designed for start-ups but also attractive for other businesses

On 15 December 2023, Austria's National Council of the Parliament (lower house) adopted the Flexible Company Act (Flexible-Kapitalgesellschafts-Gesetz, FlexKapGG), which introduces a new company form, the "Flexible Company" (FlexCo) as of 1 January 2024.1

As its name suggests, the FlexCo is all about being flexible and it addresses longstanding criticisms directed at Austria's predominant corporate form, the limited liability company (GmbH). The GmbH has faced extensive criticism in the start-up world due to its perceived lack of flexibility and strict formal requirements. The FlexCo combines features from both the conventional GmbH and the stock corporation (AG) but also introduces some totally new concepts to Austrian corporate law, such as company value shares.

But what exactly does the FlexCo bring to the table? In this article, we will present the key characteristics of this new company form.

Find a comparison of GmbH / FlexCo / Joint Stock Company here,  or download the comparison here.

Reduced Capital Requirements

Key Aspects

  • Minimum share capital reduced to EUR 10,000 – this applies to the FlexCo and to the GmbH.
  • Minimum initial contribution is EUR 5,000 – this applies to the FlexCo and to the GmbH.
  • Minimum individual contribution is EUR 1 – this applies to the FlexCo only.

details on Reduced Capital Requirements

Instead of EUR 35,000 to establish a GmbH, both the FlexCo and GmbH now require only a minimum share capital of EUR 10,000 with a minimum initial contribution of EUR 5,000.

For FlexCos, individual shareholder contributions can be as low as EUR 1, while for GmbH shareholders, the minimum contribution remains EUR 70. This difference allows smaller participations in the share capital of a FlexCo.

Circular shareholder resolutions

Key Aspects

  • Circular shareholder resolutions are possible without the consent of all shareholders.
  • Circular resolutions are valid when all entitled shareholders can participate.
  • Votes can be cast in text form, allowing for digital voting methods.

details on Circular shareholder resolutions

The FlexCo introduces changes in the approval of circular resolutions in writing. In contrast to the traditional GmbH, where unanimity among shareholders is a prerequisite for circular resolutions, the FlexCo allows for a more flexible voting procedure. The articles of association of a FlexCo can now specify that circular resolutions are not contingent on the individual consent of all shareholders. This marks a significant departure from the GmbH's approach, where such unanimity often proves to be burdensome and inefficient.

The FlexCo allows a circular resolution to be valid when all entitled shareholders have the opportunity to participate in the vote. The determination of the majority required for a circular resolution in a FlexCo is based on the total number of votes to which all shareholders are entitled. Additionally, the FlexCo embraces modernisation by permitting votes to be cast in text form (and not only in written form), allowing resolutions to be approved through methods such as e-mail and other straightforward digital signature processes.

In essence, the FlexCo's approach not only addresses the drawbacks of the GmbH's rigid circular resolution process but also fosters a more adaptable and efficient decision-making environment for businesses. It is unfortunate, however, that this concept exists only for the FlexCo.

Split Voting

Key Aspect

  • Shareholders with multiple votes can engage in split voting, significant in trustee frameworks.

details on Split Voting

Shareholders holding multiple votes are now granted the ability to engage in split voting. This option holds particular significance in trustee frameworks, an important instrument for start-ups to pool smaller shareholders under one shareholder acting (also) as trustee.

Anyone holding shares in a FlexCo may now vote differently for the shares held by it (i.e. yes, no or abstain), in particular for trustor shares.

Fractional shares

Key Aspects

  • The FlexCo allows issuance of fractional shares, enabling diverse share classes with distinct rights.
  • Simplification of share tracking, especially in trust structures.

details on Fractional shares

In contrast to the uniform share concept in a GmbH, where each shareholder is restricted to holding only one share type, FlexCos introduce a transformative feature by allowing the issuance of fractional shares. This innovation empowers companies to establish diverse share classes, providing shareholders the flexibility to hold shares from different classes, each endowed with distinct rights and responsibilities. Notably, investors can now possess shares in start-ups with varying levels of liquidation preference, determined by the financing round during which these shares were issued. This flexibility also simplifies the tracking of shares, particularly in trust structures.

The introduction of fractional shares in FlexCos represents a regulatory shift, streamlining and formalising a practice that was previously managed through mere contractual arrangements in the start-up landscape.

