Austria makes it permanently possible for GmbHs and AGs to hold virtual general meetings

With the enactment of the Virtuelle Gesellschafterversammlungen-Gesetz (VirtGesG) in mid-July 2023, Austrian lawmakers have created the permanent possibility for private limited liability companies (GmbH) and joint stock companies (AG) to convene general meetings virtually.

What are the key facts?

Shareholders can now convene a general meeting in three possible ways: 

• Physically; 
• Virtually: new – with exclusively virtual participation;
• Hybrid: new – with physical or virtual participation.

Virtual or hybrid general meetings can take place in two possible ways:

• Simple format: with the participation of shareholders in real time by way of an optical and acoustic two-way connection. 
• Moderated format: with a chairman and only optical and acoustic transmission in real time. Shareholders can make requests to speak via electronic communication (e.g. e-mail), but they must have the possibility of addressing the meeting via video.

What should your company do to hold a virtual meeting?

Firstly, the shareholders must amend their articles of association. A provision allowing for virtual (and hybrid) general meetings needs to be introduced. Thereby, the shareholders can decide whether general meetings should always be held virtually or whether the corporate body competent for convening the meeting will decide prior to each meeting. In the latter case, the decision must be based on the interests of the company and its shareholders.

Secondly, shareholders should specify the technical formalities (such as the choice of a certain provider) in either the articles of association or the management's by-laws. In order to avoid uncertainties in relation to technical issues (e.g., in case of interruptions in the internet connection), specific provisions on such issues and their consequences should be introduced in the articles or by-laws as well.

If your joint stock company (AG) is listed on a stock exchange (börsenotiert), further requirements will apply. For example, a provision in the articles of association allowing for virtual general meetings can only be introduced for a maximum of five years. Therefore, companies should be prepared to renew such provisions within this timeframe.
Many notaries already offer services for virtual meetings, thus making it possible to obtain a notarial certification of a virtual general meeting.  

What are the benefits for your company?

A definitive benefit is greater flexibility – especially for internationally based shareholders. Furthermore, virtual general meetings can enhance cost efficiency, and – if long travel is necessary – support the implementation of the company's ESG (Environmental, Social and Governance) policies. 

To read this specific law in the German language, see Virtuelle Gesellschafterversammlungen-Gesetz (271/ME) | Parlament Österreich

For more information on this law and its impact on your Austria-based business, contact your CMS client partner or these CMS experts: Peter Huber, Partner at CMS Austria, and Livia Landskron, Associate at CMS Austria.