{"text_format":"2","workbook":"xlsx","n_sheets":2,"sheets":["Coversheet","Social Enterprise Law Surveys"],"not_rendered":{"charts":0,"images":1,"macros":0,"external_links":0,"defined_names":0,"comments":0,"pivot_tables":0},"unopened":[],"bounds":{"document_bytes":16777216,"sheet_cells":100000,"run_cost":"one","rows_first":2000,"rows_last":500,"rows_between":2000,"halvings":0,"cell_chars":16384,"cell_head_chars":4096},"cells_cut":0,"cells_raw":0,"read":"whole","date_system":"1900"}

{"sheet":"Coversheet","index":0,"n_rows":12,"n_cols":3,"rows_kept":12,"cut":false,"hidden":false,"merged":[]}
[]
[]
[null,"Prepared By:","Contributors:"]
[null,"CERHA HEMPEL Rechtsanwälte GmbH"]
[]
[]
[]
["Social Enterprise Law Surveys"]
[]
["Report Generated: 5/2/2025"]
[]
["View your report results on next tab"]

{"sheet":"Social Enterprise Law Surveys","index":1,"n_rows":44,"n_cols":2,"rows_kept":44,"cut":false,"hidden":false,"merged":[]}
["Question","Austria"]
["I. Enterprise Form"]
["What jurisdiction(s) do you practice in?","Austria\n"]
["What are the most commonly used types of for-profit corporate organizational forms in your jurisdiction (e.g., corporation, limited liability company, benefit corporation, social purpose corporation, etc.) used by Enterprises operating a trade or business (rather than for investment or holding company purposes)? Please briefly describe these forms. a. Of these, which are the most common for-profit organizational forms used by Enterprises seeking financing from investors and that will have multiple owners? b. Other than organizational forms specifically designed for Social Enterprises (and discussed below under Question 4), which, if any, are the most common for-profit organizational forms used by Social Enterprises?"," The most common types of for-profit corporate organizational forms are: \n\n \n\t Stock Corporation (Aktiengesellschaft - AG) : The AG is a legal person, and it is liable for its liabilities (limited liablity of shareholders). The company must have a minimum registered share capital of € 70,000. Austrian capital maintenance rules apply to the AG, i.e. generally only the retained earnings shown in the annual financial statements may be distributed, the other assets are restricted. The AG has a tripartite organizational concept (general meeting, supervisory board, management board). The AG is managed by the management board, under the supervision of, and partly also in co-operation with, the supervisory board. The general meeting of shareholders only has the right to participate in fundamental decisions; it has generally no right of initiative or to issue instructions. Apart from fundamental decisions, it is entitled to make a decision if the management board or the supervisory board present matters for resolution. The general meeting elects the supervisory board, which in turn appoints the management board. The management board should manage the business independently from the shareholders. \n\t Limited Liability Company (Gesellschaft mit beschränkter Haftung -GmbH) : The GmbH is a legal person, and it is liable for its liabilities (limited liability of shareholders). The company must have a minimum registered share capital of € 35,000. Austrian capital maintenance rules apply (cf. above). The shareholders appoint and recall the managing directors of the company. The managing directors have to run the business. The shareholders have to approve extraordinary measures or measures conferred to them by law or the AoA by way of a shareholders’ resolution. Shareholders have the right to issue binding instructions to the managing directors and the right to take control of relevant matters. Therefore, a high degree of decision-making power is concentrated at the level of the shareholders. A supervisory board is only to be appointed if certain prerequisites are met, e.g. when a certain number of employees is exceeded or a certain share capital and a certain number of shareholders are reached, or otherwise may be installed voluntarily.  \n\t Open Partnership (Offene Gesellschaft - OG): The OG is characterized by the fact that it has legal capacity and, in addition to the partnership, all partners are – without limitation - liable with their entire assets for the liabilities of the company. The shareholders are entitled and obliged to manage the company by virtue of their membership. The departure of a partner leads to the dissolution of the company, unless the AoA provide for a different regulation, so there is a strong personal bond. \n\t Limited Partnership (Kommanditgesellschaft - KG):  The structure of the KG is characterized by the existence of two classes of partners. In addition to the managing general partners with unlimited liability, limited partners are also involved, who are only liable for the company's liabilities up to a certain amount. In turn, they are not involved in the management of the company, but only have the right to participate in certain fundamental decisions. The departure of a limited partner does not affect the existence of the company. \n \n\n a. AG and GmbH \n\n b. The most common for-profit organizational forms used by Social Enterprises are: \n\n \n\t GmbH \n\t Association (Verein) : An association is a legal entity formed by members for the pursuit of a specific purpose. The association may only pursue idealistic purposes and may not be profit-oriented. An association may be entrepreneurial as long as this serves the pursuit of the ideal purpose, but the income may not be distributed to the members. The association is managed by a management body (board of directors). The general assembly decides on fundamental issues. \n \n\n   \n"]
