What is the main source of law authorizing this entity form?

Austrian Stock Corporation Act ("Aktiengesetz - AktG ").

Give a brief summary of the entity form:

Does the entity possess separate legal personality?

The AG has legal personality.

(Maximum) period of existence

No maximum period of existence; usually the AG is incorporated for an indefinite period, but a limited period may be included in the articles of association.

Governing document(s)

The AG is governed by its articles of association.

Liability of incorporators / shareholders

The shareholders in general are not personally liable for the liabilities of the company.

(Governing) bodies

Governing bodies are the: shareholders' meeting ("Hauptversammlung"), board of directors ("Vorstand") and supervisory board ("Aufsichtsrat").

Other particularities

N/A

Can this type of entity be involved in international transactions and restructurings (e.g. cross border mergers, asset acquisitions, equity acquisitions, etc.)?

The acquisition of assets, equity, etc. abroad is possible without limitation.

International restructurings are possible pursuant to specific legislation (mergers within the EU) or pursuant to jurisdiction of the European Court of Justice (e.g. crossborder relocations with change of legal form).

Can this type of entity be publicly listed or held?

AG can be listed on the stock exchange, if prerequisites are met. It can be publicly held.

Can this type of entity be used for a non-profit or charitable organization?

Yes.

Give a brief summary of the process of incorporation, formation, or organization, including:

Main documents required

Main documents are the:

• notarial minutes of the founders' meeting including the articles of association;
• minutes of the inaugural meeting of the supervisory board (including the appointment of the board of directors);
• foundation report of the founders;
• foundation report of the board of directors and the supervisory board; and
• documents for the registration at the Austrian Commercial Register ("Firmenbuch").

Involvement of notary, company register, governmental authorities

Involvement of notary, company register, governmental authorities:

• minutes of the founders' meeting and articles of association need to be signed in the form of an Austrian notarial deed; and
• the AG must be registered with the Austrian Commercial Register ("Firmenbuch").

Timing (estimate)

Timing (estimate): incorporation may take several weeks, particularly depending on the complexity of the shareholder structure and the workload of the Commercial Register.

Main costs, including registration and similar fees (excluding legal fees)

The costs for foundation and incorporation depend on the amount of share capital to be registered with the Commercial Register as well as the kind of contribution to be made to the AG by the shareholders.

The corporate objects / purpose must be stated in the articles of association.

 

Is a description of the anticipated business or purpose of the entity required for incorporation, formation or organization?

The corporate objects / purpose must be stated in the articles of association.

Minimum number of incorporators / shareholders and residency requirements

Minimum of one shareholder, no residency requirements.

Minimum number of directors (or other applicable officers) and residency requirements

At least one managing director. The supervisory board has to consist of at least three members. No residency requirements.

Minimum share capital, or equivalent, and payment requirements (including opening a bank account)

Minimum share capital of EUR 70,000 to be paid up in cash. Contribution in kind possible.

Is the physical presence of incorporators / directors required in the jurisdiction for incorporation, formation or organization?

Shareholders need to be either physically present or represented by PoA, which has to be notarially certified and, in case, legalized.

Board of directors, founders and supervisory board members need to sign the registration application in notarially certified form, no representation possible. Legally it is possible that the persons sign abroad (in front of a foreign notary to certify signature).

Is a tax identification number, or equivalent, required? If so, how is it obtained?

Tax identification number will be provided by tax authorities on registration. VAT-ID will be provided by tax authorities on request.

What is the title of the applicable company registry?

Commercial Register (" Firmenbuch").

What types of information must be filed at the (company) register, and which of them will it be publicly available, e.g.:

The following information must be filed at the Commercial Register and is publicly available:

• Name of the company.
• Legal form.
• Registered office and the business address relevant for deliveries.
• A short description of the branch of business.
• Share capital.
• Type of shares issued (par-value shares ("Nennbetragsaktien") or non-par-value shares ("Stückaktien")).
• Effective date of annual financial statements.
• Articles of association.
• Type of publication (e.g. official gazette ("Amtsblatt zur Wiener Zeitung")).
• Members of the board of directors and their representation power.
• Members of the supervisory board.
• Further representatives (authorized signatories; "Prokuristen "), if any.
• Insolvency proceedings.
• Liquidation.

In addition, ultimate beneficial owners of Austrian legal entities (with some exceptions) must be registered with the Austrian UBO Register ("Register der wirtschaftlichen Eigentümer ") according to the provisions of the Austrian UBO Register Act (" Wirtschaftliche Eigentümer Register Gesetz – WiEReG "). Each company is obliged to identify and verify its ultimate beneficial owners and report the requested data to the register.

What is the title of the executive body and its members? What are their main duties, tasks and responsibilities?

Members of the board of directors ("Vorstand") are (solely or jointly) representing the company.

How are the members of the executive body appointed, dismissed and replaced?

Directors are appointed and dismissed by the supervisory board.

Is it possible to appoint corporate directors or must all directors be natural persons?

All directors and all members of the supervisory board must be natural persons.

Is there a requirement to have non-executive directors? How are they appointed, dismissed and replaced? Do non-executive directors serve on a separate body (two-tier structure) or can a one-tier board (with executive and non-executives) be appointed, or is some alternate structure used?

