Austrian OGH Rules on Capital Repayment and Solicitors’ Fees

Aug 13, 2026 Benn-Ibler Rechtsanwälte

The Austrian Supreme Court (Oberster Gerichtshof, hereinafter OGH) was tasked with determining whether a limited liability company (GmbH) is permitted to assume the legal fees incurred for counsel retained to draft new articles of association and shareholder agreements in relation to a funding round, the reason being that such payments could be viewed as returning capital to a potential shareholder.

Fees associated with obtaining urgent legal financing

In the case at hand, the defendant GmbH had encountered considerable financial difficulties, requiring immediate capital infusion. A potential investor expressed interest in acquiring a stake in the company, provided that the current corporate agreements underwent substantial revision. Consequently, the GmbH retained the same solicitor—who had previously assessed the company’s contracts on behalf of the prospective investor—to draft updated articles of association as well as share subscription and transfer agreements.

Following partial payment of the agreed-upon fee, the company refused to remit the remaining amount. The GmbH contended that the legal services had been provided chiefly for the investor's benefit; as such, funding these costs would constitute an impermissible return of capital contributions.

No prohibited repayment of capital contributions

Nonetheless, the OGH dismissed this argument. While the Austrian Limited Liability Companies Act (GmbH-Gesetz) prohibits asset transfers to shareholders without appropriate compensation, the broader economic context takes precedence. In this case, the company held a significant stake in revising the contracts, as these modifications were critical for attracting investment and securing urgently needed capital. Therefore, the legal services not only advanced the investor’s interests but also provided direct benefits to the GmbH itself.

The OGH further noted that, from an economic standpoint, the company’s financing was analogous to a capital increase. Following the successful completion of the financing round, the limited liability company obtained additional liquid funds, thereby enhancing its financial position. In this context, the expenses incurred for legal support during the financing process were considered justified from a business perspective. The fact that the investor also derived benefits from the restructured contracts did not affect this assessment. Consequently, there was no unauthorised repayment of capital, and the solicitor was therefore entitled to receive their fees.

OGH, 2 Ob 12/26t, 19 May 2026