Directors’ Duties in Austria

>> Powers and Duties in Austria

You must act within the powers imposed upon you by the relevant legislation, the shareholders, the supervisory board (if any), the company’s Articles of Association and any specific power of attorney, if any. You are also required to implement the decisions approved by the shareholders and act in accordance with any specific powers that may have been delegated by the shareholders or by the Board of Directors itself, if any.

Duties – skill and care

In exercising directors’ powers, you are required to exhibit the due diligence of a prudent businessman when acting for the company.

Duties – general

Directors are obliged to exercise their office with due managerial care, with the term being defined as acting with:

  • loyalty to the company
  • caution
  • the required knowledge

In addition, and more specifically, directors are expected to:

  • The director manages the general business affairs of the company, they have a duty of loyalty to the company and must look after its interests. Directors must carry out their duties with due care and they must also faithfully safeguard the interests of the company. This includes the obligation to design the flow of information within the company in a way allowing the management always to gain certainty about business relevant data and to recognize material aberrations.
  • The director has the duty to implement a proper accounting system and internal control system.
  • The director must report certain issues (eg the course of business, future development of the company) to the supervisory board, if any, – depending on the issues to be reported – on a yearly, quarterly or case by case basis.
  • You are responsible for compiling an annual account and situation report in due time, ie within the first five months of a new  business year.

Duties – other

There are many other areas of law that impose responsibilities and obligations on directors and senior managers. These responsibilities and obligations include:

  • You must call the company’s general meeting within the legal deadlines, in particular when such general meeting is in the interest of the company. Moreover, you must call the company’s general meeting as soon as
  • the company assets fall under an amount corresponding to the half of the share capital.
  • Subject that self-dealing (“Insichgeschäft”) is permitted by applicable law (eg the agreement contains only advantages for the company), you must obtain the consent of the supervisory board, if any, or the remaining directors.
  • You have the duty regarding the filing of certain circumstances (eg changes with respect to representation rights, transfer of shares) to the commercial register.
  • You must adhere to the prohibition of a repayment of contributions (“Verbot der Einlagenrückgewähr”) resulting from Section 82 of the Act on Limited Liability Companies.
  • In case a an insolvency reason exists you are obliged to file for insolvency.
  • The adherence to anti-bribery and anticorruption principles results from the relevant laws and the director’s obligation to exercise the due diligence of a prudent businessman.
  • Any serious accidental injury and environmental breaches must be reported in accordance with company policy. For example, in case an accident at work occurred, the director is obliged to report this accident to the accident insurance institution if the accident resulted in an inability to work for more than three days.
  • You must comply with all competition law and regulations. This could include the implementation of training measures for employees of certain departments (eg sales department) or any other competition law-compliance measure, such as the implementation of a whistle-blower hotline.
  • You must comply will all areas of tax law and regulations. Failure to do so could leave you liable (jointly with the company) for taxes payable in accordance with relevant tax law provisions. However, this liability is subject to a culpable breach the director’s obligations. Hence, in general a personal liability for the non-payment of taxes applies.

Latest version updated 22nd March 2018

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