Establishment of a limited liability company (Gesellschaft mit beschränkter Haftung - GmbH)
For the establishment of a subsidiary in Austria the corporate form of a limited liability company (GmbH) is recommended. It is the most frequently chosen legal form in Austria for the establishment of a company. The shareholder(s) of the subsidiary (= Austrian limited liability) company may be a natural person(s) or a legal entity or legal entities. The shareholders may be non-Austrian citizens or legal entities established under the law of another country.
- Liability and the principle of separation
One of the greatest advantages of a limited liability company in Austria is the principle of separation: that means that the shareholders are not liable for the company's debts with their personal assets, but only the company's assets are liable (no personal liability of the shareholders).
The liability of the shareholders is limited by the amount of the shareholders' contributions.
A limited liability company is established by concluding a company agreement in the form of a notarial act, but it does not come into existence (acquire legal capacity) until it is entered in the Company Register.
In the case of the formation of a one-person limited liability company, “Einpersonen GmbH”, the limited liability company is formed by a declaration of formation.
The GmbH may be established for any purpose, but it must not be established for political activities or for banking and insurance activities.
The limited liability company must have its own share capital, management and accounting system, and is subject to Austrian law (= the country of incorporation), even if the shareholder(s) are foreign natural persons or foreign legal entities of their Austrian subsidiary company.
- Minimum share capital The minimum share capital to be raised by the shareholders is EUR 35,000. It can be raised by cash or non-cash contributions.
At least half of it must be paid in cash (EUR 17.500,00) prior to the registration in the Company Register.
- Company light ("GmbH light") with the privilege of a low minimum share capital.
The Company light is a special feature under Austrian Company law: The purpose of this privilege is to lower the amount of the share capital for the first ten years after foundation to facilitate the foundation.
Accordingly, the share capital is still EUR 35,000, but in the first ten years only EUR 10,000 must be raised, of which EUR 5,000 must be paid in cash. After ten years, the privilege no longer applies, and the amount of EUR 35,000 must be raised.
In the first ten years the privilege is also effective in case of insolvency. A one-person limited liability company (Ein-Personen GmbH) can also benefit from the foundation privilege.
Minimum number of shareholders
The establishment of a limited liability company does not require a minimum number of persons: one person alone can also establish a limited liability company (,,One-Person-GmbH” ,,Ein-Personen-GmbH").
The principle of separation also applies to a One-Person-GmbH.