2 starting a business - registration and permission requirements

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Questions and Answers

Which entity has the authority to adjudicate judicial criminal law in Austria?

Juries from the public

Administrative agencies

Local governmental bodies

Fully independent judges (correct)

What distinguishes felonies from misdemeanours in the Austrian criminal law system?

Felonies involve crimes punishable by more than three years of imprisonment. (correct)

Misdemeanours are always non-intentional crimes.

Felonies can only be adjudicated in regional courts.

Felonies are less serious and punishable by fines only.

Which courts handle appeals against decisions made by district courts in Austria?

District courts themselves

Local administrative courts

Higher regional courts and the Supreme Court (correct)

Supreme Court only

What happens to criminal convictions once they are final and cannot be challenged?

They are entered into the criminal records. Signup and view all the answers

What determines the length of the expungement period for entries in criminal records?

The severity of the sentence imposed and nature of the crime. Signup and view all the answers

Which of the following punishments is NOT a main form of punishment in Austrian judicial criminal law?

Community service Signup and view all the answers

In which courts is jurisdiction determined in the first instance for judicial criminal law cases?

District courts or regional courts Signup and view all the answers

What does the term 'Tilgungsfrist' refer to in the context of criminal records?

The period after which a criminal record entry is expunged. Signup and view all the answers

What is one of the key requirements for starting a business in Austria according to the Trade Act 1994?

Necessary permits must be granted. Signup and view all the answers

Which of the following activities is exempt from the requirements of the Trade Act 1994?

Self-employed cleaning services. Signup and view all the answers

For which type of professionals are stricter requirements set out by laws other than the Trade Act 1994?

Regulated liberal professions. Signup and view all the answers

What criterion must an economic activity meet to fall under the Trade Act 1994?

It must be conducted for profit. Signup and view all the answers

Which of these activities is NOT typically regulated under the Trade Act 1994?

Self-employed babysitting. Signup and view all the answers

What is a common misconception regarding the initiation of a business in Austria?

Starting online shops has no legal implications. Signup and view all the answers

Which legal framework primarily governs the commencement of trade activities in Austria?

Trade Act 1994. Signup and view all the answers

What aspect of the Trade Act 1994 impacts the opening of an online shop?

It necessitates obtaining necessary permits. Signup and view all the answers

What is the minimum share capital required to establish a public limited company (AG)?

EUR 70,000 Signup and view all the answers

Which of the following is NOT a mandatory body of a public limited company (AG)?

Financial Committee Signup and view all the answers

What right do holders of company value shares have?

A proportional share of retained earnings Signup and view all the answers

In terms of liability, what happens to shareholders of a public limited company (AG)?

They can only lose the value of their subscribed shares Signup and view all the answers

What is a primary reason Selma and Sebastian reconsider an AG for their company?

The extensive accounting requirements of an AG Signup and view all the answers

How is the Management Board of a public limited company (AG) formed?

Appointed by the Supervisory Board Signup and view all the answers

What is the key feature of company value shares (Unternehmenswert-Anteile)?

They can be issued in any nominal amount from 1 cent Signup and view all the answers

Which option is NOT mentioned as a potential company form for Selma and Sebastian?

Public Limited Company Signup and view all the answers

What must be included in a trade name to correctly reflect the company's identity?

A reference to its legal form Signup and view all the answers

What is the primary function of a trademark?

To identify products or services from a specific company Signup and view all the answers

What consequence does entering a trade name in the company register have for traders?

It provides limited protection against name usage by others Signup and view all the answers

What should a trader check before selecting a trade name?

Existing trademarks that could be infringed Signup and view all the answers

What economic significance is required when including a geographical term in a trade name?

Existing business presence and influence in the area Signup and view all the answers

Why might Selma and Sebastian consider a better form of protection for their trade name?

To prevent potential name confusion internationally Signup and view all the answers

What should be avoided when creating a company's trade name?

