Insight
Reducing the minimum share capital of a GmbH
Published
Capital reduction for a GmbH: it may sound cumbersome, but for founders it is an opportunity to pay out EUR 25,000 from their GmbH completely tax-free. In this article, we explain how founders can carry out a capital reduction for a GmbH easily and online.
What is a capital reduction?
The share capital (Stammkapital) of a GmbH (limited liability company) is the capital provided by the shareholders when the GmbH is founded. It is the minimum amount required to establish the GmbH and serves as security for creditors. The share capital forms the financial basis of the GmbH and helps to limit the shareholders’ liability.
Until now, the minimum share capital of a GmbH in Austria was EUR 35,000. With the introduction of the flexible company (Flexible Kapitalgesellschaft) in Austria at the beginning of 2024, the GmbH Act was also amended and the minimum share capital was reduced to EUR 10,000. Austrian GmbHs that previously had share capital of EUR 35,000 or more can therefore now reduce their share capital to EUR 10,000. This means that less share capital is available to creditors as a liability fund in the event of insolvency. Reducing the share capital has no direct operational effect on the GmbH.
Tax-free distribution
If a GmbH reduces its share capital from EUR 35,000 to EUR 10,000, the company can distribute EUR 25,000 to its shareholders. This difference of EUR 25,000 can be distributed to the shareholders tax-free. It is therefore possible to transfer this sum to your private assets without incurring capital gains tax.
How does a capital reduction work?
A capital reduction requires an amendment to the articles of association. This requires a shareholder resolution passed by a majority of three quarters of the votes cast. The shareholder resolution must be recorded as a notarial deed. The reduction in share capital must then be registered with the company register (Firmenbuch).
You can carry out the capital reduction online at short notice and digitally with partner notaries on the notarity platform. The partner notaries are experts in this process and will be happy to advise you. In less than 24 hours, they can prepare all the necessary documents for the capital reduction and then carry it out for you.
