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Digitale GmbH Founding

The main reason is the liability privilege of the shareholders. Accordingly, only the company assets can be used to meet the liabilities of the GmbH, but not the personal assets of the shareholders. As an exception, the shareholders can be held directly liable for liabilities in some specified cases ("direct liability" e.g. in the case of a qualified undercapitalisation of the company). The GmbH must have a share capital of at least € 35,000, of which at least half has to be paid in at the time the company is founded. However, by taking advantage of the so-called "foundation privilege", there is the possibility to specify an original cash contribution in line with this foundation privilege which only has to equal € 10,000 in the first ten years of the company's existence. At least half of this amount has to be paid in cash at the time of the company's founding. In this way, young entrepreneurs in particular who do not yet have sufficient capital gain easier access to a secure legal form.

In essence, the following steps are required to establish a GmbH:

  • Drawing up and signing of the declaration of foundation (articles of association)
  • Appointment of the managing director
  • Specimen signature statement by the managing director
  • Payment of the cash contribution (in line with the foundation privilege if applicable)
  • Entry in the Commercial Registry

These steps can now be implemented electronically without the necessity of the founders having to leave their desks. Border closings and curfews do not prevent the founding of an Austrian GmbH. The possibility of digitally establishing a GmbH is legally regulated in the Electronic Notarial Form Foundation Act (German: Elektronische Notariatsform-Gründungsgesetz, ENG).

People and the economy will continue to need notarial services, and notaries are also available to their clients in digital space. Previously, founders had to personally be present to authenticate and notarise the signature or for a notarial deed. Now there is the possibility to visit a virtual notary firm on the Internet and to conclude the notarial deed per video conference.

Moreover, founders abroad can also avail themselves of the possibility of a digital notarisation. The notarisation itself is considered to have been performed in Austria and is recognised as such by Austrian courts and public authorities. In turn, this means that additional costs and efforts (e.g. for authentication) can be avoided.

The articles of association must be implemented in the form of a notarial deed. The intent and purpose of a notarial deed is to protect shareholders on the basis of the obligation on the part of the notary to provide advice and instruct. The form of a public document also protects the general public itself because this approach ensures legal certainty and reliability of the business transaction.

The Austrian Commercial Registry has high standards, and thus facilitates business transactions. If a company is entered in the Commercial Registry, the contractual partners can rely on the fact that this company actually exists, and they know who their contact person is as managing director.

Procedure of the digital GmbH founding

The founders no longer have to personally go to see the notary but can be connected to the notary via a video conference and implement the necessary steps online. To do so, the prospective founders are first subject to a corresponding identification process (WebID). For this purpose, the founders have to fill out a data sheet and make it available to the notary. Subsequently the founders receive an email or SMS with an invitation to implement the WebID procedure in order to verify their identity on the basis of a passport or identity card.

The notary then receives the appropriate identification data in an electronic data room set up specifically for the purpose of founding the GmbH. The data room provider also simultaneously creates an electronic mobile signature required for the rest of the digital founding process.

All documents/certificates which need to be signed are uploaded by the notary in the data room. The subsequent discussions between the founders and the notary either take place per telephone and email or via video conference. The notarial deed of the declaration of foundation or articles of association is read out loud by the notary via video conference and subsequently signed by the parties to the agreement using their mobile electronic signature.

Then the notary adds his official countersignature with a special signature card. The result of the digital founding is a "genuine electronic document". It is digitally available in its original form and thus the printing or scanning of the notarial deed is no longer necessary. The signed documents are digitally conveyed to the responsible commercial court.

In addition to the articles of association, the documents relating to the appointment of the managing director (by means of a shareholders' resolution and specimen signature of the managing director) and the entry into the Commercial Registry must be certified by a notary public. These steps can also be digitally performed on the basis of a secure video connection.

It is important that the notary maintains a consistent optical and acoustic two-way connection in real time during the certification process. If the connection is temporarily interrupted, the notary must wait with the implementation of the notarial deed and first continue when the connection is fully established again. This not only applies to the notarial deed but of course also for the notarial attestation of signatures. In this case, the notary also makes an optical comparison between the document electronically conveyed to him and the present document of the party involved after the signature has been put to the document, amongst other steps (Section 79 Para. 9 Federal Notarial Code).

Due to legal stipulations and technical security requirements, it can be ensured that the identification obligations on the part of the notary and the obligation to instruct and provide assistance to all parties involved in the transaction are reliably enabled and fulfilled. For this reason, digital notarisation is not possible via applications such as WhatsApp, Signal etc.

Other digital notarisation possibilities

At the present time, it is necessary to reduce personal contact among people to what is strictly necessary as a means of preventing the spread of COVID-19. However, people and the economy still need notarial services and secure certificates.

The coming into effect of the Fourth COVID-19 Act has stipulated the possibility to digitally process most notarial certification procedures in addition to the digital GmbH founding. In this way, an alternative has been created to the "conventional certification model", which specifies that the parties involved have to personally appear before the notary in order to authenticate signatures or implement a notarial deed.

Pursuant to Section 90a Federal Notarial Code, notarial deeds or other public and publicly certified documents can be carried out digitally in order to prevent the spread of COVID-19. The procedure largely conforms to the work steps similar to the digital GmbH founding pursuant to Section 69b Federal Notarial Code.
Accordingly, the notary sets up a secure data room for the authentication process in which the documents to be signed and evidenced are uploaded. In order to obtain access to this data room, the parties are subject to a video identification procedure (WebID) upon invitation by the notary. This procedure must fulfil the requirements stipulated in Section 69b Para 2 Federal Notarial Code as well as the Notary E-Identification Regulation (NEIV). The personal data required for this purpose must be made available to the notary by filling out a personal data form.

NHP Notare would be happy to provide you with more detailed information about the WebID procedure upon request after you have been invited to the data room.

The electronic certification by the notary within the context of a video conference can first be carried out when all the parties involved have access to the data room. The parties involved will receive the invitation to the video conference from the notary in a timely manner.

Moreover, founders abroad can also avail themselves of the possibility of a digital notarisation. The notarisation itself is considered to have been performed in Austria and is recognised as such by Austrian courts and public authorities. In turn, this means that additional costs and efforts (e.g. for authentication) can be avoided.

Digital notarisation through NHP notaries

The firm NHP Notare was the very first notary firm in Austria which established a digital GmbH in October 2019. In this way it has gained extensive experience in the new field of electronic notarial services.

In the meantime, NHP Notare has supported a capital increase of a GmbH, for example, with a general meeting and subscription deed implemented in the form of a digital notarial deed. Moreover, a new managing director was appointed digitally.

Furthermore, a general meeting of an unlisted public limited company was digitally notarised.

 

Here you can find more information about founding a GmbH (Ltd.) in Austria.

MMag. Dr. Philipp Nierlich LL.M.

Civil Law Notary and Certified Court Interpreter for English at nhp notare
nierlich@nhp.at

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