Shareholder dispute
A conflict between shareholders over management, profit distribution or exit that can endanger the existence and capacity to act of the company.
A shareholder dispute arises when shareholders disagree on strategic decisions, management, the use of profits or an exit. In a deadlock the company can become incapable of acting. Possible ways out range from mediation through the exclusion or withdrawal of a shareholder to dissolution. The articles of association and the GmbHG are decisive.
In a transaction context the shareholder dispute is doubly relevant: existing disputes must be uncovered in the due diligence and covered through warranties or indemnities. As a precaution, articles of association regulate majority requirements, pre-emption and tag-along rights as well as exit-compensation clauses to defuse future conflicts on exit.
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Legal basis
Statutory texts for orientation; the version in force at the relevant time prevails.
This explanation gives a general overview of Austrian law and does not replace advice in an individual case. The specific circumstances of your transaction are always decisive.
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Due diligence
The careful examination of the target company before the purchase from a legal, tax, financial and operational perspective.
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Warranties
Independent assurances by the seller about specific characteristics of the company, the breach of which triggers damages or price-adjustment claims.
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Indemnity
A contractual undertaking by the seller to hold the buyer fully harmless against a specifically identified risk.
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Transfer of shares
The assignment of GmbH shares, which in Austria requires the form of a notarial deed.
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