It is legally required to have a supervisory board ("Aufsichtsrat") consisting of at least three members to be appointed/dismissed by the shareholders' meeting.

The main task is to supervise and advise the board of directors. It has approval rights regarding certain measures of the management.

What is the title of the body of owners / shareholders / members, and what are the main tasks / responsibilities / powers of that body?

Shareholders' meeting ("Hauptversammlung ") (consisting of all shareholders). The main rights concern amending the articles, appointment and dismissal of supervisory board members, adoption of the financial statements and profit distributions.

What are the majority and quorum requirements for decisions by the shareholders? Can they be varied or changed?

In general, resolutions can be passed with simple majority (50+1 votes).

Some measures require higher majorities (e.g. 75% for the amendment of the articles of association). Different majorities may be stipulated in the articles of association.

Any special governance regimes (e.g. depending on size, being listed at a stock exchange, or other criteria)?

Requirements regarding the composition of the supervisory board depending on the number of employees.

What are the periodic accounting obligations incumbent upon the entity? To whom must those accounts be submitted?

Annual financial statements (audited by an auditor) and an annual report need to be set up by the board of directors, audited by the supervisory board and submitted to the shareholders' meeting. The annual financial statements must be filed with the Commercial Register.

Is the entity permitted to determine its own financial year?

Yes, to be determined in the articles of association.

Is the entity subject to any statutory (external) auditor obligations?

Yes, the annual financial statements need to be audited by an external auditor.

Requirements to appoint other persons (officers, secretary, internal auditor / accountants). If so, what are their functions? Are there any residency requirements?

In order to carry out a trade ("Gewerbe"), the company needs to appoint a manager pursuant to trade law ("Gewerberechtlicher Geschäftsführer"). The manager is responsible for ensuring compliance with the applicable trade law provisions as well as the proper professional conduct of business.

Citizenship requirements: Austria, EEA signatory states, Switzerland, other third countries with residence permit.

Residency requirements: Austria, Switzerland or any EEA signatory state.

What is the title designated for 'ownership interests' (e.g. shares, quota, interests, membership)?

Shares ("Aktien").

Are different classes of ownership interests possible? If so, what are some examples of different classes?

The company may issue registered shares (" Namensaktien ") or, in case of a listing at a stock exchange, bearer shares ("Inhaberaktien"). The AG may also issue " Vorzugsaktien" (preferred shares) with increased share profit rights but without voting rights. Further share classes can be determined on a contractual basis (e.g. in a shareholders' agreement).

What documentation is required for the transfer of ownership interests?

In general no formal documentation is required for the transfer of shares.

Are there any additional formal requirements required for the transfer of ownership (notary, approvals, stamping, filings, corporate records)?

Registered shares are transferred by way of endorsement.

Additionally in case of "vinkulierte Namensaktien" (registered shares with restricted transferability) the consent of the corporation to the transfer is required (in general, by resolution of the board of directors).

If registered shares are issued, all shareholders need to be registered in a share register maintained by the company

Are there any applicable stamp duties imposed when transferring ownership interests?

No.

How are shares issued? (including information on payment obligations, registration requirements)

New shares are issued by way of capital increases.

There are different kinds of capital increases:

• ordinary capital increase upon resolution of the shareholders' meeting pursuant to which shares are immediately issued to the acquirer(s) of the new shares;
• authorized capital (" Genehmigtes Kapital") pursuant to which the board of directors is authorized by the shareholders' meeting to increase the share capital under certain circumstances; and
• conditional capital ("Bedingtes Kapital") pursuant to which the capital increase resolved by the shareholders' meeting is conditional upon certain criteria.

Further information on equity contributions, e.g., non-cash payments on shares, (share premium) contributions without issuances of shares, can partially paid shares/ownership interests be permitted and what are the restrictions on them?

Contributions in kind are possible.

Shareholders’ contributions into the capital reserves are possible without issuing shares.

Any requirements with respect to share cancellation, share repurchase and other capital reductions

Repurchase of shares by the company is possible if requirements under statutory law are met.

Share capital can be decreased by formal proceedings.

Any requirements with respect to distributions to shareholders?

Shareholders only shall have a claim to the balance sheet profit based on the financial statements. Any other usage of a company’s capital for the benefit of shareholders is prohibited unless:

• payment from the company occurs within the scope of a properly authorized capital reduction; or
• payment from or other performance of the company is made based on an agreement between the company and its shareholders that satisfies the third party's arm’s length principle.

Can the owners or shareholders adopt a restrictive or governing agreement among themselves such as a Shareholders Agreement?

Yes.

Which are the typical annual maintenance costs of maintaining the existence and legal good standing of such an entity (excluding legal fees)?

Main costs arise for the preparation of the annual financial statements and the shareholders' meetings. Additional fees and requirements if the company is stock listed.

What are the general corporate tax rates? (Specify if there is a national versus local distinction).

For 2021: corporate tax (" Körperschaftssteuer ") of 25% on profits, whereby a 'minimum corporate tax' of 5 percent of the statutory minimum share capital of EUR 70,000, a total therefore of EUR 3,500, is to be paid per calendar year.

Summary of any specific matters, e.g. recent or prospective major legal developments

Currently Austria is working on the implementation of a new (additional) legal entity form that offers more flexibility than the existing GmbH and AG, especially for start-up companies.