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LEXIKON
The dissolution of a limited liability company
In its highly topical decision of June 4, 2025, 6 Ob 170/24d (www.ris.bka.gv.at/jus), the Austrian Supreme Court once again addressed the issue of the admissibility of an action for dissolution of a limited liability company (GmbH). As in the past, the Supreme Court again rejected such an action for dissolution, but at least hinted at a possible way out, without, however, giving a final assessment of this issue.
Legal background
The limited liability company (GmbH) is regarded by both the relevant law (GmbHG) and case law as a legal entity (company) that is independent of its shareholders. This distinguishes the GmbH from partnerships, i.e., general partnerships (OG) and limited partnerships (KG). In these cases, the shareholder-dependent element is predominant. The provisions of §§ 84ff GmbHG regulate the legal possibilities for dissolving a GmbH. According to these provisions, a GmbH can be dissolved by the expiry of the term specified in the articles of association, by resolution of the shareholders, by merger, by the opening of bankruptcy proceedings, by order of an administrative authority, or by decision of the commercial court. Section 84 (2) GmbHG also provides for the possibility of agreeing further grounds for dissolution in the articles of association.
The decision of the Austrian Supreme Court 6 Ob 170/24d
In its recent decision, the Supreme Court reiterates that, unlike in the German GmbHG (German Limited Liability Companies Act), for example, there is no action for dissolution in the case of Austrian limited liability companies (GmbH). According to the Supreme Court, the legislature expressly opted for this approach, and therefore a shareholder wishing to dissolve the company cannot successfully bring such an action. According to the Supreme Court, there is also no dissolution for good cause by analogy by classifying the GmbH as a continuing obligation that can be dissolved at any time for good cause.
In practice, the most important case of such an agreement on a reason for dissolution is the right of termination agreed in the articles of association. This gives a shareholder the option of terminating the company in compliance with agreed notice periods.
As a rule, the remaining shareholders are given the opportunity to pass a resolution to continue the company without the withdrawing shareholder. However, such a right of termination under the articles of association is not always agreed. In the absence of such a right, the individual shareholder has no possibility of dissolving the company independently or having it dissolved. According to case law, dissolution on the grounds that it is unreasonable to remain in the LLC is therefore also not possible. In practice, this can lead to a situation where, for example, two shareholders, each holding 50% of the share capital, disagree, argue, and, in the absence of the necessary resolutions, the company comes to a virtual standstill. However, neither of the two shareholders can unilaterally terminate the company, and thus the shareholders remain unwillingly in the same boat. This sometimes also has adverse consequences for the business operated by the company. Unlike in an OG, the conflicting shareholders do not have the option of forcibly excluding another shareholder.
In the present case, the Supreme Court upheld the lower court rulings, according to which the action for dissolution against a co-partner remains inadmissible. However, and quite remarkably, the Supreme Court concludes its reasoning for the decision with a hint that, under certain circumstances, an action for the consent of the (other) partner to the dissolution of the limited liability company would be conceivable. In the present case, the Supreme Court no longer had to deal with this question due to formal civil procedural issues. However, it concluded that the request for consent raised in the present case on the basis of the shareholder’s fiduciary duty under company law was no longer subject to review by it, from which it can be concluded that it does not categorically rule out this possibility.
Result
The Supreme Court therefore leaves open the question of legal action for consent to the dissolution of a limited liability company against a co-shareholder; further developments remain to be seen. However, if shareholders want to avoid such a stalemate and not remain trapped in a company, it is advisable to agree on a right of termination in the articles of association.