The Austrian Justice Department actually wanted to lower the minimum share capital of the Austrian Limited Liability Company to 10,000 Euros. This should be a response in the international competition of the legal forms. But even now it is coming to an increase to 39,000 Euros.

Insolvency Law Reform brings Increase in the Minimum Capital

Franz Mohr, director responsible, states that according to the newspaper Die Presse.com from 26.07.2009, a group of law makers of the Austrian Justice Department plan to tighten the liability of shareholders at the occasion of an insolvency law reform.

Shareholders with more than 25% equity shall be liable for 4,000 Euro start-up costs of a bankruptcy proceeding in future.

That this amounts to a result in an increase in the minimum capital to 39.000 Euro, has apparently been overlooked.

Until now  the directors of a Limited Liability Company are liable for 4,000 Euro start-up costs of bankruptcy proceedings) (Bankruptcy Act Sec. 72a).

Hidden Increase to 39,000 Euros

You can twist and turn as you want: These plans mean an increase in the minimum share capital of the Limited Liability Company at 4,000 Euros.

All recent efforts in reaching international standards by a reduction in the minimum share capital of the LLC initially taken up by the Justice Department itself, are thus thwarted within their own house.

Reform of the Law of the Limited Liability Company undone

However,  in January 2008 Ms Berger was by the then the Minister of Justice. She announced an upcoming reform of the law of the limited liability company, which should also include a reduction of minimum capital.

I understand that they now are waiting in the Ministry of Justice to begin work on the reform of the Limited Liability Company until the future European Private Company has been introduced at EU level. The European Private Company shall then be the focus on the reform of the Austrian Limited Liability Company.

The European Private Company is of the EU, however, planned for July 2010.

The Austrian insolvency law reform shall come into force already in early 2010. This means that in Austria there will then be an increase in the minimum capital of a limited company totalling 39,000 Euro. This instead of a decrease which was originally anticipated.

That is indeed untimely and therefore to be strictly rejected.