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New legal form “Flexible Company” for innovative startups

Tax News - 29 Jun 2023 | 4 minutes read

The Company Law Amendment Act 2023 (GesRÄG 2023), which is currently being reviewed, is intended to sustainably improve the framework conditions for the start-up industry in Austria by introducing a new form of corporation, the flexible company.

The government program for the years 2020 to 2024 already announced the creation of a new form of capital company, which is to build on international models and offer an internationally competitive option especially for innovative startups and female founders in the early stages. This project is now to be implemented with the GesRÄG 2023.

For the specific needs of startups and other innovative companies, the legal form of the limited liability company (GmbH) is particularly suitable, as it allows for very extensive design options in the articles of association. However, in some areas (e.g. in the formation of the shareholders’ will or in capital measures), greater freedom for individual structuring would be desirable and expedient than is offered by the current GmbH law. Against this background and with this objective in mind, the law governing limited liability companies (GmbHG) was therefore chosen as the starting point for the new corporation and modified in several areas along the lines of the existing law governing stock corporations (AktG).


Flexible Company

The new legal form (flexible company) is to be regulated in the Flexible Capital Companies Act (FlexKapGG). The starting point is the GmbHG, which is also to apply subsidiarily to the flexible company. In order to meet the requirements of rapidly growing companies, the new legal form is to be designed as flexibly as possible in large parts, based on the applicable stock corporation law. The legal form supplement “Flexible Kapitalgesellschaft” (abbreviated to “FlexKapG”) is also intended to emphasize the far-reaching structuring options. The legal form supplements “Flexible Company” or “FlexCo” are also to be permissible in order to address international investors in equal measure. In terms of its content, the flexible corporation will find its place between the GmbH and the stock corporation (AG).


Essential key points

At a glance, the key points of the new legal form can be summarized as follows:

  • The minimum share capital will be EUR 10,000.00. This is to be achieved through an amendment to the GmbHG, whereby this minimum share capital will also generally apply to the legal form of the GmbH. From a tax point of view, this will also result in a reduction of the minimum corporate income tax, which is generally based on the statutory minimum amount of share capital at 5 %.
  • In order to be able to represent a very small share in the company, the minimum amount for a capital contribution is to be only EUR 1.00 (instead of EUR 70.00 for the GmbH).
  • In analogy to the AG, shareholders of a FlexCo who have more than one vote are to be enabled to cast their votes in a non-uniform manner. Therefore, if a shareholder holds company shares (partially) in trust, the voting can be done according to the specifications of the beneficial owners.
  • For share transfers and takeover declarations in the case of capital increases, the notarial deed requirement does not apply. A deed executed by a notary public or lawyer is sufficient.
  • In contrast to the GmbH, both the acquisition of own shares and conditional capital increases are to be possible for the FlexCo – as is already the case with the AG. This is intended in particular to facilitate mergers of several companies and the introduction of employee participation models. The latter are to be supplemented by tax benefits for employee shareholdings.
  • With the “enterprise value shares”, a new share class tailored to the needs of start-ups will be created. This corresponds to limited rights from the shareholder position, which, according to the explanations to the ministerial draft, is to be compensated for by a lower economic risk. This new share class is intended to address in particular – but not exclusively – employees of companies.

Since (extended) structuring options are provided for the FlexCo, which are otherwise only available to the AG, the obligation to appoint a supervisory board is to be extended in deviation from the regulations applicable to the GmbH. In this context, the size categories of section 221 UGB are taken into account. If a FlexCo is therefore to be regarded as a medium-sized corporation pursuant to section 221 (2) UGB, the establishment of a supervisory board is mandatory. The point in time for this is determined by section 221 (4) UGB, which is also decisive for the other legal consequences of exceeding the size criteria.


The federal law on the Flexible Company is intended to create modern framework conditions for start-ups and innovative companies.

Thanks to its flexible structure, the new legal form should not only appeal to international investors, but also facilitate corporate mergers. A key innovation is the “enterprise value shares” as a new share class, which is also intended to significantly improve the possibility of participation – especially by employees – in the company’s success.

It remains to be seen whether this will become law.