The Company Act in Austria is based on the Austrian Commercial Code, the Austrian Trade Law 1994, the New Companies Promotion Act, the Commercial Register Act and the Federal Law on Special Assistance for Small and Medium-sized Enterprises. All these texts of legislation regulate the incorporation, registration and running of a company in Austria, therefore it might seem that the Austrian Company Act is a bit strict.
As a matter of fact, the Company Act in Austria is quite flexible to a certain extent. Some requirements are also mentioned in the Austrian Corporate Governance Code. Nevertheless, it is the duty of any foreign investor to find out all aspects about the different types of companies that can be set up on Austria in order to decide which structure is the best for his own objectives.
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Other laws providing for the registration of an Austrian company
Apart from the Company Law, commercial entities in Austria are also governed by:
- The Limited Liability Company Law which covers the registration of this type of business form;
- The Capital Adjustment Law which provides for the share capital requirements and alterations for companies;
- The Company Reorganization Law which provides for companies undergoing restructuring;
- The Law related to Splitting Companies which provides for mergers and acquisitions;
- The Capital Replacement Law and the Business Code are two other main laws.
There are several business forms available for registration under the Austrian Company Act.
Types of Austrian companies
The Company Act in Austria mentions a wide range of companies that can be established in Austria, such as:
- the limited liability company (GmbH);
- the public limited company or joint stock company (AG);
- five types of partnerships.
The partnerships are divided as follows:
- non-trading partnership (GesbR),
- general partnership (OG),
- limited partnership (KG),
- silent partnership (StG),
- limited partnership with a limited liability company as general partner (GesmbH&Co.KG).
The Labor Law is strongly linked to the Company Act in Austria. It is mentioned in the text of the law that employers are the one responsible for registration of the employees with the social security system. Employment contracts are also regulated by the Labor Law in Austria. Foreign employees need a work permit that is usually obtained by the employer.
Choosing a company name in Austria
The Company Act in Austria stipulates some conditions regarding the name of a company in Austria. It is mandatory that the name comes from the activity of the company or it must be related to the names of the shareholders. It is also compulsory that the name of the company is audited by the Chamber of Commerce in Austria. Sometimes, the authorities can decide to change it or bring modifications, such as including the words “Austria” or “Österreich”. The name of the company in Austria has to be unique, according to the Company Act in Austria.
Company management in Austria
Another key requirement related to opening a company in Austria is the appointment of company directors or managers. The Company Law provides for the following management structures for a company:
- an Austrian company must have at least one managing director;
- in the case of a public company, a supervisory board is required;
- the shareholders can also participate in the decision-making procedures;
- there are no specific requirements related to the citizenship of company directors.
If you need more details about the Company Act or any other issues related to company formation in Austria, don’t hesitate to contact us. We can also help you obtain residency by investment in Austria.