["Do any of your jurisdiction’s traditional organizational forms require or permit the board or managers to consider, balance or prioritize interests other than shareholder value in decision making? What other interests, if any, are they required to or allowed to consider (e.g., interests of employees, customers, the environment, etc.)?","The shareholder value is as such not an interest to be generally considered by the management of Austrian organizational forms. \n\n\nRegarding the AG, according to statutory law, the “management board is responsible for managing the company as required for the good of the company, taking into account the interests of the shareholders and employees as well as the public interest”. The good of the company is always paramount in the decision-making of the management board. The “public interest” may also include Corporate Social Responsibility considerations, such as environmental measures.\nFor other legal forms, there are no statutory regulations on taking other interests than the good of the company into account. However, the management may take such considerations into amount as long as the good of the company is the primary focus.  \n"]
["Does your jurisdiction have organizational forms specifically designed for Social Enterprises? If so: a. What type(s) of organizational forms are they? b. How do they materially differ from the most closely analogous traditional organizational form? c. What are the main benefits for founders and funders of such organizational forms? d. Are there any restrictions on the use of these organizational forms (such as profit-caps, stakeholder involvement and impact reporting)? If there are, what are they? e. Are there any material differences in timing or costs for forming a Social Enterprise versus a traditional Enterprise? f. How prevalent and well known are Social Enterprise forms?"," Austria does not have specific organizational forms for Social Enterprises per se. However, there are organizational forms that are designed to be Nonprofit.  \n\n \n\t Organizational forms designed to be Nonprofit are the charitable Trust and the charitable Fund. Furthermore, GmbH, Association and Trust can be accordingly designed to be regarded Nonprofit.  \n\t Charitable Trust and charitable Fund are characterized in the way that being Nonprofit is a prerequisite for the incorporation. Additionally, they have to remain Nonprofit. GmbH, Association and Trust, if supposed to be Nonprofit, only become officially Nonprofit after their incorporation and once the tax authority has assessed their Nonprofit status. Nonprofit organizational forms have certain tax benefits and proceeds may not be distributed.  \n\t The main advantages for founders are certain tax exemptions. \n\t Charitable Trust and Fund have to remain Nonprofit; otherwise they may be dissolved ex officio by the competent authorities. The assets of a charitable Trust must not fall under € 50,000. Assets of the charitable Trust and Fund may only be used for the respective purpose, which has to be Nonprofit. If Nonprofit GmbH, Association or Trust lose their Nonprofit status, it will have tax impacts. \n\t Charitable Trusts and Funds are assessed by the tax authorities on their Nonprofit compliance prior to their incorporation, which can extend the formation process and accrue additional tax advisory costs.  \n\t Charitable Trusts and Funds are relatively rare.  \n\tNonprofit GmbH, Association and Trust can be considered well known and are often used for Social Enterprises.  \n \n"]
["Are Social Enterprises permitted to be formed and operated as Nonprofits? If so: a. Are Nonprofits that are Social Enterprises treated differently under the law as compared to Nonprofits that are not Social Enterprises, whether from a corporate, tax or other perspective? b. Are there any material benefits of, and/or restrictions on, using a Nonprofit form for Social Enterprises that does not apply to Nonprofits that are not Social Enterprises? c. Is there any type of “hybrid” Nonprofit form that requires less reporting and/or allows for faster formation? If so, please describe the drawbacks of utilizing this form (i.e. fewer tax benefits). d. How prevalent is the use of Nonprofits for Social Enterprises?"," Yes, if they fulfill the Nonprofit requirements under Austrian tax law.  \n\n \n\t All Nonprofit entities, whether a Social Enterprise or not, are treated the same. \n\t N/A \n\t There is no “hybrid” Nonprofit form available in Austria. The Nonprofit form that requires the least amount of reporting and a fast formation is the Nonprofit association.   \n\t As mentioned the use of Nonprofits for Social Enterprises is by far prevalent \n \n"]
["Does your jurisdiction allow for worker-owned Enterprises, such as cooperatives? If so, please describe any material benefits of, and/or restrictions on, using such forms.","Austrian law does not have statutory regulations regarding worker-owned Enterprises. However, workers may participate in the Enterprise they are working for, which can be for example organized as an AG or GmbH. \n"]
["Are there unique reporting requirements for Social Enterprises? If there are, please describe them. Please also discuss what government bodies Social Enterprises are required to report to.","No special reporting requirements for Social Enterprises do exist, except that Nonprofit organizations may be subject to audits by the tax authorities to verify the Nonprofit status. \n"]
