Corporate Law, Companies’ Register

Company Law, Corporate Law, Companies Register

Com­pany and cor­por­ate law are among the core fields of expert­ise of a Civil Law Not­ary, wheth­er a com­pany or a part­ner­ship is to be estab­lished, the leg­al struc­ture changed or the own­er­ship trans­ferred. In all cases a Civil Law Not­ary is able to assist as an impar­tial and expert adviser.

A Civil Law Not­ary will find a made-to-meas­ure solu­tion for entre­pren­eurs and enter­prises, that will per­sist, weath­er new chal­lenges, and are flaw­less regard­ing both form­al require­ments and mater­i­al effects by bal­an­cing the respect­ive interests. This is the only way to avoid later uncer­tainty which can lead to leg­al con­flict and litigation.

Dir­ect access to the com­pany register ensures that a Civil Law Not­ary is always up-to-date.

He can assist in access­ing all the rel­ev­ant leg­al data of all entit­ies registered in the com­pany register. As Court Com­mis­sion­er a Civil Law Not­ary is able to make cer­ti­fied excerpts form the com­pany register and to con­firm the author­ity of a per­son to sign for a leg­al entity.

Branch office or subsidiary?

The fol­low­ing art­icle describes the fun­da­ment­al dif­fer­ences between the form­a­tion of a domest­ic branch office of a for­eign com­pany and the form­a­tion of a domest­ic sub­si­di­ary by a for­eign par­ent com­pany. The descrip­tion giv­en primar­ily focusses on com­pany law aspects, mak­ing no claim to be exhaustive.

Leg­al capacity
First of all, it is neces­sary to men­tion that a branch office does not con­sti­tute an entity with leg­al capa­city, for this reas­on it can­not exer­cise rights and is not sub­ject to oblig­a­tions. It can neither be con­tract­ing party (due to that it can­not be registered with the Land Register), nor can it indi­vidu­ally become insolvent.
In con­trast to that, a sub­si­di­ary con­sti­tutes an inde­pend­ent leg­al entity, hav­ing the capa­city to also appear as such in leg­al relations.

Form­a­tion
For estab­lish­ing a sub­si­di­ary, the gen­er­al pro­vi­sions regard­ing the form­a­tion of a com­pany with lim­ited liab­il­ity (GmbH) in accord­ance with the Aus­tri­an Lim­ited Liab­il­ity Com­pan­ies Act (Gmb­HG) must be observed. In this regard, the pro­vi­sions on rais­ing the share cap­it­al, which needs to amount to at least € 35,000, half of which is pay­able in cash, par­tic­u­larly apply. Anoth­er option is the found­a­tion priv­ilege (Gründung­s­priv­ile­gier­ung), for which the share cap­it­al also needs to amount to at least €35,000, but the total amount of the ini­tial con­tri­bu­tions sub­ject to the found­a­tion priv­ilege only amounts to €10,000, half of which is pay­able in cash. This option res­ults in sig­ni­fic­ant cost sav­ings in the found­a­tion phase (The found­a­tion priv­ilege must already be used in the course of the form­a­tion pro­ced­ure and will be val­id for 10 years only. After this peri­od, the art­icles of asso­ci­ation need to be adap­ted and the ini­tial con­tri­bu­tions are pay­able pur­su­ant to the gen­er­al cap­it­al rais­ing pro­vi­sions).

The fol­low­ing doc­u­ments are required in order to estab­lish a subsidiary:

• exe­cu­tion of art­icles of asso­ci­ation in the form of a not­ari­al deed
• proof of power of rep­res­ent­a­tion of the rel­ev­ant act­ors of the par­ent com­pany (for example by sub­mit­ting a cer­ti­fied com­pan­ies’ register extract, if neces­sary trans­lated and apostilled
• share­hold­ers’ res­ol­u­tion on the appoint­ment of man­aging dir­ect­ors (sig­na­tures must be certified)
• spe­ci­men sig­na­tures of the man­aging dir­ect­ors (sig­na­tures must be certified)
• con­firm­a­tion on the paid ini­tial con­tri­bu­tions, issued by a bank or a Civil Law Notary
• com­pan­ies’ register entry (sig­na­tures must be certified)

Due to the branch office’s absence of leg­al capa­city, pro­vi­sions on rais­ing the cap­it­al do not need to be con­sidered when estab­lish­ing a branch office. Instead, the branch office’s exist­ence depends on the decisions and the leg­al fate of the head office, this is why it is not neces­sary to con­clude sep­ar­ate art­icles of association.

How­ever, the fol­low­ing doc­u­ments need to be sub­mit­ted to the Com­pan­ies’ Register Court with­in the course of the form­a­tion procedure:

• art­icles of asso­ci­ation of the for­eign leg­al entity, if neces­sary provided with a cer­ti­fied trans­la­tion and an apostille
• proof of leg­al exist­ence of the for­eign leg­al entity (e.g. by sub­mit­ting a cer­ti­fied com­pan­ies’ register extract, if neces­sary provided with a cer­ti­fied trans­la­tion and an apostille
• res­ol­u­tion on the appoint­ment of a “per­man­ent rep­res­ent­at­ive” of the domest­ic branch office
• spe­ci­men sig­na­tures of the per­man­ent rep­res­ent­at­ive and the entit­ies of the head office hav­ing power of rep­res­ent­a­tion (sig­na­tures must be certified)
• clear­ance cer­ti­fic­ate issued by the Tax Office, if necessary
• proof of the effect­ive estab­lish­ment of the branch office (e.g. by sub­mit­ting a rent­al agree­ment of the busi­ness premises of the domest­ic branch office)

Cur­rent Business
Due to the subsidiary’s status of an inde­pend­ent leg­al entity, rel­ev­ant amend­ments to the par­ent com­pany (in par­tic­u­lar amend­ments to the art­icles of asso­ci­ation) do not have to be taken into account. In con­trast to that, with regards to branch offices, any amend­ment to the art­icles of asso­ci­ation or any change in the man­aging board of the for­eign head office has to be noti­fied by sub­mit­ting the required doc­u­ments (again provided with a cer­ti­fied trans­la­tion or an apos­tille if needed).
For a lim­ited liab­il­ity com­pany (GmbH), the account­ing pro­vi­sions of the Aus­tri­an Busi­ness Code (UGB) apply, for that reas­on the annu­al fin­an­cial state­ments are to be filed with the Com­pan­ies’ Register annu­ally with­in due time. No sep­ar­ate annu­al fin­an­cial state­ments are required for a domest­ic branch office, how­ever, sep­ar­ate account­ing is neces­sary for the determ­in­a­tion of tax­able profit and the annu­al fin­an­cial state­ments of the for­eign entity must be submitted.

Ter­min­a­tion
A domest­ic branch office is ter­min­ated by res­ol­u­tion of the head office, only the sub­mis­sion of a tax clear­ance cer­ti­fic­ate by applic­a­tion to the com­pan­ies’ register (sig­na­tures must be cer­ti­fied) is required.Terminating a sub­si­di­ary slightly involves more effort, as the Aus­tri­an Lim­ited Liab­il­ity Com­pan­ies Act (Gmb­HG) stip­u­lates cer­tain form require­ments and to some extent tedi­ous pro­ced­ures, which are to be adhered to.

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A direct comparison:.+

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FORMATION:

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REQUIRED DOCUMENTS:

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CURRENT BUSINESS:

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TERMINATION:

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