Company Dissolution in Austria
Company Dissolution in AustriaUpdated on Wednesday 24th April 2019
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Dissolution is the process through which a company is terminated. It is part of the overall liquidation process and, in general, this dissolution or final termination of the company is the final stage.
An Austrian legal entity can be liquidated as a consequence of a decision taken by the members of it or by a decision of a competent court, at the request of creditors or of its shareholders. The process is coordinated by a liquidator appointed voluntary (by the members of the company) or compulsory (by the court).
The law governing this process is the Austrian Insolvency Code. One of our lawyers in Austria can give you complete information about the Code and the business reorganization principles applicable to Austrian legal entities.
- Collect the due accounts payable: the amount the company is still entitled to collect from the customers for the delivered goods or services.
- Notify the interested parties: these include both the clients and the creditors and it is recommended to do this in due time.
- Terminate any leases: this can be the commercial lease for the company headquarters located in Vienna or another Austrian city.
- Notify the employees: the employees should be notified at least as per their notice period in the contract of employment; also, their final wages must be paid.
- Handle any due tax returns: the final income tax returns and other tax and social security obligations should be handled during this stage.
- Distribute the remaining assets: this is perhaps the most important step in the liquidation and the subsequent dissolution of the company and it is recommended to fully comply with the legal procedure and the appointment of a liquidator.
What are the steps for company liquidation in Austria?
The decision of closing a company in Austria is taken through a shareholder's resolution. After this step, the company and the appointed liquidator should collect the outstanding accounts payable and proceed with announcing the liquidation of the company. The early stages will also include the termination of all company leases for property, offices, and others. The liquidator will take all the measures necessary for the cancelation from the Commercial Registry and the payment of the claims. The appointed individual can be replaced by a committee of liquidators if there is a general partnership involved (in the case of partnerships, the general partners can be appointed to represent the entity’s interests during the process).
Among his/her responsibilities, the liquidator must elaborate a balance sheet with all the company’s assets, auction the company’s goods if the funds are not sufficient to cover the debts, receive payment from the company’s debtors and pay all the claims, suppliers and employees. He’s taking the entire former manager’s attributions, but cannot act if his actions aren’t related to the process of liquidation.
The decision of liquidating an Austrian company is recorded in the Commercial Registry along with the liquidator’s (or the commission of liquidators’) details. It’s the manager’s responsibility to take this step. The company must settle any due tax payments during this process.
The next step of dissolution of a company in Austria consists in canceling the business license and announcing the social security authority that the company will be liquidated. The fiscal authorities are also announced regarding the process. If the Austrian company has employees, they must submit a request to the regional health fund where they are registered to be de-registered.
After taking the above steps in the dissolution of an Austrian company, all the claims have to be covered and a newly updated balance sheet must be submitted at a general meeting. Along with the balance sheet, the liquidator must elaborate a report regarding its activities and the way the remaining assets should be divided among the shareholders. The distribution among the shareholders is made according to their contribution to the capital.
A new general meeting is convened and its minute is registered in the Commercial Register along with a request of cancelation from the register. As a result, the company’s details are canceled from the Commercial Register and from any other register.
How long does it take to liquidate a company in Austria?
The process of liquidation of an Austrian company may take from six months to several years, depending on the claims that have to be covered and the number of outstanding liabilities of the company.