["In your jurisdiction, has case law and jurisprudence evolved to address Social Enterprises? If there is meaningful jurisprudence around Social Enterprises, please provide some brief examples."," There is no specific case law on Social Enterprises in general. However, there is case law regarding Nonprofit organizations:  \n\n \n\t Austrian Supreme Court 6 Ob 233/20 p : In a case dating from Dec. 2020, the Austrian Supreme Court clarified that a non-profit real estate company in form of an LLC was obliged to seek the consent of the federal state government before performing a share deal – so far, the requirement of the federal government’s consent had only applied to cooperatives (Genossenschaften) according to the Austrian Non-Profit Housing Act WGG.    \n\t Austrian Supreme Court 3 Ob 71/05 w; 7 Ob 146/07 g; 3 Ob210/11 w : In several decisions, the Austrian Supreme Court clarified that the non-profit qualification of an enterprise (as well as its connected privileges such as tax exemptions) is not lost, if the social benefit of the enterprise is only available to a limited amount of people, e.g. its members.    \n\t Austrian Supreme Court 4 Ob 382/87; 3 Ob77/92; 5 Ob 34/03 s : The Supreme Court also stated explicitly that LLCs might be used for non-profit purposes and has repeated this decision since.   \n \n"]
["Does your jurisdiction have any ESG requirements for Enterprises generally? If it does, please describe.","A lot of environmental, social and governance requirements for Enterprises do exist. \n"]
["Does your jurisdiction have any ESG requirements specifically for Social Enterprises? If it does, please describe.","No specific ESG requirements for Social Enterprises. However, large corporations that are companies of public interest and meet the criterion of employing more than 500 employees on average as of the end of a financial year have to include a so-called non-financial declaration in the documentation of their financial statements. The non-financial declaration must not only contain the information that is necessary for an understanding of the course of business and the business results, but also information on the situation of the company and the effects of its activities which relate at least to environmental, social and employee issues, to the observance of human rights and to anti-corruption and anti-bribery measures. The analysis has to explain the non-financial performance indicators with reference to the amounts and information disclosed in the financial statements. \n"]
["Does your jurisdiction have any ESG requirements for investors? If it does, please describe.","No specific ESG requirements for investors.\n"]
["II. Funding"]
["Are any major investor classes (e.g., pension funds, mutual funds, etc.) required to look at ESG issues when making investment decisions in your jurisdiction? a. If they are, please describe the requirements. b. If they are not, are they permitted to consider such factors? c. What other relevant factors do investors tend to consider (aside from profit motive)."," No. \n\n \n\t N/A \n\t ESG factors may be considered volunarily. \n\t Investors consider business perspectives, market positions, etc. \n \n"]
["What kinds of philanthropic funding do Social Enterprises in your jurisdiction commonly receive (e.g., grants, charitable investment, traditional investment)?","All kinds of philanthropic funding are used, as long as the Enterprise is on a Nonprofit basis. \n"]
["How prevalent, if at all, are new for-profit impact investments in your jurisdiction (e.g. traditional instruments with impact terms, new investment instruments, aggregation with philanthropic capital, community based funding, etc.)?","A general trend towards impact investments can also be observed in Austria.\n"]
["What are the types of government funding and support available to Social Enterprises, if any, available in your jurisdiction (e.g., grants, investments, bonds, and guarantees)? a. How difficult is it for Social Enterprises to obtain government funding? b. Is any government funding limited to Enterprises incorporated using Social Enterprise forms?"," There is no special type of government funding or support exclusively available to Social Enterprises, or tailored to their needs. Social Enterprises can apply for government funding or grants like any other social organization (NGOs, Foundations etc.). These fundings very often do not meet the needs of Social Enterprises.   \n\n \n\t To get government funding is difficult for Social Enterprises, especially as it is impossible to get funding and run a social business (have income streams) at the same time, even for Not-for-profit enterprises.  \n\t No. \n \n"]
["Are there any companies that are formed as a Social Enterprise listed on your jurisdiction’s leading securities exchange(s)?","No Social Enterprise is listed on a stock exchange in Austria.\n"]
["To what extent are publicly traded Enterprises required to disclose ESG related factors in annual reports/public filings in your jurisdiction.","Publicly traded Enterprises have to provide ESG related factors in their annual corporate governance report. \n"]
["How prevalent, if at all, are impact bonds in your jurisdiction?","So far only one impact bond was issued in Austria.\n"]
["In your jurisdiction, are there any restrictions on foreign investments or donations that are unique to Social Enterprises (whether incorporated as for profit entities or as Nonprofits)?","No specific restrictions on foreign investment or donations that are unique to Social Enterprises. \n"]
