Gesellschaft mit beschränkter Haftung GmbH (Company with limited liability) – gemeinnützige GmbH gGmbH (Non-Profit Company with limited liability)

The GmbH is a corporate form which cultural institutions frequently use. This applies to activities under the Trade Code (Gewerbeordnung) (e.g. concert organiser, actors’ agencies, film productions, cinemas, etc.) as well as for cultural institutions in a narrower sense (theatre, orchestra, festivals, etc.).

The GmbH may be oriented towards charitable purposes and, almost identical to a non-profit association, benefit from tax privileges. Formally, the corporate form of a non-profit GmbH (gGmbH) does not exist, but the designation may be used without legal consequences. The gGmbH is subject to the same company law provisions as profit-oriented companies.

The registered office of the GmbH can only be a place (municipality) in Austria. 

At a glance

Minimum capital

EUR 35,000, of which 50% to be paid up in cash, remainder: in-kind contributions

Note: founding privilege

Separate legal personality


Legal basis

Articles of Association, notarial deed required

Number of persons required for formation

Minimum of 1 person

Formation costs

EUR 2,000


One or several shareholders


Managing director (at least one), General Meeting of Shareholders, Supervisory Board (optional, mandatory from a given size)


Audit of the annual financial statements for medium-sized and larger GmbHs

Personal liability of shareholders


Personal liability of the managing directors

Managing directors are liable in case of personal fault

Minimum corporate tax

None for non-profit GmbH, all others EUR 1,750 per year

Accounting, financial statements

Accrual basis of accounting, financial statements consisting of balance sheet, profit and loss statement, filing of the financial statements with the companies register

Influence of owners

Directly and easily possible via the annual general meeting, little independence

What is a GmbH?

The GmbH is a corporation whose capital is divided into shares with initial capital contributions. The initial capital contributions are contributed by the shareholders as original share capital. As a legal person (legal entity) with separate legal personality, the GmbH may acquire rights, incur liabilities, sue and be sued. The shareholders are generally liable for the debts of the company only with their share in the original capital (initial capital contribution).

Who can establish a GmbH?

Both natural persons and legal persons may establish a GmbH. An individual may also set up a GmbH. 

How is a GmbH formed?

In order to establish a GmbH, the shareholders must adopt Articles of Association. If only one person founds the company, he or she must issue a declaration on the formation of a company. Both cases require a notarial deed (signing in the presence of a notary). The company is formed as soon as one or several managing directors have been appointed and registration in the companies register has been completed. If the activities are carried out before that on behalf of the company, the acting persons have joint and several personal liability (joint and several debtors). The statutory minimum capital which the shareholders must contribute is EUR 35,000, one half of which must be paid up in cash. However, there is a possibility to benefit from the founding privilege (Gründungsprivilegierung).

Founding privilege

While the original capital is EUR 35,000, the Articles of Association may provide for initial capital contributions which are subject to the founding privilege for the individual shareholders. The sum of the initial capital contributions subject to the founding privilege must be at least EUR 10,000, of which at least EUR 5,000 must be paid up immediately. In-kind contributions are not eligible. The founding privilege ends after 10 years at the latest, but may be ended at an earlier moment in time. To do so, it is necessary to amend the Articles of Association accordingly and to satisfy the statutory requirements governing paid-in minimum capital (at least EUR 17,500 in cash contributions).

Good to know

The founding privilege must already be included during the foundation of the company in the Articles of Association or the declaration on the formation of a GmbH and cannot be included later by amendment of the Articles of Association.

Articles of Association

The Articles of Association are the contractual basis of a GmbH. They govern the rights and duties of the shareholders and the “purpose” of the company.

Minimum content pursuant to the GmbH Law: company name and registered office of the company, objective of the company, amount of original share capital, amount of capital contribution to be made by every shareholder toward to original share capital (initial capital contribution).

Optional: founding privilege, rules on management and representation, on the general meeting of shareholders, on the adoption of resolutions by the shareholders, on the appropriation of profits, etc.

Good to know

With a non-profit GmbH, the Articles of Association must stipulate that the privileged purpose will be exclusively and directly promoted, so that the formal requirements for the tax privilege associated with the non-profit status are met. Moreover, profit orientation must be explicitly excluded. Accidental (windfall) profits must not be paid out to the shareholders.

Companies register

After adoption of the Articles of Association, all appointed managing directors must submit a filing for registration of the company in the companies register. The GmbH is formed upon registration in the companies register (constitutive registration). The company register filing must include: Articles of Association/declaration on the formation of a GmbH as a notarial deed, list of shareholders, list of managing directors, resolution appointing the managing directors (unless already appointed in the Articles of Association), specimen signatures of the managing directors, bank statement confirming payment of the cash contributions, clearance certificate from the tax authorities, possibly an expertise by the Federal Economic Chamber on the company name.

Good to know

A filing fee of EUR 36 and a registration fee of EUR 313 are payable on registration in the companies register of a GmbH with two shareholders and one managing director; these fees are not charged if the Law promoting newly founded Companies (Neugründungsförderungsgesetz) is applicable. 

Managing director(s)

The GmbH needs natural persons who act on its behalf. The GmbH is represented by managing directors in court and out of court. The minimum required is one managing director. The managing directors must be registered in the companies register; they are appointed by shareholder resolution. Unless the Articles of Association provide otherwise, the company is represented by all managing directors jointly (joint representation). The Articles of Association may also provide for sole representation. Managing directors of a GmbH need not, but may be shareholders of the GmbH. 

