Company liquidation in Austria 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. Our lawyers in Austria can oversee the process and offer legal advice on request.
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How is a company liquidated in Austria?
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 voluntarly (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.
Company liquidation in Austria will require several steps that mainly focus on ending business contracts, terminating licenses and, most importantly, satisfying the creditor debts. Below are several steps investors need to make sure they complete before the business is terminated:
- 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.
We are here to tell you all the legal details about company liquidation in Austria and the implications of the process.
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).
Here are other interesting details:
- 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 company liquidation to Austria 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 to 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 for cancelation from the register. As a result, the company’s details are canceled from the Commercial Register and 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.
What are the responsibilities of a liquidator in Austria?
Winding up a company in Austria requires, after the issuance of a decision in this sense, the appointment of a liquidator. This professional has various responsibilities in company liquidation in Austria, as mentioned here:
- Notifies company creditors of the dissolution of the company in question.
- He/she is in charge of the balance sheet liquidation. It considers company assets with a view to their sale.
- The liquidator ensures that the resolution of winding up the company in Austria is published in the Official Gazette.
- He/she reports the financial situation and analyzes the assets before the sale.
- He/she ensures that after the sale of the company’s assets, its debts are paid.
- Prepares a final report on the liquidation of the company, following the payment of debts.
- He/she completes the process of closing a company in Austria with the effective deregistration from the Austrian Trade Register.
In addition to those listed above about the duties of a company liquidator, we specify that he is also in charge of distributing the remaining assets after all debts are paid. Moreover, it is good to emphasize that, according to the legislation in Austria, directors of LLCs can be appointed as liquidators when winding up a company in Austria. We invite you to discuss more with our attorneys in Austria to better understand the process of company termination.
In Austria, a company can be closed online
In Austria, there is the possibility to close a company online, with the help of specialists in the field. Such experts can take care of all the formalities, without the owners of the company in question having to travel or be involved in the formalities/procedures. Moreover, they can also deal with the notarization of documents, as provided by law. However, we invite you to contact our Austrian lawyers and find out how a company can be closed online, without having to be involved in the procedures.
Data on liquidated companies in Austria
Here is some information and statistical data about the companies that ended their activities in Austria in 2023, plus a comparison with Q4 of 2022:
- Around 5,338 bankruptcies were registered in Austria.
- The most affected sector in terms of bankruptcies in 2023 was that of services in Austria.
- Around 1,431 bankruptcies were registered in Austria in Q4 of 2022.
In addition to legal assistance for company liquidation in Austria, our specialists can also help you in other areas of interest. For example, our immigration lawyers in Austria can manage the relocation formalities to Austria. Moreover, they can take care of obtaining residency in Austria for those interested or even Austrian citizenship for citizens already established in this country. For more details, you may contact our law firm in Austria.