Abberufung Geschäftsführer GmbH (removal of a managing director)
Removing a GmbH managing director in Austria: when is it possible, what deadlines apply, what happens to the service agreement? Engelbrecht Rechtsanwälte, Vienna.
Definition
The Abberufung (removal) of a managing director ends their corporate position as representative of the GmbH vis-à-vis third parties. It must be kept strictly separate from the termination of the managing director's service agreement. The removal is effected by shareholders' resolution and can generally take place at any time in Austria, including without good cause. The service agreement is initially unaffected by this and must be terminated separately.
Scope of application
- Loss of trust between shareholders and management
- Succession planning, acquisitions and restructurings
- Conflicts of interest or breaches of duty by the managing director
- Group situations with changed governance structures
Legal basis
The removal is based on the following statutory provisions:
- § 16 para 1 GmbHG: removal by shareholders' resolution, possible at any time
- § 16 para 2 GmbHG: removal by court order
- § 16 para 3 GmbHG: option to restrict removal to good cause where the appointment is made in the articles of association
Deadlines
The following timing aspects apply to a removal:
- Effect: The removal generally takes effect when the removal resolution is communicated to the managing director, or at a later point specified in the resolution.
- Commercial register filing: The lapse of the power of representation must be filed with the commercial register without delay (§ 17 para 1 GmbHG).
- Service agreement: This must be terminated separately, observing the contractual or statutory notice periods or other termination provisions.
Rights and obligations
Rights:
After removal, the managing director has in particular the following rights:
- continuing claims under the service agreement until it is validly terminated
- entitlement to severance pay once the service agreement ends, where contractually or statutorily provided
Obligations:
From the moment of removal, the removed managing director has in particular the following obligations:
- immediate handover of all management matters, documents and access credentials
- active cooperation in transferring responsibilities to the successor
- no further management or representation authority once the removal takes effect
Common mistakes
The following mistakes occur particularly frequently in practice:
- Delayed commercial register filing, creating legal uncertainty.
- Removal and termination not coordinated – the managing director may continue to have remuneration claims under the ongoing service agreement.
- No shareholders' resolution with the required majority – a defective removal may be invalid.
- Restrictions on removal contained in the articles of association are overlooked.
Recommended steps
The following steps support a legally sound removal:
- Pass the shareholders' resolution with the correct majority and document it fully in writing.
- Check the articles of association for any restrictions on removal.
- Initiate the commercial register filing immediately once the removal takes effect.
- Terminate the service agreement separately and in parallel, observing the relevant notice periods or other termination provisions.
- Obtain a legal review before the removal where liability issues are suspected.
Frequently asked questions
Can a managing director be removed without cause?
Yes. In Austria, a GmbH managing director can generally be removed at any time and without cause, provided the required majority is reached. Where the appointment was made in the articles of association, however, the removal may be restricted to good cause.
What happens to the service agreement after removal?
The service agreement is generally unaffected by the removal in the first instance. It must be terminated separately, observing the agreed or statutory notice periods or other termination provisions. Until it is validly terminated, the managing director may continue to have contractual claims, in particular claims for remuneration.
Must the removal be entered in the commercial register?
Yes. The lapse of the power of representation must be filed with the commercial register without delay. The effectiveness of the removal is, however, generally not dependent on registration in the commercial register.
Can a shareholder-managing director be removed against their will?
In principle yes, provided the required majority is reached in the shareholders' meeting. Where the appointment was made in the articles of association, however, the removal may be restricted to good cause. The articles may also provide for special majority requirements.
What claims arise from an unlawful removal?
If, in the course of the removal, the service agreement is terminated early without observing the relevant notice periods or without good cause, claims for compensation may arise in the amount of the remuneration for the period that would have had to elapse until the service relationship ended properly.
Any questions?
Do you want to remove a managing director, or have you been removed yourself? We advise you on the next steps on a sound legal footing.
