BMJ: Rules on 'Disqualified Directors'

Aug 25, 2023 Benn-Ibler Rechtsanwälte

The Austrian Company Law Digitisation Act 2023 (Gesellschaftsrechtliches Digitalisierungsgesetz 2023) will now implement another part of Directive (EU) 2019/1151 (Directive on the use of digital tools and procedures in company law). This concerns the provisions on ‘disqualified directors’. The Austrian Federal Ministry of Justice (Bundesministerium für Justiz, hereinafter BMJ) has recently submitted a draft for review.

The draft brings changes to the law on corporations, namely the GmbH Act, the Stock Corporation Act (Aktiengesetz, AktG), the Cooperative Societies Act (Genossenschaftsgesetz, GenG), the SE Act (‘SEG’) and the SCE Act (‘SCEG’). In future, a final sentence of more than six months’ imprisonment for certain offences will mean that this person may not perform the function of a managing director  (Section 15 para 1a GmbHG new), a member of the executive board (Section 75 para 2a AktG new, Section 15 para 2a GenG, Section 59 para 4 SEG), or executive director (Section 25 para 1a SCEG). The relevant offences are economic offences, such as fraud (Section 146 Austrian Criminal Code, hereinafter StGB), breach of trust (Section 153 StGB), favouring creditors (Section 158 StGB), money laundering (Section 165 StGB), and cross-border VAT fraud (Section 40 Finanzstrafgesetz).

The disqualification is limited to three years from the date on which the conviction becomes final. After that, the person may be reappointed as a director or board member. If the disqualification occurs after the appointment has already been made, the managing director or director must resign immediately. However, disqualification shall not affect the power of representation of the managing director or director.

The amendments will enter into force on 1 December 2023 and will apply to convictions that become final after 30 November 2023.

286/ME - XVII. GP (12 July 2023)