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Author: Gregor Grubhofer

No, advance payments on future claims to profits are not permitted (6 Ob 84/17x; 6 Ob 128/17x). The profit of a GmbH may not be distributed before the annual financial statements have been adopted and a resolution on the appropriation of profits has been passed. A shareholder who receives a

The contractor is generally responsible for handing over defect free work to the employer and must rectify any defects caused by non-contractual performance. However, sometimes only ‘visual defects’ occur during the construction of buildings, such as cracks, scratches, unevenness, dirt or deviations that are largely inconspicuous when viewed impartially and

The policyholder must disclose to the insurer all material risk circumstances of which he is aware before concluding the insurance contract. A circumstance which the insurer has expressly asked about in writing is deemed to be material in case of doubt. However, the policyholder must also inform the insurer after

Duties of loyalty are generally recognised in company law and in particular in the case of the company with limited liability (GmbH) in established case law. Duties of loyalty exist not only between the shareholders and the company, but also between the shareholders themselves. These duties of loyality can vary

Shareholder resolutions that violate the law (e.g. participation of a shareholder who is excluded from voting rights) or the articles of association can be challenged by the outvoted or an absent shareholder who was not properly invited to the shareholders’ meeting, by filing a lawsuit against the company. Outvoted shareholders

The GmbH shareholder has a comprehensive right to information from the company, which, according to case law (6Ob11/08y), also includes the right to inspect the books. A shareholder may not only inspect the books of the company but also of the wholly-owned subsidiaries of the company within fourteen days prior

Since July 2023, shareholders of a GmbH can also hold general meetings virtually, i.e. by video conference. However, the prerequisite for this is that this option is explicitly provided for in the articles of association of the GmbH. It must also be stipulated whether the meetings of shareholders are always

Bank guarantees issued in connection with construction contracts sometimes contain ambiguous wording and do not state clearly enough the purpose for which they were issued (e.g. advance payment or performance bond). Under Austrian law, if the wording of the guarantee is not clear, the intention of the parties must also

In construction contracts, both an advance payment guarantee and a performance bond in the form of a bank guarantee are often agreed, which the contractor must provide. This distinction is particularly important if the employer makes unlawful use of the bank guarantee. A performance bond ensures that the work is

Under certain circumstances, a contracting party may be released from its obligation to perform if the performance of the service has become unaffordable and unreasonable in an unforeseeable manner. Generally, fixed-term contractual relationships may be terminated with immediate effect for good cause, such as impossibility of performance, before the expiry