Owing to freedom of establishment within the European Union, Austrian entrepreneurs may set up a private company limited by shares under British law. Characteristically for a ‘Limited’, not everyone, but only a limited number of shareholders, can acquire its shares. A ‘Limited’ requires at least two shareholders. Unlike the Austrian corporate forms, a ‘Limited’ does not have a minimum capital which the shareholders must contribute. This makes the ‘Limited’ highly attractive.
Formation of a Limited
In order to found a ‘Limited’, the rules of the British Companies Act must be complied with. In this context, two documents are relevant: the Memorandum of Association which governs the external relations of a ‘Limited’, and the Articles of Association which, as a complement, contain provisions on the internal relations. Both documents are required for entry in the companies register.
Content of a Memorandum of Association
- Name of the company, including the appendix “Limited” or “Ltd”
- Registered office in England, Wales, Scotland, Northern Ireland
- Purpose of business
- Limited liability of the shareholders
- Amount of capital in British pounds
- Number of shares
Content of the Articles of Association
- Amount of share capital with all rights and duties in respect of the shares
- Provisions on the right to issue shares
- Provisions how non-issued shares are to be treated
- Provisions on the general meeting of shareholders
- Provisions on the management of the company
- General administrative provisions
Establishment of an Austrian branch
After formation in England, Wales, Scotland or Northern Ireland, a branch of the ‘Limited’ may be opened in Austria. Following the Austrian Companies Code (Unternehmensgesetzbuch UGB), the foreign legal entity may be registered in the companies register if it has a branch in Austria.
Good to know
The registered office in the UK must however be maintained, the tax return must be filed at the place of incorporation. For about EUR 500, specialised agencies offer to handle all ongoing formalities.