Trade licence

The GmbH holds the trade licence. The managing director for trade licence purposes, who must also be the managing director under commercial law, or any employee who is registered for employment to the extent of at least 50% of the weekly working time and must be insured under the General Social Insurance Law (Allgemeines Sozialversicherungsgesetz ASVG), must prove their professional qualifications.

Procedure / Foundation

1.         Drafting of Articles of Association in writing

2.         Notarisation

3.         Payment of the initial capital contributions

4.         Appointment of the managing director(s)

5.         Filing for registration in the companies register

            Documents to be attached:

Articles of Association, list of shareholders and their subscribed and paid up capital contributions, notarised specimen signature of the managing directors, and declaration (by the managing directors) that the cash and in-kind contributions are at their disposal

6.         Check by the companies register court

7.         Publication of registration by the companies register court

8.         Preparation of the opening balance sheet

9.         Registration with the local tax office

Formation costs

The formation costs depend i.a. on the amount of the original share capital. While the minimum capital is EUR 35,000, only 50% needs to be paid up in cash. The remaining 50% may be in-kind contributions or paid up later. 1% capital transfer tax on the paid-in capital (1% of at least EUR 17,500 = EUR 175) is payable to the tax office. Further costs include the registration fee and publication fee of approx. EUR 500, notarial fees, tax and legal fees. Altogether the costs accruing for the formation of a GmbH amount to approx. EUR 2,000. 

Company name

The company name is the official name of the company. You may choose any designation, description or invented name, as long as it allows identifying the company. The names of persons other than the shareholders may not be used for the company name. The company name must at any rate be followed by the addendum “Gesellschaft mit beschränkter Haftung”, abbreviated as “GmbH”, “Ges.m.b.H.” or “Gesellschaft m.b.H.”


While, as a legal person, the GmbH has full capacity to act, it cannot act as an abstract entity. This is why the law prescribes that there is at least one managing director. As the managing director(s) and the shareholders need not be identical, there is a general meeting of shareholders as the body of owners. With a given size of a GmbH, it is useful and/or mandatory to set up a supervisory board (if the original capital exceeds EUR 70,000 and the number of shareholders is more than 50).


The GmbH is liable with the assets of the company, i.e. the shareholders are not directly or personally liable. The shareholders are only liable for paying up the original capital as set out in the Articles of Association. The managing director of the GmbH has unlimited and mandatory liability vis-à-vis the public authorities for a violation of tax obligations if this leads to the non-payment of taxes by the company or if impending over-indebtedness of the company is not notified in good time to the commercial court. 

Limitation of liability for the time of the founding privilege

As long as the founding privilege lasts, the shareholders of a GmbH are liable vis-à-vis the creditors of the company only up to the amount of the initial capital contribution that benefits from the founding privilege, unless this contribution has already been paid up anyway. This limitation of liability also applies in insolvency proceedings. 

Accounts, financial statements

The GmbH is subject to the accounting requirements of company law (= accrual basis of accounting) and must prepare annual financial statements (balance sheet, profit and loss statement, notes and management report) which must be filed with the companies register court. 

Profit distribution

Only net profits for the year may be paid out to the shareholders. Unless otherwise provided in the Articles of Association, the net profit for the year is distributed on a pro rata basis of the paid-in initial capital contributions. Losses are generally borne by the company, there is no obligation for supplementary payments, unless the Articles of Association provide otherwise.

Social insurance

The shareholders are subject to health and pension insurance under the Social Insurance Law for Commerce and Trade (Gewerbliches Sozialversicherungsgesetz GSVG) and accident insurance under the General Social Insurance Law (Allgemeines Sozialversicherungsgesetz ASVG), if the GmbH is a member in a chamber of trade and these persons are not anyway subject to mandatory pension insurance under the ASVG because of their employment as managing director. 

Further information


As a legal entity, the GmbH is subject to corporate tax. The minimum corporate tax rate is based on the minimum statutory capital required for the foundation of the GmbH

GmbHs which were founded after 30 June 2013 benefit from a reduced minimum tax rate of EUR 500 during the first five calendar years following formation, and EUR 1,000 per year for the next following five calendar years (tax privilege for founders).

Profits disbursed to shareholders (natural persons) are subject to withholding tax on capital.

For tax purposes, shareholders with a stake of up to 25% may qualify as employees (e.g. managing directors); for those with a stake of more than 25%, compensation paid out generally qualifies as income from self-employed activity


The GmbH is dissolved by expiry of the duration set out in the Articles of Association, by a shareholder resolution (notarisation required), merger, institution of bankruptcy proceedings, or non-institution or suspension of insolvency proceedings for lack of assets to cover the costs, by order of the administrative authorities, by order of the commercial court. The Articles of Association may state further reasons for dissolution. The dissolution of the company must be notified to the companies register. In that stage, the company bears the addendum “in liquidation”. 

Special form: one-person GmbH

Even a single shareholder may found a GmbH. The main reason why an individual would carry out business not as sole proprietorship but as a GmbH is that the company and the shareholders are legally separate. More stringent liability provisions for managing directors and the fact that loans to GmbHs are less and less frequently granted without a personal declaration of liability of the shareholders or managing directors have neutralised the advantage of this specific corporate form. 

Legal bases:

Law on Limited Liability Companies (GmbH-Gesetz, GmbHG)

Checklist: Articles of Association (german)

Find info sheets on company and corporate forms in Austria which are published by the founder service of the Austrian Federal Economic Chamber offer in-depth information: (search term GmbH)