Founding a GmbH in Austria: a guide for entrepreneurs

The limited liability company (GmbH) is one of the most popular legal forms in Austria. In 2022, more than 5,000 GmbHs were founded in Austria. In this article, we take a closer look at the steps involved in founding a GmbH in Austria and give you a comprehensive guide.

Founding a GmbH online

Austria is one of Europe’s pioneers in digitalising public administration. Many official procedures in Austria can already be handled entirely digitally, and this also applies to founding a GmbH. It can be done 100% online – from anywhere in the world. The ongoing administration of the GmbH can also be handled entirely remotely. You are welcome to book an appointment for founding a GmbH online here.

Of course, it is also still possible to found a GmbH the analogue way. However, the advantages of a digital formation are obvious: faster processing and flexibility in terms of place and time. In addition, all documents (articles of association etc.) are digital originals and are therefore easier to file and send.

Is the GmbH the right legal form for me?

As a first step, you need to decide whether a GmbH is the right legal form for you at all. A major advantage of the GmbH is that the shareholders’ liability is limited. This means that, as a rule, the shareholders are not personally liable for the GmbH’s debts. This reduces the entrepreneurial risk for the shareholders.

On the other hand, a GmbH involves administrative effort. One example is the obligation to prepare annual financial statements. These are usually prepared by a tax adviser, which can lead to costs.

If you are unsure whether the GmbH is the right legal form for you, partner notaries on the notarity platform will be happy to help. Arrange a free consultation with a partner notary by video call.

Company name

Next, a permissible company name must be chosen for the GmbH. Choosing an impermissible company name is the most common reason why registration of a GmbH in the company register is refused. This delays registration and also leads to additional work and costs. The company name should therefore be carefully considered in advance.

The company name of the GmbH must:

• be suitable for identifying the company;
• be distinctive – this is not the case, for example, with purely generic industry terms such as “Softwareentwicklung GmbH” (software development GmbH);
• not be misleading. A company name is misleading if it misleads about the type and scope of the business, the industry or the goods and services offered. For example, “Müller Reinigungs GmbH” (Müller Cleaning GmbH) would be misleading if its business purpose were “management consultancy”;
• be distinguishable from other companies registered in the company register. A company name that already exists in the company register cannot be chosen.

You are welcome to check whether a specific company name is permissible in a consultation with a partner notary or with the WKO (Austrian Economic Chamber).

Business purpose

The business purpose (Unternehmensgegenstand) describes the type of activity the GmbH carries out. Examples of a business purpose might be:

“The development and distribution of software”

or

“Trade in goods of all kinds”

Several business purposes can also be specified. It is important to think carefully about the business purpose when founding the company, as it effectively sets the limits of what the GmbH can do. The GmbH may not simply act outside its business purpose.

Documents for founding a GmbH in Austria

To found a GmbH in Austria, you generally need the documents listed below. If you do not have these documents, partner notaries on the notarity platform will be glad to help you prepare them. Please note: founding a GmbH requires a so-called structured company register application. This can only be prepared with the help of a notary or a law firm. For this reason alone, the documents cannot be prepared entirely on your own without legal advice.

You need the following documents to set up your GmbH:

• Articles of association: The articles of association govern the organisation of the company. They set out, for example, who may represent the GmbH or how profits are divided among the shareholders. For a single-member GmbH, the rules on the organisation of the GmbH are laid down in a so-called declaration of establishment (Errichtungserklärung) instead of articles of association.
• Shareholder resolution appointing the managing director or directors.
• Specimen signature of the managing directors. This is a signature of each managing director that is filed with the company register. Its purpose is to allow third parties to compare the managing director’s signature with a signature they have received.
• Company register application for the new GmbH.

The binding version of the GmbH’s articles of association must be in German. An English translation can be attached for information purposes. If one of the shareholders does not understand German, an interpreter must be involved in the formation before the notary.

How much does it cost to found a GmbH in Austria?

The cost of founding a GmbH depends on several factors. The following are the main factors that determine the costs:

• Have all the necessary documents already been prepared, or are they to be drafted by the notary?
• Is a single-member GmbH being founded, or are several people founding the company?
• Is the notary or a law firm responsible for filing the documents with the company register?

How long does it take to found a GmbH in Austria?

A GmbH can be founded quickly in Austria. You can complete the notarial part with partner notaries on the notarity platform within 24 hours, even if you do not have any documents yet. Appointments are available at short notice.

After the notarial formation of the GmbH, you must open a business account with a bank. The share capital contribution must then be paid into this account. This can take a few days. If you want to speed up this step, you can also open a trust account with one of the partner notaries on the notarity platform. This account is available immediately, and the capital contribution can be paid straight into it. This speeds up the formation process.

The company register court then has to register the GmbH. In our experience, this usually happens within a few working days, although there may be exceptions in individual cases. In the period between the application for registration and the entry in the company register, the GmbH can already act.

Overall, a GmbH in Austria can be founded (up to and including registration in the company register) within a few working days.

Simplified GmbH formation

Austria has special rules for founding a single-member GmbH. What is special about the single-member GmbH is that it can be founded without a notarial deed. The formation can be completed entirely digitally via the Unternehmensserviceportal (Business Service Portal).

However, the simplified GmbH formation only applies in a very narrow range of cases. It is governed by Section 9a GmbHG. To qualify for a simplified GmbH formation, the following requirements must be met:

• The GmbH may only have one shareholder;
• This shareholder must also be the managing director of the GmbH;
• The company must be founded with a declaration of establishment. There are rigid requirements for how the declaration of establishment is drafted, so no flexible provisions can be made as in articles of association.