Section 67 ASVG in an Austrian business acquisition: contribution arrears, payroll risks, evidence, holdback and indemnity.
BRANDAUER Rechtsanwälte
Salzburg law firm for corporate, company and transaction law
Every transaction is handled by a coordinated team of lawyers, legal staff and specialists. In company acquisition matters we look at structure, contract, tax and liability together.
In an Austrian business acquisition, unpaid social security contributions can become a buyer issue even though the arrears relate to the seller period. Section 67 ASVG is therefore a separate review track alongside employment law, payroll tax and tax due diligence. If contribution arrears, payroll audit risks or missing confirmations are seen only after closing, the buyer often already owns the problem.
This post separates social security debts from general employee provisions. It focuses on buyer liability, pre signing evidence, holdback and indemnity protection and the documents that should be in the data room before completion.
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A share transfer and an asset deal create different social security issues. The key point is whether an operating business with employees and payroll history is transferred.
If no business with staff is transferred, record the boundary. Still check whether payroll, contractors or historic contribution issues appear in the target. The post on tax due diligence covers adjacent tax risks.
If contribution account evidence, confirmations and indemnity are available, the agreement should still regulate notice duties, cooperation and later audits. A holdback can be useful if an amount is not yet fixed.
Without contribution evidence and a clear indemnity, social security debts should not be treated as a side issue. Request account evidence, clarify pending audits and link open amounts to holdback or price adjustment.
Section 67 ASVG addresses buyer liability for social security contributions. For buyers, open contributions cannot always be treated like ordinary legacy liabilities. If a business is transferred, contribution accounts, employment relationships and payroll records require their own review track.
The issue complements the post on transfer of business under employment law. That post deals with employment relationships. This one deals with contributions, arrears and the economic allocation of historic payroll costs.
Buyers should request contribution accounts, payment confirmations, correspondence with the social security carrier, payroll audit documents, payroll records and information on contractors. Missing documents do not prove damage, but they remove the basis for risk assessment.
Companies with many part time employees, variable pay, managing director remuneration, contractors or bonus systems deserve particular attention. The distinction from employee provisions matters because provisions cover different risks.
The table separates evidence, assessment and contract consequence.
| Layer | What to review | Contract consequence |
|---|---|---|
| Evidence Contribution account and payment status | Carrier documents, payroll records, audit status | |
| Risk Arrears or later assessments | Indemnity, warranty, holdback | |
| Closing Material documents missing | Condition or delivery obligation | |
| After closing Audit after closing | Cooperation and cost allocation |
The specific liability depends on structure, business transfer and available evidence.
Practical point: Social security debts should not first appear in the post closing file. If the buyer takes over staff and operations, contribution status should be documented before signing and protected in the agreement.
If an arrear risk is possible but not quantified, a purchase price holdback may help. It should define trigger, maximum amount, release conditions and the treatment of later assessments. A general sentence that the seller bears all old liabilities is often too vague.
The post on purchase price holdback explains the general mechanics. For social security debts, the contract should also state who communicates with the authority and which documents the seller must provide after closing.
Social security contributions sit between employment law, tax review and contract law. Tax due diligence may give indications, but it does not replace the social security classification review.
For contractors and false self employment, the risk often appears only through a later audit. Buyers should therefore read not only open balances, but also the business model and the actual work performed.
No, not automatically in every structure. In a business transfer, buyer liability is a separate review item. The specific assessment depends on the transferred business, the contributions and the evidence.
A warranty helps, but it does not necessarily replace evidence. For concrete risks, indemnity, holdback and cooperation duties after closing are more precise.
If contribution arrears are possible, contribution account, payment status and relevant confirmations should be reviewed before closing. The exact approach depends on the case.
How employment relationships transfer in a business acquisition.
Review severance, vacation and time balances in the price.
How open risks are secured in the purchase price.
Tax risks and audits in the target company.
When buying a company, structure, review and contract decide. Call us directly or send an email, callback within one business day.
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