The Token GmbH

A new financing model to strengthen the Austrian SME sector

A new alternative form of corporate financing is the issuance of tokens by a GmbH, the most common form of incorporation in Austria, and similar to a limited liability company.,is. This form of financing increases the equity of the GmbH and strengthens its economic resilience, especially in economically difficult times.

With this model, equity capital of the GmbH is divided into small shares and offered to investors for subscription with the help of a trustee. The trustee guarantees investor protection and the distribution of annual returns. The shares are represented by tokens which are digital “containers” that regulate the rights and obligations of contracting parties. Transactions are stored in a digital ledger in a decentralized manner based on distributed ledger technology (DLT)/blockchain.

Blockchain

A blockchain is a virtual ledger where digital transactions are stored in a decentralized way using distributed ledger technology.

Token

A token is a blockchain value that represents rights and can be assigned to one or more persons or identities.

The Model

  • Owners hand over a share (e.g. 10%) to a trustee (a lawyer).
  • The trustee takes over the tokenization of the share in trust with (e.g. hotel and tourism company).
  • Tokens represent equity: the shareholder position is guaranteed by the trustee and the registration in the DLT register/blockchain.
  • The GmbH issues tokens against payment of a token subscription price.
  • The trustee guarantees and assumes vis-à-vis investors (i) the transfer of the GmbH shares under business law (at the investor’s request) and (ii) the distribution of the annual proceeds.
  • Tokens are freely transferable; no notarial deed is required.

This allows the following goals to be achieved

  • Increased equity capitalization: Financing through tokens economically represents the raising of fresh equity capital.
  • Standardization: Transfer, exchange and trade are possible; investors are flexible and not tied to the company.
  • Legal security: every transaction is recorded in the DLT register/blockchain; this ensures the same security as the Austrian Commercial Register.
  • Digitalization: the entire structure can be handled digitally, without a physical presence; this opens up an international investor approach.
  • Customization: The model allows for a design that is closer to the specific business model of a company; combined with usage and voucher models, investors can also be more emotionally engaged.

Developed with our leading partners

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