["Is “crowdfunding” legal in your jurisdiction? Are there rules under applicable securities laws that make it easier for smaller businesses or Social Enterprises to take money from investors that are not sophisticated/accredited/qualified under applicable statutes?","Crowdfunding is legal, not only for non-profit purposes. Securities laws specific for smaller businesses don’t exist. \n"]
["III. Tax"]
["Are there any tax exemptions that are uniquely available for Social Enterprises? a. Please describe any tax exemptions that are available and whether they are partial or full. b. Are they dependent on the Social Enterprise utilized using a specific organizational form (e.g., for profit vs. Nonprofit form)? c. Please describe any other key requirements of the available tax exemptions (e.g., restrictions on sources or uses of funds, restrictions on commercial activities, etc.)."," There are tax exemptions available for charitable (non-profit) organizations, but there are no specific tax exemptions that are uniquely available for Social Enterprises using a for-profit organizational form.  \n\n a. Charitable organizations benefit from exemptions in particular from corporate income tax (partial), VAT (partial), municipality tax (on salaries) and various transfer taxes. Donations to such organizations are exempt from corporate income tax. \n\n b. A particular legal form for social enterprises does not exist. The status of a charitable organization can be obtained by almost all legal forms. However it must be a non-profit organization. \n\n c. Charitable organizations are organizations that pursue goals of public benefit and whose assets are solely and directly used to achieve this goal. A goal of public benefit is deemed “when its implementation supports the community at large in intellectual, cultural, moral or material terms (promotion of health care, art and science, care for the elderly, public education, nature etc.)”. \n\n \n\t Charitable organizations may run a non-profit business. \n\t If a charitable organizations runs a business, the tax impacts of running such business (i.e. if profits of such business are taxable, tax-exempt or if the business leads to the denial of tax benefits to the organization as a whole), depend on the type of business:\n\t \n\t\t  If it is a business that directly serves the charitable purpose and the purpose cannot be achieved otherwise than through the business, then a full tax exemption from corporate income tax can be granted for this business (e.g. a hospital run by a charitable organization). \n\t\t If the business indirectly achieves the purpose, the profits of this business are taxable, but the charitable organization does not lose its tax-exempt status as a whole (e.g. a fund raising event combined with a promotion of the charitable purpose). \n\t\t If the business run by the charitable organization does not have any charitable purpose and does not even indirectly serve this purpose (e.g. trading goods that have no link to the charitable purpose) the organization loses its tax-exempt status as a whole. This is also the case if the organization carries out an economic activity aiming for profit. \n\t \n\t \n\t Generally, the organization may not pursue any purposes other than charitable, benevolent or ecclesiastical purposes, except for completely subordinate secondary purposes  \n\t The organization may not seek to make a profit. The members may not receive any shares in the profits and, in their capacity as members, may not receive any other benefits from the funds of the organization.  \n\t The articles of association and the actual management of the organization must explicitly include and promote an exclusive and direct activity for a public benefit purpose.   \n\t Upon their withdrawal or upon the dissolution or annulment of the organization, the members may not receive more than their paid-up capital shares and the fair market value of their contributions in kind, which is to be calculated according to the time at which the contributions were made  \n\t The organization may not favor any person by administrative expenses which are not related to the purpose of the organization or by disproportionately high remuneration (salaries of the executive board or supervisory board).  \n\t In the event of the dissolution or termination of the corporation or in the event that its previous purpose ceases to exist, the assets of the corporation, insofar as they exceed the paid-in capital shares of the members and the fair value of the contributions in kind made by the members, may only be used for charitable, benevolent or ecclesiastical purposes.  \n \n\n   \n"]
["Are individuals or other organizations able to provide tax deductible donations to for-profit Social Enterprises? If they are, please describe any restrictions applicable to tax deductible donations?","No, only donations to charitable (non-profit) organizations are tax deductible. \n"]
["Are there any other tax benefits uniquely available for Social Enterprises? (e.g. deferrals, favorable tax rates, business deductions, etc.)","No.\n"]
["Does your jurisdiction provide for reciprocal recognition of tax-exempt status that has been granted under the law of any other jurisdictions?","No. Only bilateral or multilateral agreements to which Austria is a party and which have been ratified by the Austrian parliament may grant tax benefits to such organizations. There is no automatic recognition of a tax-exempt status by way of reciprocity. \n"]
