Managing Directors Not Obliged to Arrange Preparations in Case of Sole Shareholder-Director's Death

Aug 6, 2026 Benn-Ibler Rechtsanwälte

The unexpected death of a sole shareholder and managing director presented a limited liability company (GmbH) with considerable organisational challenges, which is why the Austrian Supreme Court (Oberster Gerichtshof, hereinafter OGH) considered the question of whether a GmbH is obliged to make provisions in the event of the managing director’s death whilst he is still alive.

In the case at hand, the claimant was the only employee of the limited liability company. After the death of the sole shareholder and managing director, the claimant continued her employment for two months without receiving remuneration. In the absence of an appointed successor or representation of the estate, she resigned and subsequently sought severance pay among other claims.

The OGH rejected the claim, noting that an entitlement to severance pay necessitates employer fault. In this instance, the court determined that no fault existed. Furthermore, neither the limited liability company nor its sole shareholder was required to make prior arrangements for an unforeseeable death.

The OGH noted that Section 15a of the Austrian Limited Liability Companies Act (hereinafter GmbHG) allows for the appointment of an interim managing director if the current one is absent, and employees have the right to request this. However, there is no obligation to file such a request, nor does this imply a responsibility for the managing director to prepare for their own sudden death.

Additionally, the GmbH cannot be held liable simply for violating section 15a of the GmbHG, since its only shareholder did not have legal capacity. Without representation for the estate, it was also impossible to appoint a new managing director.

The OGH has determined that sole shareholders and managing directors are not required to establish provisions in the event of their unexpected death. The GmbHG already includes a process—by appointing an emergency managing director—to ensure that the limited liability company can continue its operations under such specific circumstances.

OGH 8 ObA 40/25b (24 June 2026)