The new flexible corporation (FlexCo) in Austria
Vienna, 2024-04-19
Since 1 January 2024, Austria has had one more company form: the flexible corporation “FlexCo”. The FlexCo is often regarded as a hybrid form between the two existing forms of capital company, the GmbH and the AG.
It is intended to meet the requirements of start-ups for more flexibility and reduced formalities, although the switch to FlexCo is also available to established companies.
The FlexCo is based on GmbH law, but with flexible structuring options from stock corporation law. In principle, it can be founded by at least one natural or legal person for any permitted purpose. The minimum share capital is EUR 10,000.00, at least half of which has to be paid in at the time of formation – a regulation that now also applies to the GmbH. In comparison to the GmbH, however, the minimum share capital contribution is only EUR 1.00.
The core objective of FlexCo is to make it easier to invest in companies. In addition to the classic company shares, the articles of association can also provide for the issue of company value shares of up to 25% of the share capital. This is intended in particular to enable employees to participate in profits without voting rights. In the event that the founding shareholders leave the company, they have a mandatory right of sale.
Only the sum of the allocated company shares is entered in the company register, not the names of the owners. The transfer of shares is also significantly simplified compared to a GmbH: Neither the transfer of ordinary company shares nor of company value shares requires notarisation with FlexCo. Instead, a private deed from a lawyer is sufficient.
Another innovation is the introduction of no-par value shares with a nominal amount in the articles of association. Each share is associated with one vote and must have a nominal value of at least EUR 1.00. This means that shareholders can hold different shares and dispose of them separately. Options such as conditional capital, authorised capital and the issue of convertible bonds as well as the acquisition of treasury shares and company value shares are also made possible.
In the spirit of reducing formality, FlexCo also makes it possible to provide in the articles of association for resolutions to be passed by circulation at any time, so that this cannot be prevented by the refusal of individual shareholders, as is the case with a GmbH.
Overall, the FlexCo is a company form that not only sounds modern, but also offers a number of simplifications compared to a GmbH. Nevertheless, it remains to be seen whether it can prevail in practice.
Authors: Kristina Maria Steflitsch, Johannes Zink, hba Rechtsanwälte GmbH, Vienna, Austria