Gesellschaft mit beschränkter Haftung (GmbH)
Austrian start-ups usually choose the legal form of the GmbH. In comparison to the AG, it offers the advantages of a lower minimum share capital of EUR 35,000, privileges when paying in the share capital, greater autonomy of the articles of association and low administrative costs.
A PE/VC Fund may participate in an Advisory Council that has been established and, in principle, also in a Supervisory Board. Rights for reservation of approval would make a case-by-case examination necessary.
The Management directs the GmbH. In addition, an optional Supervisory Board may be established to supervise the Management and to which approval rights for certain management decisions may be reserved. It is also possible to appoint a purely consultative Advisory Council which does not perform any duties of a corporate body under company law.
A PE/VC Fund may participate in an Advisory Council that has been established and, in principle, also in a Supervisory Board.
If the Supervisory Board is granted reservations of approval, it must be examined on a case-by-case basis whether this still leaves sufficient room for the Management to make decisions.
A conversion from a GmbH to an AG can only be considered for a few start-ups, for example, if a large circle of shareholders developed from multiple financing rounds or a large capital requirement exists.
A PE/VC Fund may in principle participate in a Supervisory Board. Rights for reservation of approval would make a case-by-case examination necessary.
The information in our toolbox provides managers of private equity or venture capital funds with an initial overview of certain framework conditions in the respective country. It does not provide advice on the law of any country, neither does it substitute such advice. Before taking over a board seat in a portfolio company, it is at all times necessary to seek expert advice. Our team is happy to assist you with all questions at any time.
In collaboration with: Brandl & Talos
Sources: Wegen/Spahlinger/Barth, Gesellschaftsrecht des Auslands 2. EL Januar 2018