Congo, The Democratic Republic of
Law
- Law of Contracts, E-Commerce and Acquisition of a business
- Intellectual Property
- Antitrust and Merger Control
- Labour Law
- Currency Control, Income Tax and Corporate Tax
- Insolvency and Restructuring
- Court System, Arbitration and Attorneys-at-law
Law of Contracts, E-Commerce and Acquisition of a business
This article gives an overview of the basic principles of Austrian contract law and the E-Commerce Act. You can also find information about the prerequisites for foreign aquisitions and share-holding.
Law of Contracts
The legal framework on the law of contracts is set forth in the Austrian Civil Code and a newly enacted Uniform Commercial Code (UGB). The UGB governs all commercial transactions as of January 1, 2007.
Freedom of Contract
Freedom of contract is the underlying principle of Austrian contract law. The contracting parties are thus free to choose any terms suitable for a transaction, unless a contractual provision or covenant would render the agreement unconscionable or otherwise unlawful. A contract is defined as consenting declarations of an offer and a corresponding acceptance and in general, neither offer nor acceptance requires a specific form under Austrian law. Also oral agreements and, under restricted circumstances, agreements implied through action (tacit agreement) are legally binding and enforceable. Certain exceptions to this freedom of form apply with respect to securities and suretyship agreements, insurance contracts and certain agreements governed by consumer protection laws. These contracts must be made in writing to become effective. The even stricter form of a notarial deed is required to set up corporations and transfer shares held in a limited liability company.
Terms and Conditions
Business transactions are commonly subject to either of the contracting parties’ terms and conditions and Austrian law safeguards that such general terms pass a test of fairness and are not forced upon the other party.
Electronic Commerce
The Austrian E-Commerce Act implemented the European E-Commerce Directive and applies to services that are rendered via electronic processing and storage systems. Voice telephony, telefax or telex services are excluded from the scope of the Act. Those means of communication are covered under the provisions on distance contracts which are contained in the Austrian Consumer Protection Act.
Country-of-Origin Principle
According to the E-Commerce Directive and the E-Commerce Act, the country-of-origin-principal provides that the regulations apply where the service provider has its principal place of business. Consequently, a provider with a registered office in Austria must comply with the Austrian Trade Act and related regulations governing supply and distribution of goods and services. Once the Austrian requirements are met, however, the provider may also conduct its activities in other EU member states without additional requirements. Conversely, every provider with an establishment in another EU member state may conduct its activities in Austria if it complies with the provisions of its country of origin.
Contract Conclusion via Internet
Generally, contracts can be concluded over the internet and are governed by the same rules as other, more traditional contracting activities. One crucial aspect is, however, that promotion of goods on the internet does not constitute an offer but only a request addressed to a customer to make an offer. The contract is only perfect if and when the customers receive express acceptance/acknowledgement from the supplier or if goods ordered are subsequently delivered.
Acquisition of a business
Foreign individuals and entities can freely establish a company, acquire Austrian businesses and assume managing functions.
Setting up a Company
Austrian company law knows a variety of different types of companies and corporations. Due to its simple structure and limited liability, the Austrian Gesellschaft mit beschränkter Haftung (limited liability company) is commonly used to set up a business in Austria . The minimum equity capital amounts to Euro 35,000 of which 50 % must be made as a cash payment. Liability of the GmbH vis-à-vis third parties is capped at the amount of the contributed share capital. Foreign nationals and entities can assume the position of shareholder or founder without restrictions. Shareholders of a GmbH can directly influence and direct the actions of its managing board.
The Austrian Aktiengesellschaft (Stock Corporation) is slightly more complex and costlier to establish and administer. The minimum share capital amounts to Euro 70,000, the managing board is monitored by a supervisory board that has to have at least three members.
Nationals of foreign jurisdictions can also set up limited or unlimited partnerships (Offene Gesellschaft, Kommanditgesellschaft).
Company Management and Acquisition
However, prior to starting any business in Austria , the entity or partnership must apply for a trade permit. Certain business activities also require evidence that management of a business entity has the skills and faculties to conduct such a business. Legal entities must appoint a trade director (can also be managing director) who is liable for any violations of applicable trade regulations.
Foreigners and foreign entities can freely acquire shares in an Austrian company or purchase an on-going business. The acquisition of an Austrian business can be structured as an asset deal or a share deal.
All about Austria
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