connected with the registration of a GmbH are based on the share capital of the company. As a consequence, the reduced minimum share capital will result in lower attorney and notary fees. In addition, establishing a GmbH in line with the requirements of the Start-Up Funding Law will become cheaper.
The registration of a newly established company in the Commercial Register need no longer be published in the Official Gazette; publication in the freely accessible edict database will suffice.
Managing directors must convene a shareholders' meeting whenever the equity ratio drops below 8% and the expected time for repayment of debts exceeds 15 years.
The Insolvency Statute will also be amended. According to the draft act, if a shareholder holds more than 50% of a corporation's share capital, that shareholder is obliged to apply for the commencement of bankruptcy proceedings, provided that the legal requirements have been met and the corporation has no statutory representative.
For further information on this topic please contact Stephan Frotz, Paul Schörghofer or Clemens Spitznagel at Schoenherr by telephone (+43 1 534 370), fax (+43 1 534 376 100) or email (firstname.lastname@example.org, email@example.com or firstname.lastname@example.org).
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