Year one of FlexCo: strategic insights and lessons learned

The FlexCo combines elements of the Austrian joint stock company (AG) and limited liability company (GmbH). It thus bridges the gap between the traditional GmbH, which is sometimes perceived as falling short of modern business demands, and the AG, which is more suited to larger enterprises. Most of the FlexCo's features are optional, offering flexibility to tailor the company's structure to specific needs.

FlexCo in numbers

The launch of the FlexCo generated considerable enthusiasm and quickly became a central topic in Austrian corporate law. By the end of November 2024, there have been 12,194 GmbH registrations and 666 FlexCo registrations , i.e. a ratio of about 95 % GmbH registrations and about 5 % FlexCo registrations. A preliminary assessment of the Commercial Register indicates that, despite a few hundred FlexCo foundations, the GmbH remains by far the preferred company form in Austria. While FlexCo registrations have shown an almost linear trend following a peak in March 2024, GmbH registrations experienced a slight decline during the summer, followed by an upward trend starting in September and a decline in registrations in October and November.

Initial expectations and reality

The FlexCo was designed to simplify capital measures and was expected to appeal to both start-ups and small and mediumsized enterprises (SMEs). However, the numbers suggest that entrepreneurs still prefer the GmbH to the FlexCo due to its familiarity, extensive legal precedents and international recognition. While clients find the FlexCo intriguing, they often choose a GmbH due to the unfamiliarity and legal uncertainties associated with the FlexCo.

Our FlexCo self-experiment

To gain hands-on experience and explore the diverse opportunities presented by the new corporate form, we established one of the first FlexCos in Austria in January 2024. Our experimental FlexCo, "OE Erste SR PG IPT FlexCo", served as a testing ground for various innovative features permitted within FlexCos.

The company was formed on 1 January 2024 and registered in the Commercial Register by 3 January 2024. On 12 January 2024, we executed the first share transfers certified via a notarial private deed and an attorney's private deed. We utilised authorised capital and issued company value shares at the end of January 2024 and registered a conditional capital increase in April 2024. You can learn more about our self-experiment by visiting our FlexCo information page.

To sum up, the FlexCo represents a significant addition to Austria's corporate landscape, offering a flexible and modern alternative to the traditional GmbH. With its innovative features and advantages, the FlexCo is poised to become an increasingly popular choice for new businesses in Austria. While it may take time for the FlexCo to gain widespread recognition, its potential benefits make it a compelling option for entrepreneurs and companies looking for a dynamic and adaptable corporate structure 

authors: Niklas Kerschbaumer, Dina Mutevelic