The situation
Two founders’ plans for a software business with an investor and staff equity
Two founders, one in Munich and one in Salzburg, are building booking software for dental practices. An angel investor is ready to put in €150,000, and they want to give their first developers a share of the upside. They ask your firm which company form to use, and in which country.
Each form is simple to describe. The time goes on comparing them on the points that matter to these founders: capital needed now, the cost and formalities of formation and of later share transfers, how an investor and employees can come in, and how profits are taxed while the money stays in the company.
What the research has to settle
The rules behind the answer
- Minimum capital differs
- A German GmbH needs share capital of €25,000, of which at least €12,500 must be paid in before registration. The UG is a GmbH variant that can start with almost no capital but must retain part of its profits until it can convert. Austria lowered the GmbH minimum capital to €10,000 from 2024.
- Austria’s FlexCo is built for start-ups
- Since 2024 Austria also offers the Flexible Company, a corporation with the same minimum capital as the GmbH, lighter formalities for share transfers and company value shares that let employees share in profits without full shareholder rights.
- Formation goes through a notary
- In both countries a GmbH is formed by notarial deed and registered in the commercial register, and transfers of GmbH shares need notarial form. Both countries now allow formation by remote notarisation in certain cases.
- Tax follows the form
- A corporation is taxed on its profits and shareholders again on distributions, with relief that differs by country. Austria charges a minimum corporation tax even in loss years, and German business profits also bear trade tax. Partnerships and sole traders are taxed at the owners’ level instead.
How it runs in azta
From the question to the document
The question, as you would type it
Two founders, Munich and Salzburg, software start-up, €150,000 from an angel investor, employee participation planned early. Compare a German GmbH, a UG, an Austrian GmbH and a FlexCo on capital, formation, share transfers, employee participation and taxation of retained profits.
You start with
Two founders’ plans for a software business with an investor and staff equity
- 01
Set out the founders’ plans
Describe the founders, the investor, the employee equity plan and where everyone works. azta searches the German and Austrian company and tax acts.
Cited research· Free - 02
Read the company acts
Open the cited provisions on capital, formation and share transfers in the statute reader, in German as enacted, with their in-force status.
Atlas statute reader - 03
Ask about the tax side
Ask how retained and distributed profits are taxed in each form and country, and how employee participation is taxed. Each answer cites the provisions it rests on.
Cited research· Free - 04
Write the comparison
Ask for a memo with a comparison table and a recommendation section for you to complete. Edit it in Canvas and export it to Word.
Canvas · Ask azta· Pro You send
A memo comparing the available company forms in Germany and Austria
What you get
A memo comparing the available company forms in Germany and Austria
Memo · draft
Choice of company form: German GmbH, UG, Austrian GmbH or FlexCo
Summary. A UG would let you start with very little capital, but with €150,000 committed, capital is not the deciding point. The realistic choice is between a German GmbH and an Austrian FlexCo, and it turns mainly on how you want to bring in employees.
Employee participation. The FlexCo can issue company value shares to employees, giving them a share in profits and exit proceeds without voting rights, with lighter formalities than ordinary shares. A German GmbH would need a virtual share programme or direct shareholdings, each with its own tax treatment for the employees.
Where to incorporate. The country of the company’s seat decides which corporation tax, trade or minimum tax and notarial formalities apply. Where the founders and staff work also matters, because managing the company from the other country can raise questions of tax residence; section 4 sets these out.
Outcomes on your numbers
What azta is worth on this task
Pro pays for itself after
11 minutes a month
At €150 an hour, that is all the time Pro (€27 a month) has to take off your desk to cover its price.
Example figures. Replace them with your own.
- Hours back a year
- 36
- Capacity at your rate
- €5,400
- More company-form memos a quarter
- 1.5
- Return on Pro
- 16.7×
- Research
- Drafting
- Your review
A scenario you set, not a promise. The hours that come back go to another client, or deeper into this one.
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Book a demoSources azta searches here
- Gesetze im Internet
- RIS
- Rechtsprechung im Internet
What stays with you
- The founders’ plans, which often change after the first conversation.
- The recommendation, which weighs more than the law.
- Coordination with the notary and the founders’ lawyer.
Frequently asked questions
- Does azta draft the articles of association?
- It can draft a first version in Canvas from your instructions, citing the requirements of the company act. The notarised deed and its final wording stay with the notary.
- Can it compare forms in other countries?
- Yes. Ask about any country in its source register; the answer cites each national company act.
- Are the capital figures current?
- Legislation is indexed daily and every citation shows the in-force status, so you can confirm the current figure in the act itself.
