The Private Company with Limited Liability (GmbH or GesmbH)

As a small corporation, this form of organisation is in principle well suited to a limited number of shareholders. Transfer of its shares requires a notarial act.
 
The GmbH is a juridical person, which permits the separation of capital and management. Share capital must amount to a minimum of EURO 35,000 of which at least half must be provided in cash, with the rest being contributed in kind. The shareholders must contribute at least 1/4 of the contributions to be made in either case, and the total amount in cash must be a minimum of EURO 17,500.
 
Shareholders may be either natural or juridical persons. Only one shareholder is required to found a company, which requires action by a notary. The shareholders must neither be Austrian citizens nor must they either establish residence in Austria or have their headquarters there.
 
The shareholders are required only to make a capital contribution, and are liable for the obligations of the company only to the extent of that contribution unless they are personally guilty of an infraction of legislation designed to protect creditors. This would be the case, for instance, if they were to continue to operate the company despite clear evidence of overindebtedness or inability to pay.
 
The name of the company must reflect its activities or at least contain the name of one of the shareholders. The company exists as a legal entity upon its being entered in the Company Register by the court responsible therefore. The application for registration must bear the notarised signature of all shareholders. The company may have one or more top executives. None of them must be an Austrian citizen, though it is advantageous when at least one of them is a resident of Austria and is normally present there:
 
Individuals who are shareholders can be made company officials by means of the articles of association, and others can be so designated in a general shareholders´ resolution. An executive can also be removed by such a resolution. Insofar as no provision is made to the contrary, the managing executives represent the company jointly. The articles of incorporation may authorise one or more individuals to sign on behalf of the company; alternatively, provision can be made for two or more to sign jointly. Managing executives are not allowed to engage in activities that would be competitive to the company.
 
The decisions of shareholders are recorded in the minutes of their general meeting, which must be held at least once each year. If all shareholders are in agreement, resolutions can also be enacted by mail. Appointment of an authorised representative may be made in this manner as well.
 
If share capital exceeds EURO 70,000 and the number of shareholders is larger than 50, a Supervisory Board must be appointed. This is also the case if the number of employees is greater than 300 or if the company controls other firms so that the total of all employees is greater than 300, or if a so-called 'large corporation' is involved in which various legally established limits have been exceeded. Beginning from 1997 the GmbH will have to publish their annual financial statements at least partly by submitting some relating figures to the Company Register.