Company value shares (CVS)

Key Aspects

  • Together with the FlexCo, a new share class is introduced.
  • Designed for employee participation but also issuable to other stakeholders.
  • Mandatory tag-along right for CVS holders in the event of a sale of a majority stake by founding shareholders.
  • Up to 25 % of share capital can be issued as CVS.
  • No voting rights, but veto right for certain corporate measures. CVS holders may attend shareholder meetings.
  • Minimum nominal value of one cent.

details on Company value shares

Another notable feature of the FlexCo is the ability to issue "company value shares" (CVS), primarily designed for employee participation but also issuable to non-employees. Up to 25 % of the share capital can be issued in the form of CVS. These shares have a minimum nominal value of only one cent, making them accessible to a wide range of employees.

CVS grant participation rights in shareholder meetings but generally do not confer voting rights, except in specific circumstances where shareholder resolutions affect the rights to profits and liquidation proceeds of CVS holders or convert CVS into regular shares.

CVS need to be equipped with a tag-along right in case the founding shareholders sell their majority stake in the company.

CVS are particularly interesting in combination with tax changes that the legislator has adopted as part of the start-up package alongside the introduction of the FlexCo.

Simplified transfer of ownership

Key Aspects

  • Notarial deed no longer required for share transfers and new share subscriptions.
  • Private deed executed by attorney or notary can document share transfers and new share subscriptions.

details on Simplified transfer of ownership

A significant change coming with FlexCos is that a notarial deed will no longer be required to transfer shares and to subscribe for new shares. Instead, share transfers and subscriptions can now be documented through a private deed executed by either an attorney or a notary, provided the legality of the transaction is verified and the parties are advised of the legal consequences.

Thus, it remains mandatory to engage an attorney or notary for such legal actions. The simplification of formal requirements is, therefore, somewhat limited. An exception to the new rule is that CVS can be transferred in a simple written form without the need to involve an attorney or notary. However, companies must inform their employees in detail about these shares at least two weeks before transferring them to employees.

Flexibility regarding capital measurements

Key Aspects

  • FlexCos can acquire and hold their own shares.
  • Capital raising instruments resemble existing concepts at AGs, such as conditional capital and authorised capital.

details on Flexibility regarding capital measurements

Given the great flexibility that the FlexCo offers, it is also possible for the company to acquire and hold its own shares under specific conditions (treasury shares). This feature is especially beneficial within the CVS context, allowing companies to reserve these shares and release them gradually to employees as required.

In addition, the FlexCo offers capital raising instruments analogous to the AG, such as conditional capital, authorised capital and capital reduction through the withdrawal of treasury shares.

Supervisory boards

Key Aspects

  • Lower threshold for establishing a mandatory supervisory board in a FlexCo.
  • A supervisory board is mandatory if at least two of the following criteria are exceeded: (i) EUR 5m balance sheet total; (ii) EUR 10m turnover; or (iii) an average of 50 employees.

details on Supervisory boards

One side effect of greater flexibility is that a FlexCo has a lower threshold for establishing a mandatory supervisory board. In addition to the cases where a supervisory board is mandatory for GmbHs, a supervisory board is also mandatory for FlexCos that exceed two of the following criteria: (i) EUR 5m in balance sheet total; (ii) EUR 10m in turnover; or (iii) an average of 50 employees. Start-ups may exceed the criteria under (i) and (iii) quite easily in practice, so the requirement of establishing a supervisory board must be taken into consideration when choosing the FlexCo as a company form.


Key Aspect

  • FlexCos can be easily converted into a GmbH or AG and vice versa.

details on Conversion

The possibility of converting a FlexCo into a GmbH or AG and vice versa is expressly provided for in the FlexKapGG.

While the conversion of a FlexCo into a GmbH or vice versa does not require specific creditor protection measures and no right to a cash settlement is provided for shareholders who do not agree with the conversion, the same provisions apply for FlexCo/AG conversions as for GmbH/AG conversions.

The possibility of converting a FlexCo into a GmbH or AG and vice versa is expressly provided for in the FlexKapGG.

While the conversion of a FlexCo into a GmbH or vice versa does not require specific creditor protection measures and no right to a cash settlement is provided for shareholders who do not agree with the conversion, the same provisions apply for FlexCo/AG conversions as for GmbH/AG conversions.


For those who want it, the FlexCo brings flexibility by mixing the features of the Austrian Joint Stock Company (AG) and the Austrian Limited Liability Company (GmbH). Most features are not mandatory. Shareholders of a FlexCo still benefit from a lower share capital and reduced transfer formalities. As with any new law, however, there are legal uncertainties and room for interpretation.

The introduction of the FlexCo is a positive step for the Austrian start-up landscape toward greater flexibility and international competitiveness. Will the FlexCo be a gamechanger for entrepreneurs in Austria? Time will tell.

Download the comparison overview between the GmbH, FlexCo and Joint Stock Company .


1. Note: Effectivness as of 1 January 2024 is subject to the adoption in the Federal Council (upper house) which shall follow shortly.


The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.