Discharge of a Managing Director by the General Meeting August 2026

Passing a valid discharge resolution

Under § 35 Abs 1 Z 1 GmbHG, the shareholders of an Austrian limited liability company must, within the first eight months of each financial year, approve the annual financial statements for the preceding financial year, resolve on the distribution of the balance-sheet profit and decide whether to grant the managing director a discharge. The not uncommon practice of signing a pre-prepared written resolution during the meeting to discuss the financial statements is unlawful in light of this clear statutory requirement. In addition, a shareholder who is also a managing director may not vote on the resolution granting a discharge to management and is therefore subject to a voting prohibition. A shareholder may abstain from participating at a general meeting, whereas a written resolution requires all shareholders to consent to the written procedure. A general meeting may be held even if not all shareholders attend, provided that the statutory quorum or the quorum prescribed by the articles of association is met. Written resolutions, by contrast, generally require the prior consent of all shareholders to that procedure.

Risks associated with written resolutions

In addition to the requirement to hold an ordinary annual general meeting, the written procedure may carry a further risk: the majority required to grant a discharge to management may not be achieved. Shareholders, particularly managing shareholders, should avoid this risk. We therefore strongly recommend holding a formally valid general meeting instead of simply passing a written resolution at the meeting to discuss the financial statements. General meetings may also be held virtually, provided that the articles of association make appropriate provision for this. Properly structured records of ordinary annual general meetings can also enhance the company’s value during due diligence, for example in connection with a business sale.

Assistance with general meetings

We would be pleased to assist with any amendments to the articles of association required to permit virtual general meetings, as well as with conducting the meetings themselves.

Related information is available under Business Law and Leadership & Compliance.