Choosing a name that misrepresents the company's purpose Signup and view all the answers

How can a trademark particularly benefit businesses?

By distinguishing products or services from competitors Signup and view all the answers

What is the primary motivation for online companies to establish themselves in low-tax regions?

To capitalize on low taxation and avoid contributions to local systems. Signup and view all the answers

As of January 2020, what is the minimum worldwide annual turnover for an online advertising operator to be subject to Austria's digital tax?

EUR 750 million Signup and view all the answers

In the context of Austria's Digital Tax Act, how is an online advertising service considered to be provided in Austria?

If it is received on a device with an Austrian IP address. Signup and view all the answers

What is the tax rate applied to the digital tax imposed on online advertising services in Austria?

5% Signup and view all the answers

What is a significant consequence of aggressive tax planning by big cross-border digital companies?

They reduce effective taxation to nearly zero. Signup and view all the answers

What global agreement was signed by leaders of 136 countries in late 2021 regarding corporate taxation?

Global minimum corporate tax rate of 15% Signup and view all the answers

Which company is mentioned as an example of an online advertising operator likely affected by the digital tax?

Facebook Signup and view all the answers

What happens to the costs incurred by online advertising companies due to the digital tax?

They are likely passed on to their clients. Signup and view all the answers

Study Notes

Starting an E-Commerce Business in Austria

Entrepreneurs Selma and Sebastian need to understand if they can simply use a trade name to start their online shop or if they require additional permissions.

Trade Regulation Law (Gewerberecht)

Starting a business requires necessary permits as per the Trade Act 1994 (Gewerbeordnung 1994, GewO).
A trade license is essential for any self-employed, regularly conducted, profit-oriented business activity.
Certain activities are exempt from Trade Act requirements, including agriculture, arts, and household services (e.g., cleaning, babysitting).
Regulated professions (doctors, lawyers) follow stricter laws than the Trade Act.

Judicial and Criminal Law

Judicial criminal law is managed by independent judges in the general courts, including district and regional courts.
The Supreme Court (Oberster Gerichtshof, OGH) is the highest judicial authority.
Crimes categorized as felonies (serious crimes) carry imprisonment terms over three years; misdemeanours (less serious) are treated differently.
Criminal records are maintained for all convictions, expunged after a specified period depending on crime severity.

Company Structures

Companies can issue 'company value shares,' which can incentivize employees without complex acquisition processes.
Public Limited Company (Aktiengesellschaft, AG) needs a minimum share capital of EUR 70,000; personal liability is limited to the investment value.
GmbH and FlexCo are considered by Selma and Sebastian but come with formal accounting requirements that may be costly initially.

Trade Name Considerations

Trade names must accurately represent the company and include references to their legal form (e.g., OG, GmbH).
A geographical term in the trade name requires economic significance in that area.
Selma and Sebastian decide on “MaSwyS” as their trade name, inspired by their slogan, and consider trademark registration for protection.

Trademark Law (Markenrecht)

Registering a trade name only offers limited protection; trademarks provide stronger intellectual property rights.
Trademarks are distinct signs identifying the source of products/services, crucial for differentiation in the market.

Digital Taxation Overview

Digitalisation allows companies to operate in low-tax regions while benefiting from other countries' infrastructures.
Cross-border digital companies often reduce effective taxation through strategic planning.
Austria instituted a digital tax on online advertising as of January 2020 under the Digital Tax Act 2020, affecting providers with substantial annual turnovers and sales in Austria.
The tax rate is set at 5% for qualifying companies based on their earnings from advertising services in Austria.

Global Tax Initiatives

In late 2021, 136 countries agreed to introduce a global minimum corporate tax rate (GMCTR) of 15% to combat tax competition and corporate tax avoidance strategies.

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Description

This quiz explores the essential legal steps required for starting an e-commerce business in Austria. Participants will learn about necessary registrations, permissions, and other formal requirements to launch an online shop successfully. Get ready to navigate the world of online business regulations!