["IV. Governmental Infrastructure"]
["Does your jurisdiction have Regulatory Sandboxes or similar policy frameworks for Social Enterprises? If it does, please describe.","No.\n"]
["What government operational support, resources, training or services, are available for small businesses or Social Enterprises?"," Government Support-GD \n\n \n\t SENA: Social Entrepreneurship Network Austria offers lobbying and advice to entrepreneurs \n\t Federal Ministry of Digital and Economic Affaires offers several initiatives aimed at social start-ups and innovations \n\t Social entrepreneurship center at the Vienna University of Economics and Business (WU) \n \n"]
["Are there different compliance requirements for different types of Social Enterprises than for traditional Enterprises? Please provide examples if there are.","No.\n"]
["Is there a dedicated government agency or department that oversees Social Enterprises? If there is, please describe its mandate and effectiveness.","No.\n"]
["Is there a different bankruptcy system available for Social Enterprises?","No.\n"]
["VI. Miscellaneous"]
["What are the average time and filing fees to form an Enterprise in your jurisdiction?","This depends heavily on and varies according to the type of organizational form chosen for the Enterprise. \n\n\nExemptions from certain fees are available for new founders under the Newly Founded Funding Act (NeuFöG). \n"]
["What government or third-party certifications or accreditations, if any, are available for Social Enterprises that allow for access to benefits e.g. funding, beneficial tax status, etc.? Please provide examples and briefly describe them as well as the standards there are to maintain them.","Nonprofit status, required for tax benefits, is dependent on a corresponding assessment of the competent tax authority acknowledging the Nonprofit status. Only Enterprises that pursue charitable, benevolent or ecclesiastical purposes can be Nonprofit. The prerequisite is the exclusive promotion of this purpose. Furthermore, these principles must be fully anchored in the incorporation documents (e.g. AoA) and actually adhered to in the context of day-to-day business. \n"]
["Please describe whether, in your opinion, startups and other entrepreneurial Enterprises generally can easily form and flourish in your jurisdiction.","Generally Enterprises can easily be formed and flourish. However, there is always room for improvement, e.g. simplification of the founding process of GmbH and AG, more digitalization, de-regulation of certain areas (e.g. trade law) etc. (see for further comments below under V.5.) \n"]
["Please describe whether, in your opinion, Social Enterprises, in particular, can easily form and flourish in your jurisdiction.","Social Enterprises can easily form and flourish.\n"]
["Please describe whether in your opinion there are any laws that are obstructive to the formation of Social Enterprises (i.e. that actively disfavor or penalize, or otherwise discourage their formation) in your jurisdiction (for example, are Social Enterprises subject to legislation prohibiting inclusion of Social Enterprises in government contract procurement)?"," There are no laws that actively discourage Social Enterprises, but some regulations represent obstacles to potential founders:   \n\n \n\t Formalities for the formation of companies are complex, expensive and time-consuming, and often require the mandatory involvement of a notary \n\t Tax exemptions are only available in a narrow frame for non-profit enterprises (as stated above in III. 1.c) and can always be retrieved by the respective tax authority. \n\t The same applies to public funding, where a transition from non-profit to for-profit could lead to a loss of funds. \n \n"]
["In your jurisdiction, are there any major fraud concerns or defects due to corruption or fraud that should be addressed? If there are, please briefly discuss the concerns or defects.","No.\n"]
["What changes to the law do you think would be most beneficial to enabling Social Enterprises to flourish in your jurisdiction?"," \n\t Creation of a new organizational form, specifically for social enterprises (the so-called “S-GmbH” – i.e. a “Social LLC” – has frequently been suggested, but not implemented yet) \n\t Separate register for social enterprises to ensure reliability and enhance public visibility \n\t Benefits in terms of reductions of non-wage labor costs for social enterprises \n\t Less administrative obstacles, creation of a “one-stop-shop” for social enterprises \n\t Support on a local level and cooperation with for-profit companies \n\t Funding opportunities specifically for social enterprises \n\t Legal basis for a certificate for social enterprises to improve visibility \n \n"]
["What changes to the law do you think would be most beneficial to enhancing the social and environmental responsibility of Enterprises generally (whether or not Social Enterprises)?"," \n\t Different tax regimes that give social enterprises advantages if they achieve measurable social impact \n\t  Different tax regimes for nonprofit organizations like Foundations, to enable them to more easily invest in Social Enterprises \n\t Implementation of social bonds \n\t Enable Social Enterprises to get public funding even while running their business and generating income \n \n"]
["Is there anything else you would like to add or guidance you would like to provide? Are there any questions we should have asked but did not?","No.\n"]