Introducing the recently established flexible corporation (FlexCo) as a viable alternative to the GmbH in Austria

The "Flexible Kapitalgesellschaft" (FlexKap / FlexKapG / FlexCo) is a recently introduced business entity in Austria, set to be available from January 1, 2024. It is designed primarily for innovative startups and founders, but can be chosen as an alternative corporate structure, especially when compared to the limited liability company (GmbH).

The newly established flexible corporation (FlexKapG / FlexCo) closely follows the model of the GmbH. As per the legal definition outlined in the FlexCo Act, a flexible capital company is a type of corporation that can be established by one or more individuals for any legally permissible purpose. 

Similar to the GmbH, the FlexCo can be formed as a single-member company. The FlexCo is required to have a company name and must be officially registered in the commercial register. The legal form supplement should indicate "Flexible Kapitalgesellschaft" or "Flexible Company" and be abbreviated as "FlexKapG" or "FlexCo."

Distinguishing features of the FlexCo from the GmbH include:

1. The minimum share capital for FlexCo is EUR 10,000, the same as GmbH. However, the minimum capital contribution for FlexCo can be as low as EUR 1, allowing for very small shareholdings.

2. Unlike a GmbH, FlexCo shareholders have the authority to exercise voting rights associated with a share on a non-uniform basis.

3. FlexCo allows the issuance of company value shares of up to 25% of the share capital, which is particularly advantageous for employee participation.

4. FlexCo has the ability to acquire its own shares under specific conditions.

5. The articles of association can specify that unanimous shareholder consent is not required for circular resolutions or that compliance with the text form is sufficient, simplifying the resolution process.

6. In contrast to GmbH, the transfer of shares in FlexCo is no longer required to be notarized. Shares can be transferred through a deed prepared by a lawyer or notary.

7. Conversion options between GmbH and FlexCo are streamlined: FlexCo can be converted into GmbH by a general meeting resolution. It is also possible to convert GmbH into FlexCo, and FlexCo into an AG.

Dr. Simon Harald Baier LL.M., an attorney specializing in business law, provides advice on company formations, particularly in the establishment of FlexKapG/FlexCo and GmbH, as well as addressing various business law inquiries.