Austria: The planned end of the founding privilege of limited liability companies

 

With the Company Law Amendment Act 2023, the German government plans to reduce the minimum share capital of limited liability companies from EUR 35,000.00 to EUR 10,000.00. The reduction of the required minimum share capital is intended to reduce the economic risk of shareholders of a GmbH. Consequently, the aim is to facilitate the establishment of start-ups and thus create an incentive for start-ups.

However, the planned draft law not only has an impact on potential start-ups, but also on existing companies that have made use of the start-up privilege.

The present draft law provides that, as a result of the reduction of the share capital, the possibility of start-up privileges for start-ups will be completely eliminated. All those companies that have taken advantage of the founding privilege have so far been legally obliged to terminate it no later than 10 years after the company has been entered in the commercial register and are henceforth subject to the usual minimum capital requirements. This means that the minimum deposit requirement of EUR 17,500.00 must be met.

The planned reduction of the minimum share capital is also accompanied by the reduction of the minimum payment obligation, which is to amount to EUR 5,000.00 in the future and will thus correspond to the previous payment obligation when claiming the start-up privilege.

According to the present draft law, it will not be necessary for companies that are registered in the commercial register on 01.11.2023 and have made use of the founding privilege to terminate it within the previously existing period of ten years. The draft law does not provide for an ex lege termination of the founding privilege.

The Company Law Amendment Act 2023 also simplifies the situation to the effect that in the event of an amendment to the articles of association and the elimination of the provisions of the founding privilege, no call for creditors will be necessary, provided that the capital contributions taken over are at least the same as the previous capital contributions privileged for start-ups.

The measures described do not represent a complete innovation, for example, the minimum share capital of the GmbH was last the subject of legislative measures in 2013 and 2014 and the minimum share capital was first lowered from EUR 35,000.00 to EUR 10,000.00 and then this change was rejected again.

It is now necessary to wait for the conclusion of the legislative process and the planned reduction of the minimum share capital offers an attractive opportunity for founders to take advantage of the advantages of a limited liability company.

 

For further information, please contact:

Luca Trondl, Lawyer

Zumtobel + Kronberger, Salzburg

e: office@eulaw.at

t: +43 662 62 45 00

 

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