English »法律研究
Legal fees in a financing round – When does the GmbH pay, and when does it not?
OGH 2 Ob 12/26t | 19.05.2026
A start-up limited liability company (GmbH) engaged a lawyer to revise its articles of association and a shareholders’ agreement. The background was an urgent financing round. An investor made its investment conditional on revising the existing agreements. The GmbH therefore covered the legal costs. When the GmbH failed to pay the lawyer’s invoice in full, the lawyer sued for the outstanding amount. The GmbH argued that making the payment constituted a prohibited return of capital. This would amount to an unlawful transfer of the company’s assets to its shareholders.
The Austrian Supreme Court (OGH) rejected this argument. A prohibited return of capital contributions only occurs when a company transfers assets without receiving equivalent consideration. In this case, the GmbH had a vital interest in successfully completing the financing round. The investor’s participation would provide the GmbH with fresh capital and secure its economic survival. The legal fees were therefore justified as business expenses and had to be borne by the GmbH.
In practice, the GmbH may bear financing-round costs, including legal fees, when the fresh capital benefits the GmbH itself. The situation is different when the company merely finances the acquisition of shares by a new shareholder without benefiting itself.
2026年9月9日
Red-White-Red Card Plus Not Sufficient: No Advance on Maintenance Without Long-Term Residence Status
OGH | 10 Ob 63/26a | 30.06.2026
The Austrian Supreme Court (OGH) had to determine whether a Serbian minor was entitled to an advance on maintenance payments (Unterhaltsvorschuss). He held the temporary residence title “Red-White-Red Card Plus”. His mother, however, held the residence title “Permanent residence – EU”. The father was legally obliged to pay maintenance. The minor therefore applied to the Federal Government for an advance on maintenance payments. He argued that he already met the requirements for “Permanent residence – EU”. However, this status had not yet been granted to him.
The Austrian Supreme Court clarified that merely meeting the requirements is not sufficient. Long-term residents must be treated equally to Austrian citizens under Article 11 of the Long-Term Residents Directive. An advance on maintenance payments constitutes a core benefit for this purpose. Equal treatment, however, requires that long-term resident status has actually been granted.
The “Red-White-Red Card Plus” only provides a temporary right of residence. The mother’s residence title also does not grant the child an independent entitlement. The minor was therefore not entitled to an advance on maintenance payments under Section 2 para 1 of the Austrian Advance on Maintenance Payments Act. The Austrian Supreme Court upheld the Federal Government’s appeal and rejected the minor’s application for an advance on maintenance payments.
2026年8月26日
Registration for Social Security Does Not in Itself Prove Employment
VwGH Ra 2026/09/0018 | 03.06.2026
The unauthorized employment of a foreign national is punishable under Section 28 para 1 no 1 of the Austrian Act on the Employment of Foreign Nationals. Whether employment exists depends on the true economic substance under Section 2 para 4 of the Act. The formal appearance of the facts is not decisive.
In the specific case, a managing director was fined. He was accused of unlawfully employing a Turkish national for two days in December 2022. The sole basis for the penalty was the employee’s registration for social security. The managing director argued that the actual start of employment was only on 02.01.2023. Before that date, the man had only attended to personal administrative matters. The Supreme Administrative Court of Austria (VwGH) annulled the penalty imposed on the managing director in its decision of 03.06.2026 (Ra 2026/09/0018). Registration alone does not prove employment. The Administrative Court (Verwaltungsgericht) should have made additional factual findings of its own.
For practical purposes, this means that employers should document the actual start of employment. They should also register employees for social security only once they have actually started working.
2026年8月12日
Death of the sole managing director: Limits of the duty to take corporate precautions
OGH 8 ObA 40/25b | 24.06.2026
The unexpected death of the sole shareholder and managing director temporarily rendered the company unable to act. As a result, the salary of the company’s only employee could no longer be paid. The employee therefore lawfully terminated the employment relationship with immediate effect. Among other claims, she sought compensation in lieu of notice, arguing that the managing director should have taken precautions for the event of his death.
The Austrian Supreme Court (OGH) rejected the existence of a general duty to take such precautions. While a limited liability company (GmbH) must always have a managing director under Austrian law, this does not give rise to a general obligation to implement precautionary measures unless there are concrete indications of an imminent risk. In the absence of a managing director, the law provides for the appointment of an emergency managing director.
In the present case, the company was not at fault. Following the managing director’s death, the sole shareholder was initially unable to act and therefore could not appoint a new managing director. At that time, no estate curator had yet been appointed either. Consequently, the company could not be held responsible for failing to appoint a new managing director. The temporary absence of management alone does not constitute corporate fault.
2026年7月29日
Electronic service to an outdated e-mail address
OGH 2 Ob 16/26f | 19.05.2026
In the case at hand, a statement of defence and a default judgment were served electronically on a business owner. The documents were sent to an e-mail address registered in the official participant directory. However, that e-mail address had since come to be used by another company. The court of first instance revoked the confirmation of the default judgment’s finality and enforceability, holding that the electronic service had not been legally effective.
The Austrian Supreme Court (OGH) upheld this decision. According to the Court, the decisive factor is whether the recipient is actually able to retrieve the electronic notification and has access to the relevant e-mail address. Accordingly, a failure to update the e-mail address in the participant directory does not automatically result in legally effective service.
However, this decision has been criticised in legal literature and is inconsistent with the case law of other Higher Regional Courts. Critics argue that the decision creates a significant potential for abuse in favour of recipients. Regardless of the OGH’s ruling, it is therefore advisable to keep the participant directory up to date at all times and to notify any changes to the electronic address without delay.
2026年7月15日