When must an Austrian GmbH appoint a supervisory board because of more than 300 employees? Section 29 GmbHG explains the average and group rules.
An Austrian GmbH must appoint a supervisory board when its relevant average workforce exceeds 300 employees or another statutory case under section 29 GmbHG applies. A single unusually busy month therefore does not decide the issue.
A second review is needed in a corporate group. Under section 29(1) no. 3 GmbHG, the employees of the GmbH and certain companies it directs or directly controls may have to be counted together. The thresholds of 300 and 500 employees serve different purposes.
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Compile the previous year employee figures and compare the result with the corporate and company register structure.
Prepare a participation and management overview and calculate the employee figures of the companies included on the same month-end basis.
Check the status of the superior capital company and keep the own 500 threshold separate from attribution under section 29(1) no. 3 GmbHG.
Read section 29 GmbHG as a whole and compare the statutory cases with the articles, ownership structure and business setup.
Document the ownership percentage, management powers and legal form of each connected company using the deeds and register extracts.
Section 29(1) no. 2 GmbHG links the supervisory board duty to an average employee number above 300. Exactly 300 does not satisfy this case. The review therefore starts with the GmbH own workforce and the period prescribed by statute.
Under section 29(3) GmbHG, the relevant average is based on the employee numbers at the month ends in the previous calendar year. One peak month therefore does not decide the issue on its own. Management should derive the figures from reliable payroll and personnel records and document the calculation.
Section 29(4) GmbHG requires an assessment on 1 January for the cases in section 29(1) nos. 2 to 4. If the average exceeds 300 or 500, management must notify the court without undue delay. The next assessment is generally made three years later. A change in the workforce during that period does not in itself change the need for a supervisory board.
The review of the articles of association places the workforce calculation alongside the other corporate, majority and consent provisions.
Section 29(1) no. 3 GmbHG addresses a specific group situation. The company must direct stock corporations, supervisory-board-liable GmbHs or companies within section 29(2) no. 1 GmbHG under unified direction or control them through a direct participation above 50 percent. The combined average workforce of the GmbH and the companies included must also exceed 300.
This rule does not cover every connection between businesses. A minority investment, a common shareholder or economic cooperation is not enough by itself. The statutory connection and a reliable allocation of the relevant legal entities are required.
Management therefore needs information from the connected companies. Section 29(5) GmbHG requires the authorised representatives of the companies named there to provide the information needed for the assessment under section 29(4) in due time. The group should define who collects, checks and approves the month-end figures.
The distinction from internal management and representation also matters. The article on aligning management areas in the GmbH agreement addresses how responsibilities can be documented within the GmbH.
The 500 employee threshold appears in section 29(2) no. 1 GmbHG and serves a different purpose from the 300 threshold. The duty under section 29(1) no. 2 does not apply where the GmbH is under the unified direction of, or directly controlled above 50 percent by, a supervisory-board-liable capital company and the GmbH own average workforce does not exceed 500.
This exception concerns the GmbH own average in the case described by section 29(1) no. 2. It must not be confused with group attribution under section 29(1) no. 3. That case asks whether the GmbH directs or directly controls qualifying companies and whether the combined average therefore exceeds 300.
A group review should therefore proceed in two directions. Is the GmbH under a qualifying superior company, or does it itself direct or control qualifying companies? Only then can the 300 duty, the 500 exception or another statutory case be assessed correctly.
A voluntary supervisory board is a separate matter. The article on the voluntary supervisory board explains contractual establishment and consent rights below a statutory duty.
The workforce is only one of several points in section 29(1) GmbHG. A supervisory board is also mandatory where registered capital exceeds EUR 70,000 and the number of shareholders exceeds 50. Under the wording of the statute, both values must be exceeded together.
Another case concerns a GmbH that is a personally liable partner of a limited partnership. The employees in the GmbH business and in the limited partnership business are then considered together. Section 29 also names special cases arising from a cross-border merger and companies with the characteristics described in section 189a no. 1 lit. a or lit. d UGB.
These cases must be kept separate from voluntary control and from an advisory board. The duty review also does not decide who may later serve as a member or which personal incompatibilities apply. For the resolution side, the article on majorities for fundamental GmbH decisions provides a separate perspective.
The statutory duty follows from a case in section 29 GmbHG. It cannot be replaced by an informal practice. The articles and corporate resolutions must reflect the required structure and correspond with the company register position.
In other cases, section 29(6) GmbHG allows the articles to provide for a supervisory board. The board is then voluntary, but it remains a formally structured corporate body. Its oversight, reporting and consent powers must fit the articles, the rules of procedure and management responsibilities.
The statutory duty also does not answer who may later be appointed or which personal incompatibilities apply. The candidate eligibility and the permitted number of other mandates are separate questions. A contractual advisory board is another control model with a different legal basis.
For the role of an advisory board, the article on the advisory board with veto rights is a useful companion. It addresses contractual control without anticipating a statutory duty to establish a supervisory board.
The current articles, amendments, company register extract, organ list and ownership overview belong together in the first review. In a group, add the organisation chart, participation agreements and documents showing unified direction or direct control.
The workforce calculation should be traceable for each relevant month end in the previous year. Useful evidence includes an agreed list of employee numbers, the underlying personnel records, the calculation note and the date on which management made the assessment under section 29(4) GmbHG.
Finally, compare the result with the articles and the company register. Record whether the result is a statutory duty, the exception in section 29(2) no. 1 GmbHG, a voluntary appointment or no supervisory board case. The articles review checklist helps capture the connected clauses. The articles of association glossary entry places the issue within the wider internal constitution.
For section 29(1) no. 2 GmbHG, the average employee number must exceed 300. Exactly 300 does not satisfy that case. Other statutory cases may still apply.
Section 29(3) GmbHG uses the employee numbers at the respective month ends in the previous calendar year. Management makes the assessment on 1 January under section 29(4) GmbHG.
No. Section 29(1) no. 3 GmbHG requires the named company types and unified direction or direct control above 50 percent. A group connection alone is not enough.
Section 29(2) no. 1 GmbHG excludes the duty under no. 2 in defined circumstances where the GmbH is under a supervisory-board-liable capital company and its own average workforce does not exceed 500. This is separate from attribution under section 29(1) no. 3.
Management must determine the average under the statutory rules and notify the court without undue delay if 300 or 500 is exceeded. The employee figures, group structure, articles and company register should be checked together first.
Review and structure GmbH articles with Brandauer Rechtsanwälte in Austria.
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